Court reinstates SELCo at Keetmanshoop

THE High Court yesterday ruled in favour of the Southern Electricity Company (SELCo), granting it an interim interdict to immediately resume its responsibility for electricity provision at Keetmanshoop.

In terms of the interdict, the Keetmanshoop Municipality was ordered to adhere to the terms of the Electricity Management Contract with SELCo; to return the premises, infrastructure and equipment relating to supply and distribution to SELCo; not to interfere in any way with SELCo’s operations in terms of the agreement; fully co-operate in the proper management of the electricity supply and distribution, and pay the legal costs for bringing the application. In the absence of any legal representation for the Keetmanshoop Municipality, which summarily notified SELCo last week that it was terminating their 15-year contract, Acting Judge Simpson Mtambanengwe granted the interdict after Advocate George Coleman, acting for SELCo, said the Keetmanshoop Municipality was fully aware of the urgent application.Mtambanengwe noted that it appeared that people who made orders in the matter were “very misguided”.Coleman said he had been informed on Tuesday by a lawyer acting for the Keetmanshoop Municipality that the council intended to oppose the motion.The interdict will remain in place until the matter returns to court on October 3, at which time the Keetmanshoop Municipality is expected to explain its side of the story, if it sticks by a decision to terminate its contract with SELCo four years after entering into it.The Keetmanshoop Municipality has refused to approve an increase in tariffs by SELCo for the last two years, in line with price hikes by bulk supplier NamPower, and approved by the Electricity Control Board.In turn, SELCo has been withholding the payment of monthly royalties of N$140 000, of which it has been paying N$32 500 to the municipality in advance to help it pay its debts.After the High Court order was conveyed to it, the Keetmanshoop Town Council indicated to The Namibian that it would still pursue plans to cancel its contract with SELCo.The Municipality’s Chief Executive Officer, Jerry Shangadi, said the council had expected the High Court to find in favour of SELCo’s urgent application, because they did not have enough time to submit an opposing affidavit.”This is normal court procedure, thus the Council respects the court order and will obey it,” Shangadi said.Shangadi indicated to The Namibian that the council’s legal representatives would soon submit an opposing affidavit in response to SELCo’s court application.On Friday, SELCo lawyers served legal papers for the Keetmanshoop Municipality, the Electricity Control Board (ECB), the Minister of Mines and Energy and the Minister of Regional, and Local Government and Housing, all on the Government Attorney.The Keetmanshoop Municipality was informed that the Government Attorney could not represent it, as it would be representing the other respondents in the matter.No relief is being sought from the ECB or the Government in the matter, and they have been cited as respondents for the various roles they play in the supply of electricity, which the Keetmanshoop Local Authority is expected to provide.The ECB and the Ministries said earlier this week that they were not in favour of the Keetmanshoop Municipality unilaterally terminating its contract with SELCo and would rather the parties first negotiated on the contentious issues.In his affidavit to the court, SELCo Managing Director Allen van Zyl maintained that the Keetmanshoop Municipality was incapable of managing and maintaining the electricity supply at the town, and hence the decision in the first place to contract SELCo to manage the system.SELCo says it has invested N$9 million in the upgrading of infrastructure and management systems for the distribution of electricity at the town.SELCo has similar agreements for the supply of electricity at Karasburg and Aranos, where it says it has spent a further N$3 million upgrading these networks.SELCo employs 17 people at a cost of N$120 000 a month and has a monthly turnover about N$1,8 million.Van Zyl further contends that the Keetmanshoop Municipality is virtually bankrupt and would be unable to repay SELCo for the improvements it has made to the electricity distribution and supply system, as well as the losses it would suffer as a result of the termination – estimated to be around N$61 million.In the absence of any legal representation for the Keetmanshoop Municipality, which summarily notified SELCo last week that it was terminating their 15-year contract, Acting Judge Simpson Mtambanengwe granted the interdict after Advocate George Coleman, acting for SELCo, said the Keetmanshoop Municipality was fully aware of the urgent application.Mtambanengwe noted that it appeared that people who made orders in the matter were “very misguided”.Coleman said he had been informed on Tuesday by a lawyer acting for the Keetmanshoop Municipality that the council intended to oppose the motion.The interdict will remain in place until the matter returns to court on October 3, at which time the Keetmanshoop Municipality is expected to explain its side of the story, if it sticks by a decision to terminate its contract with SELCo four years after entering into it.The Keetmanshoop Municipality has refused to approve an increase in tariffs by SELCo for the last two years, in line with price hikes by bulk supplier NamPower, and approved by the Electricity Control Board.In turn, SELCo has been withholding the payment of monthly royalties of N$140 000, of which it has been paying N$32 500 to the municipality in advance to help it pay its debts.After the High Court order was conveyed to it, the Keetmanshoop Town Council indicated to The Namibian that it would still pursue plans to cancel its contract with SELCo.The Municipality’s Chief Executive Officer, Jerry Shangadi, said the council had expected the High Court to find in favour of SELCo’s urgent application, because they did not have enough time to submit an opposing affidavit.”This is normal court procedure, thus the Council respects the court order and will obey it,” Shangadi said.Shangadi indicated to The Namibian that the council’s legal representatives would soon submit an opposing affidavit in response to SELCo’s court application.On Friday, SELCo lawyers served legal papers for the Keetmanshoop Municipality, the Electricity Control Board (ECB), the Minister of Mines and Energy and the Minister of Regional, and Local Government and Housing, all on the Government Attorney.The Keetmanshoop Municipality was informed that the Government Attorney could not represent it, as it would be representing the other respondents in the matter.No relief is being sought from the ECB or the Government in the matter, and they have been cited as respondents for the various roles they play in the supply of electricity, which the Keetmanshoop Local Authority is expected to provide.The ECB and the Ministries said earlier this week that they were not in favour of the Keetmanshoop Municipality unilaterally terminating its contract with SELCo and would rather the parties first negotiated on the contentious issues.In his affidavit to the court, SELCo Managing Director Allen van Zyl maintained that the Keetmanshoop Municipality was incapable of managing and maintaining the electricity supply at the town, and hence the decision in the first place to contract SELCo to manage the system.SELCo says it has invested N$9 million in the upgrading of infrastructure and management systems for the distribution of electricity at the town.SELCo has similar agreements for the supply of electricity at Karasburg and Aranos, where it says it has spent a further N$3 million upgrading these networks.SELCo employs 17 people at a cost of N$120 000 a month and has a monthly turnover about N$1,8 million.Van Zyl further contends that the Keetmanshoop Municipality is virtually bankrupt and would be unable to repay SELCo for the improvements it has made to the electricity distribution and supply system, as well as the losses it would suffer as a result of t
he termination – estimated to be around N$61 million.