High Court dismisses SELCo application to withdraw termination

23 Feb 2014 10:40am
KEETMANSHOOP, 21 FEB (NAMPA) – The High Court of Namibia earlier this month dismissed an urgent application by the Southern Electricity Company (SELCo) for the Keetmanshoop Municipality to withdraw the termination of their electricity management contract.
The two parties concluded an agreement on 23 August 2001 for SELCo to supply the town of Keetmanshoop with electricity for a period of 15 years from 01 September 2001.
The Keetmanshoop Municipality, however, terminated that contract on 30 August 2005, citing SELCo’s violation of that contract for failing to continue availing a loan of N.dollars 32 500 per month towards the municipality to settle its external debts of N.dollars 1.2 million.
Keetmanshoop Mayor Moses Titus informed Nampa on Friday SELCo withheld the royalty payments after council refused to agree to annual tariff increases in 2004 and 2005.
So far, SELCo has availed N.dollars 1 170 000 to the municipality as part of the loan agreement.
The urgent application by SELCo was launched in 2005, and has been pending since.
SELCo, however, continued supplying electricity while waiting for judgment on its urgent application.
Meanwhile, the judgment delivered on 07 February 2014 by High Court Judge Kato van Niekerk reads “the application is dismissed with costs, such costs to include the costs of two instructed counsel”.
The amount of legal costs to be paid by SELCo on this matter is still to be determined.
The judgment also indicates that the application was refused because the contract entered into by the two parties is illegal and unenforceable, as it was allegedly concluded without the approval from the Ministry of Regional Local Government, Housing and Rural Development (MRLGHRD).
Also contacted for comment, Acting Chief Executive Officer of the Keetmanshoop Municipality, Quinton Visagie said the town council is busy discussing the way forward with the electricity supply company.
In November 2012, Titus announced at a community meeting that SELCo and the town council have agreed to end the contract in February 2016, and that both partners have no interest or intention to renew it.
Titus said one of the main reasons why council made that decision was the fact that since the signing of the agreement in 2001, the two parties and the community of this southern town have had numerous disagreements about increasing electricity tariffs.
He further stated that council is preparing itself to seek another electricity supplier, or establish another way in which to supply electricity to the town from 2016 onwards.
On Friday, Titus said this agreement is still valid, but might be affected by the outcome of a meeting to be held between the parties soon.