Yet another bailout (K100m) for PNG Power

News that matter in Papua New Guinea

Yet another bailout (K100m) for PNG Power

PORT MORESBY: The Papua New Guinea (PNG) Government has given another multi-million bailout to keep PNG Power going for the country.

State Enterprises Minister William Duma said the K100 million would be used to settle PNG Power’s debts to service providers and Independent Power Producers (IPPs).

Details of PNG Power’s power woes were reported by The National:

K100mil bailout for PNG Power

March 3, 2022The NationalMain Stories

By GYNNIE KERO
PNG Power Limited has management and legacy issues but is “not that broke”, says State Enterprises Minister William Duma, as Cabinet approves K100 million to assist the
electricity provider.
The money will be used to settle PNG Power’s debts to service providers and independent power producers.
“We (PNG Power) are not that broke. We are slowly coming around,” Duma said.
“Most of (the challenges it currently faces) is to do with legacy issues (and) management issues, (plus) the culture of incompetence, nepotism (and) corrupt practices.”
He said most of the problems “go back 20, 30 years”.
“I’m not trying to pass the buck. This problem has been existing. We have been trying to work hard to rectify the problem in a period of two to three years, given the constant change of governments and ministries,” he said.
Duma said PNG Power was “not technically insolvent”.
“It has good income-producing assets,” he said. “All it needs is a change in the way people have been conducting business in PNG Power and the way arrangements with IPPs (independent power producers) were put in place.”
He pointed out that PNG Power was making money. “Based on latest figures, it was making gross revenue of K785 million and expenditure was nearly about that figure,” he said.
“I had to tell the management that this is not a charity organisation. We (State) say we own our own company and yet we owe money.”
East Sepik Governor Allan Bird and Abau MP Sir Puka Temu questioned Duma in Parliament yesterday on PNG Power’s capability, considering how it was struggling to settle its debts while trying to sustain operations.
Bird noted that NiuPower was owed K200 million as reported.
He asked Duma about PPL’s arrangements with other IPPs and whether they were beneficial.
Sir Puka urged Duma to clarify whether another IPP, Dirio, was double charging PNG Power.
Duma said: “Dirio isn’t double charging PNG Power as far as I’m aware. The rates charged by Dirio are cheaper than others.”
“We are satisfied with the arrangements we have with NiuPower and Dirio because these IPP arrangements were a result of protected negotiated outcomes where we think it’s beneficial for PNG Power as well as those power producers,” he said.
Duma said the State owes PNG Power K65 million in debt and has been paying on a regular basis.

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