Kavango Regional Council wants more shares from Nored

15 Jul 2015 16:10pm
RUNDU, 15 JUL (NAMPA) – The Kavango Regional Council has put the signing of a Service Delivery Agreement (SDA) between itself and the Northern Regional Electricity Distributor (Nored) on hold.
The regional council, which administers both the Kavango East and West regions, is the only regional council in which Nored also operates that did not sign the SDA which would allow the company to continue supplying electricity to the two regions.
Nored also operates in the Kunene, Omusati, Oshana, Ohangwena and Zambezi regions.
Representatives of all other regional councils and local authorities signed the SDA here on Monday. The agreement is aimed at ensuring that service managers and executives are held accountable during the execution of their tasks in line with Government expectations in terms of the sustainability of the Electricity Distribution Industry (EDI).
The SDA will not only support Nored in pursuing greater efficiency in the delivery of services but also define collaborative arrangements between the stakeholders in the complexity of the service relationship.
Currently, all regional councils get a combined 33 per cent share from Nored, but the Kavango Regional Council says it deserves more shares.
“They are saying this is a service agreement but apart from the service agreement there is a document included about shares. Our main concern is on what basis does Nored gives shares to us as shareholders?” the Chairperson of the Kavango Regional Council, Bonny Wakudumo said in an interview with Nampa after the signing ceremony.
Wakudumo said the regional council wants enough time to scrutinise the document and to understand whether the shares are allocated on the basis of how much the region contributes to Nored’s coffers.
He noted that these are just some of the issues the council wants to understand before signing the agreement, as according to him the two Kavango regions generate a lot of profit for Nored, thus the belief that the region should get more shares.
“We cannot just say because we are regions we should be treated equally. As you know, we have a lot of green scheme projects here and the utility is very high. In terms of revenue base, we are contributing a lot to Nored,” he said.
Wakudumo further stated that if the share distribution is based on assets, the two regions should get more shares in return, as they have more assets which they derive their revenue from.
Reading the statement of the Minister of Urban and Rural Development Sophia Shaningwa, Kavango East Governor Samuel Mbabo said shareholders invested N.dollars 15 million upon the inception of Nored in 2001 and they have now received an accumulated dividend of N.dollars 39 million.
In addition, N.dollars 91 million has been paid out as a surcharge combined to each town and regional council within Nored’s area of operation.
Meanwhile, Wakudumo said a meeting will be convened by the Office of the Governor with all stakeholders in the region such as the Rundu Town Council and the Kavango Regional Council to discuss the document in detail.
“After that meeting, if we are satisfied then we call Nored to collectively agree on the benefits for the region, thereafter we can sign the SDA,” he said.
Approached for comment, Nored Public Relations Officer Herman Ngasia said dividends have nothing to do with the SDA, as this agreement merely focuses on services required by the regional council. These services could for instance be erecting streetlights or electrifying certain areas.
Ngasia did, however, confirm that shareholding of regional councils and town councils is based on assets, adding that if the Kavango Regional Council is not satisfied with its shareholding the council has to take up the matter with Nored’s Board of Directors.