Another RED Soon Up and Running


By Petronella Sibeene WINDHOEK Remarkable progress has been made with regard to the full implementation of the Southern Regional Electricity Distributor (SORED). The project will become operational early in July 2006. According to the Karas Chief Regional Officer and the Chairperson of the SORED Technical Committee, Salmaan Jacobs, all the councils in the region have approved stipulations in the corporate governance framework. The framework prescribes council shareholding criteria, allocation and the structure of the company. The Keetmanshoop, Karasburg, Mariental, Rehoboth, and LÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼deritz municipalities as well as Hadarp and Karas regional councils are all stakeholders in SORED. Last week, Jacobs confirmed that the technical committee appointed BDO as its auditing company once SORED is in full operation in the region. Currently, the committee is looking into appointing seven directors, four from the local authorities, two from NamPower and one from the regional councils. “So far, we have been able to get everything and the time frame says that we start operating from July 01, 2006. We hope to start,” he stated. SORED, which was established in 2004, was expected to have gone into operation in July 2005 but logistics proved it was practically impossible. While all local and regional councils seem eager that SORED would soon start operating, a few challenges still face Keetmanshoop and Rehoboth. Currently, SELCo supplies Keetmanshoop with electricity and Reho Electricity operates at Rehoboth. Initially, the Electricity Control Board (ECB) worked out a methodology on how surcharges would be done. Surcharge is the amount paid to the local authorities by the power supplier in given areas. So far, the two town councils at Keetmanshoop and Rehoboth have expressed dismay over the amount they are receiving, describing it as “peanuts” despite these electricity suppliers making huge profits. “For example, SELCo makes profit of about N$2.5 million per month and gives only N$150 000 as surcharge. The remainder belongs to SELCo,” elaborated Jacobs. He added that the two towns feel the methodology on surcharges should be reviewed before SORED starts operating and as SELCo phases out. A sub-committee has already been formed to discuss pending issues with SELCo and the affected towns of Aranos, Keetmanshoop and Karasburg. “We want to hear their side of the story and see how we can come up with a final solution,” Jacobs said. Despite the concerns, Keetmanshoop and Rehoboth support the implementation of SORED. Jacobs added, “We want to bring change to the current operation and see that business is conscious of providing cost-effective services and harmonize tariffs by considering the social economic status of people in the region.” SORED will be the main power supplier in the southern parts of the country and whatever company might want to become an operator would have to do it under SORED. “All operators will now be under one license – SORED,” Jacobs told New Era. The Northern Regional Electricity Distributor (NORED) was the first RED to be established and became operational in the country in 2002 followed by the Central Regional Electricity Distributor (CENORED) in 2003 though it became operational in 2005. Erongo RED was also started in July 2005.