Cotton Company of Zimbabwe (Cottco) transporters contracted for the 2023-2024 farming season are demanding payment in US dollars for their services, citing a breach of contract by the cotton company.
The transporters, represented by the Cottco Transporters group, accuse Cottco of failing to settle their accounts “in full or part timeously,” forcing some to withdraw their trucks and halt operations.
“The contracts in issue, varying in scope and duration and periods, were denominated in USD,” the transporters said in a letter addressed to the Cottco Board Chairperson.
“Cottco had been paying us in the same currency before they defaulted on payments which extended up to this day.”
The crux of the issue lies in the recent shift to the Zimbabwean dollar (ZWL), also known as ZIG. The transporters argue that the new monetary policy should not apply retroactively to their contracts, which were signed before the ZWL’s introduction.
“We believe Cottco should not apply the ZIG payment policy in retrospect but should be guided by the contract,” they said.
The transporters claim they have been understanding of Cottco’s past financial struggles, but allege a recent shift in tactics.
“Quite shockingly, recently, Cottco seems to be have raised resources and ready to pay the transporters, albeit, in ZIG,” the letter reads. “One could be forgiven to believe that the client seeks to exploit the changes in our currency to the transporter’s detriment.”
According to the transporters, their operating costs are all USD-denominated, including loans, employee salaries, rentals, and fuel. They argue that accepting ZWL would leave them struggling to meet their financial obligations.
“The transporter appreciates all challenges that are alleged to be bedevilling the company,” the letter acknowledges. “Unfortunately, the individual contracts remain ex tandi binding and lawful agreements.”
The transporters also raise concerns about a potential conflict of interest within Cottco’s management.
“Of concern is the revelation that certain members of management are alleged to be competing with the transporters and it will be curious to check on their respective accounts to see if they are owed,” the letter states.
“The conflict of interest is gross and stinks of bad faith.”
The group pleaded for fair treatment.
“In view of the above compelling issues, reasons and facts transporters humbly request Cottco to settle their overdue payments in USD as per contract,” they wrote.
“In all circumstances, it is fair, just and equitable that settlement be made as contracted.”
