|March 6, 2002
Electricity distribution issue in the North not yet resolved
A feud between government agencies over electricity distribution entered
a new chapter yesterday when the Electricity Control Board (ECB) told Nored to
take over Northern Electricity as a going concern.
Nored, a company jointly owned by NamPower, eight regional councils and
seven municipalities, takes over power distribution from Northern Electricity,
a private company, at midnight on March 12.
Electricity Control Board chairperson Klaus Dierks said that the ECB had
been unwilling to grant a licence to Nored, but was effectively forced to do so
by the Ministry of Regional and Local Government and Housing.
The ECB has said Nored did not have enough technical expertise or
financial resources to manage the contract.
However, the Ministry, which has retained the physical distribution
facilities, have announced they would only let these assets be used by Nored
and not by Northern Electricity. It is understood that the Ministry favours
Nored because it has the involvement of local councils.
The permanent secretary and other senior officials could not be traced
for comment yesterday, however.
In such circumstances, the ECB felt it had no choice but to grant the
licence to Nored, but are still worried about what would transpire.
"I get butterflies in my stomach when I think what may happen next
week," said Dierks.
After one year the licence will be reviewed subject to Nored's
performance. Nored has been forced to take over Northern Electricity "as an
operating entity or else appoint them as operators."
Chief Executive of the ECB, Siseho Simasiku, said that under the new
Electricity Act, regional electricity distributing companies would have to be
set up in all areas of the country. He said he hoped this could include more
private sector involvement, and allow for more competition for Nampower. He
said he felt the private sector was not sufficiently represented in the Nored
Nored's deputy chairperson Imker Hoogenhout, who is also a senior
manager at NamPower, said it was unfair that a company be given a licence and
then told how it must conduct its business.
He thought such conditions exceeded the ECB's mandate. He said the
regional electricity distributors would, under the new law, have to be "asset
based", and therefore a company like Northern Electricity, which did not own
the assets themselves, would not be feasible. He said it was "nonsense" that
Nored did not have the financial resources to do the job.
He admitted they did not have staff, but said the ECB was partly to
blame for this, by announcing the new licence so close to the end of Northern
Hoogenhout said it was unlikely that Nored could take over the entire
Northern Electricity business by March 12, but transitional arrangements would
be made to "ensure the lights do not go out."