20 October 2008 – The Association for Local Authorities in Namibia (ALAN) wants Government to do away with Regional Electricity Distributors (REDs), which, ALAN says, deny local authorities a source of income.
"If there is one thing on which there is great degree of consensus in local councils from both the elected officials and appointed administrative staff, it is on the issue of REDs," ALAN’s Chief Executive Officer, Jennifer Kauapirura, said in a statement.
According to ALAN, this view is also fully supported by the Namibia Association of Local Authority Officers (NALAO), representing officials in local authorities. ALAN said it increasingly finds it difficult to defend a system that has led to increased costs and higher tariffs for consumers and continues to add an additional burden to the most vulnerable in communities already hard hit by increases in the cost of living.
"Our considered view is that the continuation of the REDS will and has taken away a key source of generating revenue for local authorities without reciprocating it with reasonable returns on investment to the local authorities. Hence, local authorities are worse off financially after the introduction of the REDs, as local authorities earn less than when electricity distribution was their responsibility," ALAN said.
REDs are regarded as very costly to consumers with additional taxation, higher personnel costs, board member fees and duplication of existing services. From a management and business perspective, the experience of the REDs in the regions where it has been implemented so far is one of failed delivery on the promise of greater efficiency and higher revenues for local authorities, ALAN said.
ALAN is of the view that the stakeholders in the electricity and local authority sector do a candid stocktaking of the merits of the RED system and thus calls for an electricity summit planned initially for this year but postponed to next year.