Power pain just being postponed: Shilamba

THE recent public outcry against a proposed 35 per cent power price hike was ‘mainly based on misinformation’ – something the media should be held responsible for, NamPower MD Paulinus Shilamba said yesterday.

Speaking at the groundbreaking ceremony of the Anixas diesel-fulled power station at Walvis Bay, he said the 35 per cent proposal was based on a Cabinet decision of 2005 which stipulated that Namibia’s electricity prices need to be cost reflective by 2011.
Because the Electricity Control Board (ECB) only approved an 18 per cent price increase, NamPower will be selling power at a loss for the next year.
Furthermore, it will make it difficult for the country to attract investments in the power sector without showing any returns, he said.
According to Shilam-ba, the cost reflectivi- ty requirement has been postponed to 2012.
He said this means that consumers will have to tighten their belts ‘for another high price hike next year and beyond’.
The national power supplier will try and make ends meet this year by subsidising customers with profits from non-core business – for example, investment income and Powercom sales – of last year, Shilamba said.
However, the future looks bleak for the company should prices not be increased.
According to Shilamba, the company intends to spend N$17,4 billion on development over the next four to five years. Although Government has already given it a N$1 billion injection, NamPower will have to resort to loans and further price increases to help foot this capital projects bill.
On his part, the Minister of Mines and Energy, Isak Katali, said it needs to be borne in mind that the SADC region is facing a critical shortage of electricity due to inadequate investment in power generation projects.
‘We all know that Namibia is no exception and that the situation is likely to continue for years to come,’ he said.
Katali described the fact that the existing power stations cannot meet the increasing demand as ‘precarious’.
‘This shortfall that the SADC region is experiencing poses major economic and political risk to the region and the individual countries affected by this power crisis.’
Anixas – a 22-megawatt diesel power generator which is expected to be in operation from the start of next year – will cost N$375 million in total.
The Government subsidised a third of the costs – N$250 million. Katali said: ‘Parastatals must be able to do things on their own, but when it comes to national and strategic issues, the Government is on standby.’