The Southern Electricity Supply Company (SELCo) has entered into 15-year contracts with most local authorities in Namibia's Hardap and Karas Regions, sparking widespread unhappiness and community protests at Keetmanshoop and Karasburg.

SELCo Namibia's shareholders include several prominent figures, including the Chief Executive Officer of the Karas Regional Council, Joseph Stephanus and Toivo Nampala, Councillor for the Oranjemund constituency, who is also a member of the Karas Regional Council management committee.

Other local shareholders are Abraham Kukuri, the former managing director of NamPost, Salomon Witbooi, a nephew of Deputy Prime Minister Hendrik Witbooi, Phillicia Hercules, an employee of a Luderitz fishing company in which Government holds a controlling share, and Leonard Stephanus, Chief Control Officer of the Hardap Regional Council.

No details are available about the remaining two directors, Gavin Boois and R Lifasi.

The company has set its sights on taking over the delivery and management of power and water to local authorities throughout the South, according to documents in The Namibian's possession.

SELCo, which is listed on the Johannesburg Stock Exchange, has already signed exclusive contracts to run the electricity networks of Keetmanshoop, Aranos, Karasburg, Ariamsvlei, Aus, Grunau Noordoewer and Warmbad.

And the company is confident of signing similar contracts with Mariental and Luderitz, according to a report to its shareholders.

WATER RIGHTS

A clause in the company's contracts also give it the right "at any time" within 12 months of signing to exercise "a call option" to take over the operation and management of water networks.

The controversial contracts were thrust into the spotlight in the wake of last week's demonstration against escalating electricity costs by Karasburg residents.

There are also claims of a serious contractual dispute between the company and the Town Council.

Last year there were also protests over a contract signed between SELCo and the Keetmanshoop municipality and the escalation of electricity costs after it took over.

The contracts provide the company with "attractive annuity income streams", SELCo reported in a profits forecast for the financial year ending June 30 2003.

"[The] process of establishing SELCo Namibia as the RED (regional electricity distribution) company in the Southern region is accordingly well advanced," the report said.

SELCO RESPONDS

In a statement to The Namibian, SELCo strongly defended the Karasburg contract and claimed it had been verified by several legal experts, including the Office of the Attorney General, and was found to be "sound".

But a letter from the Attorney General to the Ministry of Regional, Local Government Housing, dated March 14 2003, relating to the dispute between the Karasburg Town Council and SELCo, contradicts this claim.

"It is our instruction that the council (at Karasburg) was dissatisfied with the services of SELCo, for reasons not stated, and that the council was of the view that the contract was not adhered to," the AG's letter stated.

"In order to render a legal opinion in this matter, further clarification and/or instructions from the Council are sought as to the reasons for the Council's dissatisfaction with SELCo".

Sources in Karasburg claim the writing of the contract was left to SELCo, leading some Council members to dispute some of the contents.

Some Councillors claimed that only a 10-year contract, as opposed to the 15-years in the final contract, had been negotiated.

The Namibian has established that at the signing of the contract the Council was only represented by Franciskus Witbooi, the Town Clerk, who was accompanied by one official from the Finance Department.

Well-placed sources at the town told The Namibian that the Council had become concerned over "gross oversights" in the contract that became apparent after it was signed.

So concerned was the Council that it appointed an ad-hoc committee, which included members of the community, to help resolve the problem.

But this ended in failure and several members of the committee then resigned and joined forces with the community to "expose" alleged irregularities in the contract.

Minutes of a meeting of the ad-hoc committee on July 10 2002, reveal that the Council was warned that problems could arise from the fact that no minutes of the negotiations with SELCo were kept.

"[It] will become unavoidable to hide the fact that the entire process of the contract negotiations went unrecorded," Lazarus Khairabeb, the (then) chairman of the ad-hoc committee warned in a meeting with the Town Council.

Town Clerk Witbooi yesterday denied any dispute with SELCo, claiming that the contract was "just okay".

It later transpired that although the committee was only appointed in February 2002, the contract had been signed 19 months earlier in July 2000.

As a result, SELCo refused to entertain any attempts at renegotiating the contract.

"If the (ad hoc) committee wishes to make any remonstrations now, it should do so with respect to the local authority officials who entered into the contract and charge them with failing to properly apply their minds or, alternatively with negligence due to their failure to appoint such an ad hoc committee at a stage when they (councillors) were in need of guidance," SELCo wrote in a letter on June 3, 2002.

Declining to comment on the factors that led to the appointment of the ad hoc committee and the reason this only happened two years after the contract was signed, the Karasburg Town Clerk responded: "That was another political issue, I can't comment.

It was not clear to me why it was necessary to appoint the committee ... maybe possible problems with SELCo which I don't know about".

Shareholding of SELCo Namibia

South African-based shareholders:
Rural Maintenance - 51,8 per cent
RMMS Consulting - 28,16 per cent
Allen van Zyl - 1,41 per cent

Namibian shareholders, position, shareholding
Namibian Transmission Lines - 9,38 per cent
Joseph Stephanus (CEO Karas Regional Council)- 1,35 per cent
Abraham Kukuri (former MD of NamPost)- 1,35 per cent
Toivo Nambala (Councillor of Oranjemund and also member of the management committee of the Karas Regional Council) - 1,35 per cent
Philicia Hercules - Employed by the Sea Flower Shite Fish Corporation, Luderitz, in which Government holds a majority share - 1,13 per cent
Gavin Boois - (unknown) 1,13 per cent
Leonard Stephanus - (Chief Control Officer of the Hardap Regional Council) -1,13 per cent
Salomon Witbooi (nephew of Deputy Prime Minister) - 1,13 per cent
R Lifasi (Unknown) - 0,90 per cent

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