By: Josef Kefas Sheehama
The Mines and Energy minister Tom Alweendo granted Ongos Valley the right to operate an electricity distribution company in its housing development. The Local Municipality is planning to challenge the decision because it felt that the ministry had not followed all the necessary processes before granting Ongos Valley the right to operate.
Furthermore, the municipality asserted that the approval will have financial implications on the side of the Council and will also set bad precedence as the Council has previously received similar requests from housing developments to operate and maintain their electricity infrastructures, which were denied. The Ongos Valley Development wants to establish an Ongos Valley Development Electricity Distribution Company, which will own the electrical assets and operate the electricity distribution business within the township. Ongos Valley is a mixed-use township located 14 kilometres from the city centre, which is targeting to build 28,000 housing units in 20 years. Hence, the path to lower costs requires allowing new companies to form rather than fighting those new incorporations. What this means for the City of Windhoek is that we should welcome the incorporation of Ongos and any other area where residents wish to establish their own distribution companies. It would increase consumer choice and force existing local authorities to provide better service at a lower cost, a win-win scenario for everyone.
We applaud the Hon. Tom Alweendo for this positive development due to possible good economic policies pursued by the Namibia Government. The Honourable Tom Alweendo recently revealed that the government is looking to cancel the Namcor levy by taking steps to remove the fuel levy and, in turn, create a broader range of discounted offerings at the pumps. Few people let go of an opportunity to criticize the government on various issues. However, it is also important to thank the government for its relentless efforts to take the country forward. Whatever decisions are taken for the nation’s welfare are made by the government. The national interest requires everyone to support. We must not play politics with development. Let’s have respectful debates about what is best for our communities. Let us put aside our political differences and work together to continue building Namibia.
Moreover, the City of Windhoek cannot decide for us. Monopoly is not helpful for the social and economic development of a country. The monopoly concentration of economic power, profiteering and growth of unfair trade practices such as hoarding, amongst other things. The municipality must be managed like a business if they are to succeed. Any company that wants to know how its revenue is generated and how it is made up must have a revenue model in place. Understanding how this money is produced and the crucial levers of the revenue value chain must be carefully handled is vital. Like any organization, knowing your product lines and how well they sell is essential to carrying out your sales strategy and generating the necessary revenue. To adopt the required legislative and institutional changes and boost revenue, they should also garner support from urban residents. We cannot allow the City of Windhoek to create entry barriers, try to eliminate competitors and prevent the entry of Ongos. We cannot allow our interests to be significantly affected because of the growth of monopoly. We need to have a choice.
For much the same reason, competition leads to better governance. People can compare local authority services and new entities when choosing where to live. The competition will prevent local authorities from exerting substantial monopoly power over residents—greater market competition matters for greater innovation, productivity, and economic growth. Market competition is based on the principle that businesses with the most efficient production and value for consumers should prevail. When businesses compete, consumers get the best possible prices, quantity, and quality of goods and services. The distribution competition has improved the power sector’s performance through enhanced efficiencies, reduction of losses, better customer service, and improved management. The enhanced competition in the electrical business is beneficial from the perspectives of both business and the environment. For consumers, increased competition means more decision-making power, choices, and lower costs with enhanced quality. More options for the consumer would lead to a more cost-adequate power supply through competitive tariffs and improved customer interface. The dedicated roles and responsibilities of Ongos would lead to enhanced power efficiency, quality, and price reduction. It shall shepherd customer satisfaction and simulate a competitive framework for delivering real value to consumers and other stakeholders. Nevertheless, there is a lot of scope for competition improvement in power distribution, and that change for brighter prospects is also clearly underway. The Mines and Energy ministry’s policies quickly adapt to evolving needs to ensure more retail competition with open entry and participation.
Therefore, the City of Windhoek and Ongos Valley should collaborate instead of taking the parties to court. There is a need for better management of inter-jurisdictional collaboration between the players. Namibia’s complex developmental problems cannot be solved with local municipalities operating in isolation. Public-private partnerships may also provide valuable opportunities. These could, for example, help improve the management, expansion, maintenance and operation of select revenue-generating service delivery components. The City of Windhoek should note that synergy makes business sense to manage specific jobs. Many may need technical support. These initiatives should be planned well and should not result from inadequate capacity or skills within the municipality. These considerations could contribute to better outcomes and improved service delivery.
To this end, the important developmental role that Ongos Valley Development Electricity Distribution can play in creating employment and stimulating economic growth suggests that these areas, in particular, should be prioritized.
The regulatory system should enhance rather than paralyze service delivery.
