ORGANISED LOCAL GOVERNMENT POSITION ON THE RESTRUCTURING OF THE ELECTRICITY DISTRIBUTION INDUSTRY (EDI)

 

The restructuring of the electricity distribution industry has been on the national agenda since the early nineties and SALGA is on record as being in support of this initiative to establish six wall-to-wall Regional Electricity Distributors (RED’s). This initiative must be seen as a mechanism to reduce and ultimately end the fragmentation that leads to inefficiencies in the industry, as it currently exists. The restructuring will also assist in addressing the network maintenance backlog and promote equal treatment of consumers countrywide through a national electricity pricing system.

SALGA is further on record encouraging municipalities to sign accession agreements indicating their willingness to participate in the process of EDI restructuring. In fact, to date more than 150 municipalities have signed these accession agreements and our own assessment of municipal participation in the restructuring process indicates that there has been general acceptance of the process. However, a number of concerns have been raised with regard to:

• Shareholding in the REDs;
• Governance arrangements of the REDs;
• Transfer of electricity undertakings;
• Compensation for electricity undertakings;
• Service delivery agreements;
• Articles of association of REDs;
• Ownership of Key Industrial Customers; and
• Municipal Revenue.

After prolonged debate on the approaches to be adopted to restructuring and the legislation to support the creation of Regional Electricity Distributors (REDs) as public entities, consensus was beginning to emerge from within government that it would be impossible to restructure the EDI without some form of constitutional amendment. The emerging consensus was that such an amendment to the Constitution should precede the development of the relevant legislation. SALGA participated in the process because it is constitutionally mandated to represent the interests of local government in national policy and legislative processes.

Throughout this process SALGA has consistently argued against any constitutional amendment that seeks to remove the electricity reticulation function from local government. However, local government is very mindful and supports the overall objectives of the EDI restructuring and the benefits thereof. Through the participation of SALGA, the following protection mechanisms have been built into the proposed constitutional amendment:

• National restructuring legislation can only be introduced when there is proof that efficiencies and economies of scale are undermined by municipal boundaries
• National legislation must maintain the fiscal and institutional sustainability of local government by protecting municipal revenue
• Organized local government and the Financial and Fiscal Commission must be consulted before legislation is passed.

SALGA has further insisted that various other interventions including the outstanding policy concerns (municipal revenue, shareholding, etc), the EDI restructuring enabling legislation and necessary regulations must be processed through Parliament in tandem with the proposed constitutional amendment so that there is “one package” before Parliament and other stakeholders.

Now that Cabinet has approved the Constitutional Seventeenth Amendment Bill, which is intended to provide national government with powers to intervene at local government level to facilitate service delivery and achieve regional efficiencies and economies of scale at local government level, SALGA will, in line with its Mandating Framework, embark on a consultation drive with all municipalities in order to develop a fully mandated position in respect of the proposed constitutional amendment.  

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SALGA NMA 2009: Invitation for Exhibitors and Sponsors

Local government leadership converge in East London

The National Members Assembly (NMA), the most senior decision making body in Organised Local Government after the National Conference will, convene in East London, Premier Regent Hotel  from 10 to 11 June 2009.

Given the fact that the NMA will be held soon after the April 22 Elections, it is envisaged that local government will be obliged to reposition itself to effectively implement the wider policies and programmes of Government at large in accordance with the mandate entrusted by the electorate.

The 2009 edition of the NMA will indeed be a watershed event whose structure and content will, amongst other imperatives, be determined by national priorities, especially in the area of municipal service delivery.

Approximately 1000 delegates, ranging from Mayors, Speakers, Councillors, municipal officials, MEC’s, Cabiet Ministers, and the future President of our Republic, are expected to attend the event.

An opportunity exists for exhibitors to profile their companies and showcase their products to a large number of local government decision makers. In addition a sponsorship opportunity exists.  

In view of the limited space, all interested parties are urged to indicate their intention to participate at this prestigious event as soon as possible.

Applications will close on 20 May 2009 and will be treated on a ”first come first served basis”.

 For further Enquiries Emelda Pheko or Puleng Maluleka epheko@salga.org.za or pmaluleka@salga.org.za Tel: 012 369 8107/8057 Fax: 012 369 8001