In his zeal to ensure prudent financial management, Mines and Energy Minister, Obeth Kandjoze, has ordered a thorough financial investigation into the financial books of Okahandja. Effective financial management by local authorities continues to give Government sleepless nights with many often knocking on Government’s doors for bailouts to pay their NamPower debts, a situation that clearly does not sit well with Kandjoze. “The Ministry of Mines and Energy requests that a thorough financial investigation be conducted for the financial books of Okahandja to determine the reasons for the council’s inability to honour electricity bulk supply payments,” directed Kandjoze on Wednesday at a public signing of the Cenored-Okahandja joint venture (JV) agreement.
Kandjoze said the report on the financial investigation findings should be submitted to the Ministry of Mines and Energy within three months of the operational of the joint venture. “In principle, the Ministry of Mines and Energy is in support and approves the JV between Okahandja and Cenored on condition that the concerns that are highlighted above and documented to the parties of the joint venture are addressed,” he said. “The Ministry of Mines and Energy is highly concerned with the inability of Okahandja Town Council and some local authorities to manage and operate their electricity supply undertakings efficiently,” said a concerned Kandjoze.
He added: “On a number of occasions we have been informed that certain local authorities are unable to honour their payment obligations, especially in respect of their NamPower bills – which is the bulk electricity supplier.” Kandjoze revealed that his ministry and the Ministry of Urban and Rural Development are constantly being called upon to bail out local authorities due to lack of funds to honour their NamPower payment obligations. “The Ministry of Mines and Energy is highly concerned as to what happens to those funds collected by the local authorities from the customers, for services rendered such as for electricity sales,” he said.
Kandjoze said that it is not only the payment of NamPower accounts that is a concern, but the total upkeep and the sustainability of the electricity infrastructure to effectively supply electricity to the residents by the local authority is worrisome. “The Ministry of Mines and Energy cannot continue bailing out local authorities for their inability to properly manage funds or through the misappropriation of funds that are meant to cover electricity costs,” he lamented as he urged local authorities to manage their financial affairs properly.
He further reiterated that achieving infrastructure development and poverty eradication goals cannot be achieved without reliable electricity supply. At the discussions held between Ministry of Mines and Energy, Electricity Control Board (ECB), Cenored and Okahandja Town Council, regarding the joint venture, among others, the following were highlighted.
The joint venture is an interim arrangement until such time that the Regional Electricity Distributor (RED) in the area including Okahandja is created. In determining the electricity tariffs for Okahandja the regulator, ECB, would scrutinise the cost components to be incurred by the joint venture, and only prudent costs will be allowed. Kandjoze hailed the signing saying: “This event is historic as it will mark the first time in Namibia that a municipality and an existing RED form a mutually beneficial joint venture to supply and distribute electricity to the community.”
With many local authorities that fall outside the RED’s framework facing several challenges related to finance, technical and management, Kandjoze is of the view that such arrangements can serve as a viable model for the future development of the Namibian electricity supply industry.
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