Linda Ensor
3 September 2009
Cape Town — The restructuring of the electricity-distribution industry through the creation of six regional electricity distributors (REDS) countrywide was ready to proceed as soon as the contentious 17th Constitutional Amendment Bill was promulgated, Electricity Distribution Industry Holdings CEO Phindile Nzimande said yesterday.
More and more municipalities had signed agreements to participate in the system and prepare their reticulation assets for transfer to REDS, even those initially opposed to the idea. So far, 147 of the 187 municipalities had signed the memorandums of understanding, Nzimande told Parliament's energy committee.
Also, the Department of Energy had prepared a REDS Establishment Bill on the assumption that the amendment was adopted.
Committee members stressed the urgency of getting the bill adopted despite stiff opposition resistance on the grounds that it would erode local government's powers and functions.
The measure will enable the government to force councils to participate in REDS, which are aimed at harmonising and simplifying the fragmented, inefficient system of electricity distribution. Refusal of some councils to participate because of the threatened loss of electricity revenue stalled restructuring for years.
On the other hand, a departmental official warned that the practical implementation of the new system should wait until after the 2010 Soccer World Cup because human resources in the energy sector were stretched to the limit, and there should not be a split in focus.
The government also wanted to avoid any disruption.
Nzimande said that, although progress had been made, tough negotiations with Eskom and municipalities lay ahead over compensation for the assets transferred.
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