Keetmanshoop power struggle placed in High Court’s hands

THE Keetmanshoop Municipality’s attempt to wriggle out of a controversial agreement that put a private company, Southern Electricity Company, in charge of the town’s electricity provision became the subject of a day-long hearing in the High Court in Windhoek on Friday.

Judge Kato van Niekerk reserved judgement after hearing legal arguments from George Coleman, representing Southern Electricity Company (SELCo), and Rudi Cohrssen, who is representing the Keetmanshoop Municipal Council. Friday’s hearing was the latest chapter to be written in a court case in which SELCo approached the High Court on an urgent basis in September last year in a bid to save the 15-year contract that put the company in charge of delivering electricity to Keetmanshoop residents.In terms of the agreement between SELCo and the Keetmanshoop Municipality, SELCo took over the municipality’s electricity distribution network in September 2001.The company was set to remain in charge of electricity distribution at the town for the next 15 years.The Keetmanshoop Municipality terminated the agreement at the end of August last year, however, and evicted SELCo from the town’s electricity infrastructure.SELCo responded by going to court, where it got an interim order that directed the Keetmanshoop Municipality to return control over the town’s power network to the company.Coleman asked the court on Friday to confirm this order, so that SELCo would continue being in control of electricity services at Keetmanshoop while it and the Municipality pursued dispute resolution procedures to sort out the disagreements that have bedevilled the relationship between the two parties.Part of these disagreements is a proposal from SELCo for electricity tariffs at the town to be increased.SELCo attracted the ire of a substantial section of the Keetmanshoop community when electricity tariffs were increased significantly after it took over the power distribution at the town.’A SHAMBLES’ The company claims that it found a power system that was in shambles, with regular power failures and no effective systems for the collection of payments from customers in place.It claims to have invested N$9 million on upgrading the infrastructure and establish a proper management system.According to the Municipality, however, the agreement that was reached with SELCo has been unlawful and invalid from the start.Not only were mandatory tender procedures not followed before the agreement was concluded, but the prior written approval of the Minister of Regional and Local Government and Housing was also not obtained – something that is required by law – beforehand, Cohrssen stated to the court in his arguments.It is not as simple as saying that the agreement was illegal, and that it would then be the end of the matter, Coleman argued.The fact remains that a contract had been signed, and that the Municipality then ended it in clear breach of the contract’s termination clause, he told the court.Cohrssen also attacked the legality of a “loan” that SELCo extended to the cash-strapped Keetmanshoop Municipality when it advanced some N$1,1 million to the local authority.On that point, at least, he and Coleman were in agreement.The Minister’s approval was needed for that, Coleman agreed, commenting that this had not been “a very good exercise” of the Municipality’s power.Coleman was acting on the instructions of attorney Richard Mueller.Cohrssen was assisted by Deon Obbes, on the instructions of lawyer Sarel Maritz and Keetmanshoop law firm Rissik, Cox & Probart.Friday’s hearing was the latest chapter to be written in a court case in which SELCo approached the High Court on an urgent basis in September last year in a bid to save the 15-year contract that put the company in charge of delivering electricity to Keetmanshoop residents.In terms of the agreement between SELCo and the Keetmanshoop Municipality, SELCo took over the municipality’s electricity distribution network in September 2001.The company was set to remain in charge of electricity distribution at the town for the next 15 years.The Keetmanshoop Municipality terminated the agreement at the end of August last year, however, and evicted SELCo from the town’s electricity infrastructure.SELCo responded by going to court, where it got an interim order that directed the Keetmanshoop Municipality to return control over the town’s power network to the company.Coleman asked the court on Friday to confirm this order, so that SELCo would continue being in control of electricity services at Keetmanshoop while it and the Municipality pursued dispute resolution procedures to sort out the disagreements that have bedevilled the relationship between the two parties.Part of these disagreements is a proposal from SELCo for electricity tariffs at the town to be increased.SELCo attracted the ire of a substantial section of the Keetmanshoop community when electricity tariffs were increased significantly after it took over the power distribution at the town.’A SHAMBLES’ The company claims that it found a power system that was in shambles, with regular power failures and no effective systems for the collection of payments from customers in place.It claims to have invested N$9 million on upgrading the infrastructure and establish a proper management system.According to the Municipality, however, the agreement that was reached with SELCo has been unlawful and invalid from the start.Not only were mandatory tender procedures not followed before the agreement was concluded, but the prior written approval of the Minister of Regional and Local Government and Housing was also not obtained – something that is required by law – beforehand, Cohrssen stated to the court in his arguments.It is not as simple as saying that the agreement was illegal, and that it would then be the end of the matter, Coleman argued.The fact remains that a contract had been signed, and that the Municipality then ended it in clear breach of the contract’s termination clause, he told the court.Cohrssen also attacked the legality of a “loan” that SELCo extended to the cash-strapped Keetmanshoop Municipality when it advanced some N$1,1 million to the local authority.On that point, at least, he and Coleman were in agreement.The Minister’s approval was needed for that, Coleman agreed, commenting that this had not been “a very good exercise” of the Municipality’s power.Coleman was acting on the instructions of attorney Richard Mueller.Cohrssen was assisted by Deon Obbes, on the instructions of lawyer Sarel Maritz and Keetmanshoop law firm Rissik, Cox & Probart.