ECB opposes power cuts
Blames NamPower for failure to enforce credit policy
The ECB has warned of the economic consequences of power cuts, including on the health sector.
The Electricity Control Board of Namibia (ECB) says it will oppose any power cuts NamPower plans to roll out in future, saying such actions have negative economic outcomes.
This comes on the heels of a directive by Cabinet to stop NamPower from rolling out power cuts to creditors.
NamPower is currently owed over N$1 billion and has, since 5 June, cut off power periodically to various local authorities and the Northern Regional Electricity Distributor (Nored) in an attempt to address debts.
Consider the consequences
The ECB however warned of the economic consequences such action will have.
"Interruptions negatively impact economic activity and may even increase the inability of customers to pay bills as a result. The ECB shares the plight of those customers who are in good standing or who are on pre-payment and who were unfairly affected by the measures taken by NamPower," it said.
"In future, any debt-recovery plan by any licensee that compromises lifesaving services and causes interruption to customers in good standing will not be supported by the ECB," the ECB added.
The intended power cuts increase the risk of impeding service delivery, especially in the health sector, the regulator said.
"The ECB notes with concern that interruptions pursuant to the implementation of NamPower's debt collection plan have caused immeasurable damage to the economy, interrupt critical and lifesaving services such as medical services, and caused hardship to electricity consumers," the ECB said.
Failure to plan
The ECB blamed NamPower for its failure to enforce its own credit policy.
"The current problem faced by NamPower originates from two sources, namely NamPower's reluctance or failure to strictly implement its own credit control policy, and secondly, as a result of distribution licensees failing to fully settle their NamPower invoices on time, which happened over a long period of time," it said.
NamPower’s failure to manage its credit placed pressure on its ability to secure electricity supply, the ECB said.
"This poses a risk to security of supply in Namibia, as NamPower may find itself in a position that it is not able to buy or generate sufficient electricity to meet the electricity needs of the country. The benefits that NamPower enjoys through NamPower's credit rating should not be underestimated," the ECB said.
Concerns voiced
Board members at the parastatal expressed concern over Cabinet’s meddling in the affairs of NamPower.
"Everyone knows that failure to collect money due to NamPower would have unintended consequences. Is that what government wants?
"The board was simply trying to do what is in the best interest of the corporation to avoid incidents such as Air Namibia, where NamPower finds itself in a position where it is unable to continue with operations," one of the board members said.
Another asked: "Has Cabinet considered that if the outstanding debts are not settled, NamPower risks facing the challenges neighbouring countries Zimbabwe and South Africa are currently experiencing?"
This comes on the heels of a directive by Cabinet to stop NamPower from rolling out power cuts to creditors.
NamPower is currently owed over N$1 billion and has, since 5 June, cut off power periodically to various local authorities and the Northern Regional Electricity Distributor (Nored) in an attempt to address debts.
Consider the consequences
The ECB however warned of the economic consequences such action will have.
"Interruptions negatively impact economic activity and may even increase the inability of customers to pay bills as a result. The ECB shares the plight of those customers who are in good standing or who are on pre-payment and who were unfairly affected by the measures taken by NamPower," it said.
"In future, any debt-recovery plan by any licensee that compromises lifesaving services and causes interruption to customers in good standing will not be supported by the ECB," the ECB added.
The intended power cuts increase the risk of impeding service delivery, especially in the health sector, the regulator said.
"The ECB notes with concern that interruptions pursuant to the implementation of NamPower's debt collection plan have caused immeasurable damage to the economy, interrupt critical and lifesaving services such as medical services, and caused hardship to electricity consumers," the ECB said.
Failure to plan
The ECB blamed NamPower for its failure to enforce its own credit policy.
"The current problem faced by NamPower originates from two sources, namely NamPower's reluctance or failure to strictly implement its own credit control policy, and secondly, as a result of distribution licensees failing to fully settle their NamPower invoices on time, which happened over a long period of time," it said.
NamPower’s failure to manage its credit placed pressure on its ability to secure electricity supply, the ECB said.
"This poses a risk to security of supply in Namibia, as NamPower may find itself in a position that it is not able to buy or generate sufficient electricity to meet the electricity needs of the country. The benefits that NamPower enjoys through NamPower's credit rating should not be underestimated," the ECB said.
Concerns voiced
Board members at the parastatal expressed concern over Cabinet’s meddling in the affairs of NamPower.
"Everyone knows that failure to collect money due to NamPower would have unintended consequences. Is that what government wants?
"The board was simply trying to do what is in the best interest of the corporation to avoid incidents such as Air Namibia, where NamPower finds itself in a position where it is unable to continue with operations," one of the board members said.
Another asked: "Has Cabinet considered that if the outstanding debts are not settled, NamPower risks facing the challenges neighbouring countries Zimbabwe and South Africa are currently experiencing?"
Comments
Namibian Sun
No comments have been left on this article