City Hall is seeking help from central government to pay off the over $300 million it owes to garbage collection contractors, which have threatened to suspend their services unless they are paid, according to Town Clerk Royston King.
Puran Brothers Disposal Inc. and Cevons Waste Management have given notice to the Mayor and City Council (M&CC) of their intention to suspend their collection services from November 14 if they are not paid hundreds of millions owed to them.
King yesterday confirmed that both firms have indicated via letters that they would have to suspend their operations unless paid.
As a result, he said City Hall is engaging government as well as other partners whom he did not want to name.
Puran Brothers and Cevons are contracted by the M&CC to clean up residential and commercial sections of the city since the municipality does not have the equipment needed to do the work itself.
King told Stabroek News the council would have to develop a strategic plan to tackle the garbage situation if it is unable to make payments to the companies in time.
However, in August the council had resumed responsibility for garbage collection in several city wards due to its lack of finances but it was forced to once again relinquish the commercial district to Puran Brothers due to its inability to handle the service.
According to King, the M&CC is experiencing severe financial challenges “because we have stretched to reach out to local communities and we had to break the burden of 23 years after neglect of the city which manifested into garbage and weeds in the drainages and a number of other things that affected the image of the country.“
He called on property owners to pay outstanding rates to help the city to pay its debts. “If you would recall, the Treasurer reported we have $22 billion outstanding. A large portion of that is owed by the business community. We are asking corporate citizens and householders to come in a settle their accounts so we can honor our obligations with our contractors, so we can provide vital services to communities,” King said.
The city continues to rack up debt as its recorded expenditure continuously outstrips its recorded income. Last month, it spent $161,683,750, which is more than double its recorded income.
In May, both firms had threatened to end their services to the council over debts owed by the city. “We were owed $97 million and were paid $1.2 million. We keep asking the bank to bear with us as we have our own debts but there is only so much they can bear,” General Manager of Puran Brothers Waste Disposal Inc Kaleshwar Puran later told this newspaper in August.
Similar sentiments were expressed by Chief Executive Officer of Cevons Waste Management Morse Archer. “We are owed $168 million.
We can’t go on. We have exhausted our monies and are existing at the mercy of people crediting us. If we don’t get substantial payment we will be forced to strike,” he said.
