ECB ups pressure on SELCo deal

THE Keetmanshoop Municipality could lose its electricity distribution and supply licence if it fails to reinstate the Southern Electricity Company (SELCo), its contracted electricity distributor, the Electricity Control Board (ECB) warned yesterday.

By yesterday, the Keetmanshoop Municipality had failed to heed an ECB request and asked for more time from the control board to consider taking the move. The original deadline was midday yesterday.ECB CEO Siseho Simasiku said the ECB Board’s request to the municipality was based on its concern about the effect the termination of the 15-year contract would have on the consumer and the town’s service delivery.”The ECB is not convinced that the Council’s recent attempts to ‘take back’ the supply of electricity in Keetmanshoop are beneficial to the efficient supply and utilisation of electricity,” Simasiku told the media in Windhoek.It was also not convinced “that the Keetmanshoop Local Authority has the capacity to, within such a short period, effectively and efficiently supply electricity to its residents and that actions are taking place within the scope of the law,” Simasiku said.Simasiku said the ECB was “gravely concerned” by recent developments at Keetmanshoop over the supply of electricity and that recent events were “regrettable” and “unfortunate”.The Keetmanshoop Municipality holds the electricity distribution and supply licence for the area, which Simasiku said was issued based on their partnership with SELCo to manage the network.The ECB said it would not involve itself in the legal dispute that is being instituted by SELCo for damages as a result of the council’s termination of its contract.He said the ECB had been “dragged into the matter” but that it was not the board’s intention to become involved in squabbles between the council and SELCo.The Minister of Mines and Energy on Thursday requested that the ECB investigate the situation at Keetmanshoop.Simasiku said Government did not support the way the Keetmanshoop Municipality had handled the termination of the SELCo contract.”Whatever the grievances of the Council, we believe these things can be negotiated,” said Simasiku, rejecting claims that the ECB was in “support of SELCo”.”We are not standing with SELCo.We are not standing with anybody.We have no interest,” said Simasiku.The ECB said yesterday that as far as could be established to date, the distribution and supply of electricity had not yet been affected by the council’s rash move, but that there had been reports that SELCo was being prohibited from collecting its revenue at certain pay points.SELCo’s Managing Director, Allen Van Zyl, said in a statement yesterday that the company would not comment on the matter because it was being handled by the courts.The ECB said by terminating its contract with SELCo, the Keetmanshoop municipality had acted contrary to advice the ECB had provided to councils who have contracts with SELCo, which would help them to negotiate acceptable resolutions on their future relationship with the electricity supply company.”We are surprised that the Keetmanshoop Council elected to act outside the scope of established structures, principles and forums developed to specifically deal with the supply of electricity by SELCo.The actions taken by the Keetmanshoop Council have much potential to impact negatively on the efficient supply of electricity in Keetmanshoop, on the establishment of Southern RED and on the image of Namibia in the international arena,” said Simasiku.Central to the termination of its contract with SELCo is the Keetmanshoop municipality’s claims that SELCo has failed to pay royalties due to it.This has largely stemmed from a refusal by the council and residents to accept tariffs imposed by SELCo.To this end, the ECB said yesterday that the current tariffs being charged by SELCo were in line with that approved by the board last year.These tariffs, the ECB said, were both “cost-reflective” and compared favourably with tariffs of similar service providers.Although NamPower announced its tariff hikes earlier this year and many municipalities increased theirs in line with this move, the Keetmanshoop Municipality have not increased their electricity tariffs this year.The ECB said it had advised the municipality to do so last month in order to send “the correct price signals to their customers and avoid substantial increases later”.The Council has not responded to the ECB on this matter.The ECB further said that the Council had on occasion refused to meet with its representatives to iron out matters relating to its contract with SELCo.The original deadline was midday yesterday.ECB CEO Siseho Simasiku said the ECB Board’s request to the municipality was based on its concern about the effect the termination of the 15-year contract would have on the consumer and the town’s service delivery. “The ECB is not convinced that the Council’s recent attempts to ‘take back’ the supply of electricity in Keetmanshoop are beneficial to the efficient supply and utilisation of electricity,” Simasiku told the media in Windhoek.It was also not convinced “that the Keetmanshoop Local Authority has the capacity to, within such a short period, effectively and efficiently supply electricity to its residents and that actions are taking place within the scope of the law,” Simasiku said.Simasiku said the ECB was “gravely concerned” by recent developments at Keetmanshoop over the supply of electricity and that recent events were “regrettable” and “unfortunate”.The Keetmanshoop Municipality holds the electricity distribution and supply licence for the area, which Simasiku said was issued based on their partnership with SELCo to manage the network.The ECB said it would not involve itself in the legal dispute that is being instituted by SELCo for damages as a result of the council’s termination of its contract.He said the ECB had been “dragged into the matter” but that it was not the board’s intention to become involved in squabbles between the council and SELCo.The Minister of Mines and Energy on Thursday requested that the ECB investigate the situation at Keetmanshoop.Simasiku said Government did not support the way the Keetmanshoop Municipality had handled the termination of the SELCo contract.”Whatever the grievances of the Council, we believe these things can be negotiated,” said Simasiku, rejecting claims that the ECB was in “support of SELCo”.”We are not standing with SELCo.We are not standing with anybody.We have no interest,” said Simasiku.The ECB said yesterday that as far as could be established to date, the distribution and supply of electricity had not yet been affected by the council’s rash move, but that there had been reports that SELCo was being prohibited from collecting its revenue at certain pay points. SELCo’s Managing Director, Allen Van Zyl, said in a statement yesterday that the company would not comment on the matter because it was being handled by the courts.The ECB said by terminating its contract with SELCo, the Keetmanshoop municipality had acted contrary to advice the ECB had provided to councils who have contracts with SELCo, which would help them to negotiate acceptable resolutions on their future relationship with the electricity supply company.”We are surprised that the Keetmanshoop Council elected to act outside the scope of established structures, principles and forums developed to specifically deal with the supply of electricity by SELCo.The actions taken by the Keetmanshoop Council have much potential to impact negatively on the efficient supply of electricity in Keetmanshoop, on the establishment of Southern RED and on the image of Namibia in the international arena,” said Simasiku.Central to the termination of its contract with SELCo is the Keetmanshoop municipality’s claims that SELCo has failed to pay royalties due to it.This has largely stemmed from a refusal by the council and residents to accept tariffs imposed by SELCo.To this end, the ECB said yesterday that the current tariffs being charged by SELCo were in line with that approved by the board last year.These tariffs, the ECB sai
d, were both “cost-reflective” and compared favourably with tariffs of similar service providers.Although NamPower announced its tariff hikes earlier this year and many municipalities increased theirs in line with this move, the Keetmanshoop Municipality have not increased their electricity tariffs this year.The ECB said it had advised the municipality to do so last month in order to send “the correct price signals to their customers and avoid substantial increases later”.The Council has not responded to the ECB on this matter.The ECB further said that the Council had on occasion refused to meet with its representatives to iron out matters relating to its contract with SELCo.