Coastal councils see red over RED

THE Electricity Control Board (ECB) is expected to come under fire today from Council representatives at Swakopmund and Walvis Bay over the Erongo Regional Electricity Distributor (Erongo RED), The Namibian established yesterday.

Far from improving the situation of the two coastal councils, they say E-RED has left them worse off. Surpluses are down, neither Council has yet received a dividend from Erongo RED and they and their communities are adversely affected.The Swakopmund Municipality has reached the point where it is ready to take its case with Erongo RED to the highest echelons of Government.At a recent meeting, the two Councils found that they shared the same concerns and had therefore decided to jointly meet with the ECB today.Both the Swakopmund and Walvis Bay Councils – who together own a 75 per cent share in Erongo RED – feel that, contrary to assurances by the Minister of Local Government and Housing that that they would be better off after Erongo RED was established, they and their communities have actually been adversely affected.To make matters worse, these two shareholders are still waiting for their first dividend from Erongo RED, which is said to be overdue.At the same time, The Namibian has learned that Erongo RED workers are negotiating salary increases of up to 8 per cent.Although the figure was not confirmed, a source at Erongo RED said there were negotiations with the Mineworkers Union in this regard.During the tabling of the Swakopmund Council’s 2007-2008 budget at the end of April, Paul Rooi of the Council’s Management Committee lashed out at Erongo RED and the negative impact it has had on Council revenue.He said the Council had enjoyed a 21 per cent growth a year in surpluses generated until the 2004-2005 financial year.However, since Erongo RED was established, the surplus has decreased by nearly 50 per cent, while the Council was still responsible for the distribution of electricity.It is feared that this will lead to sharp increases in rates and taxes.This decrease, according to Rooi, was because Council now receives a monthly fee called the LA surcharge.This is not making the council better off as was promised by the Minister of Mines and Energy, Erkki Nghimtina.Rooi said in the budget speech that the construction of offices and other facilities by Erongo RED, additional to infrastructure and assets transferred to them from the different local authorities, required huge amounts of money which automatically had a negative effect on the company’s financial results.Therefore, no funds were available for payment of dividends to Council as per agreement, he said.”The Erongo RED company should be requested to immediately freeze all extension of capital outlays until such time that sufficient funds are generated to finance the payment of dividends to Council, as well as those capital outlays needed or required,” Rooi said.Surpluses are down, neither Council has yet received a dividend from Erongo RED and they and their communities are adversely affected.The Swakopmund Municipality has reached the point where it is ready to take its case with Erongo RED to the highest echelons of Government.At a recent meeting, the two Councils found that they shared the same concerns and had therefore decided to jointly meet with the ECB today.Both the Swakopmund and Walvis Bay Councils – who together own a 75 per cent share in Erongo RED – feel that, contrary to assurances by the Minister of Local Government and Housing that that they would be better off after Erongo RED was established, they and their communities have actually been adversely affected.To make matters worse, these two shareholders are still waiting for their first dividend from Erongo RED, which is said to be overdue.At the same time, The Namibian has learned that Erongo RED workers are negotiating salary increases of up to 8 per cent.Although the figure was not confirmed, a source at Erongo RED said there were negotiations with the Mineworkers Union in this regard.During the tabling of the Swakopmund Council’s 2007-2008 budget at the end of April, Paul Rooi of the Council’s Management Committee lashed out at Erongo RED and the negative impact it has had on Council revenue.He said the Council had enjoyed a 21 per cent growth a year in surpluses generated until the 2004-2005 financial year.However, since Erongo RED was established, the surplus has decreased by nearly 50 per cent, while the Council was still responsible for the distribution of electricity.It is feared that this will lead to sharp increases in rates and taxes.This decrease, according to Rooi, was because Council now receives a monthly fee called the LA surcharge.This is not making the council better off as was promised by the Minister of Mines and Energy, Erkki Nghimtina.Rooi said in the budget speech that the construction of offices and other facilities by Erongo RED, additional to infrastructure and assets transferred to them from the different local authorities, required huge amounts of money which automatically had a negative effect on the company’s financial results.Therefore, no funds were available for payment of dividends to Council as per agreement, he said.”The Erongo RED company should be requested to immediately freeze all extension of capital outlays until such time that sufficient funds are generated to finance the payment of dividends to Council, as well as those capital outlays needed or required,” Rooi said.