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Government has reportedly released K115.5 million towards the settlement of terminal benefits arrears owed by the country’s eleven Commercial Water Utility Companies to their retired employees.
Ministry of Water Development and Sanitation said the funding intervention was part of Government’s continued commitment to addressing longstanding financial obligations within the water supply and sanitation sector while safeguarding the welfare of retirees.
In a statement issued in Lusaka on Saturday, Ministry Permanent Secretary, Romas Kamanga, said the 11 Commercial Water Utilities have over the years accumulated substantial financial liabilities largely due to liquidity constraints arising from outstanding water and sanitation bills owed by Government institutions.
To address this, Kamanga said Government had implemented a debt-swap mechanism under which the K115.5 million released by the Treasury will be used exclusively to settle terminal benefits for retired employees.
“The intervention is expected to provide immediate relief to retirees and restore confidence among current and former employees, and contribute to improved operational efficiency within the Commercial Water Utilities,” Kamanga said.
He explained that the amount paid would simultaneously reduce the outstanding debt owed by Government to the Commercial Water Utilities, thereby strengthening the financial position of the utilities without creating additional liabilities for the Treasury.
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According to Kamanga, through this allocation, seven of the eleven Commercial Water Utilities will have their terminal benefit obligations fully settled.
The remaining utilities with larger outstanding liabilities will receive substantial partial payments, he said.
Kamanga assured that the Government remained committed to mobilising additional resources to clear the outstanding balances in subsequent funding tranches.
“The Ministry has directed all Commercial Water Utilities to ensure that the funds are applied strictly towards the payment of terminal benefits and not diverted to any other operational expenditures,” he said.
In line with the Public Finance Management Act No. 1 of 2018, Kamanga said all beneficiary utilities would be required to submit audited expenditure returns to ensure transparency, accountability and prudent utilisation of public resources.
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