PNG Power is riddled with so much accumulative problems that have made it a “sick organisation”, but reforms are currently underway, Prime Minister Hon. James Marape says.
These include the installation of its full board, and a restructure of the company to separate power generation, transmission, and retail business.
In addition, the Government is also sourcing additional funding to recapitalize many State-Owned Enterprises including a $250million ADB facility, part of which should rescue the power company.
Prime Minister Marape said this as he explained PNG Power's situation in light of the continuous power outages Port Moresby has been facing lately. He was responding to the Member for Abau Sir Puka Temu in Parliament today.
Sir Puka brought to the attention of Parliament PNG Power concerns and asked for a response from the Prime Minister.
Areas he raised was the need for a board to manage the power authority, the need for an immediate audit of power infrastructure, a request for a provision of K70 million in the 2022 budget to cater for PNG Power, the loss of revenue up to K25million a month through power theft, and a call to connect power to Central province town, Kwikila, so power could be extended to his electorate of Abau.
On the issue of putting in place a board for PNG Power, PM Marape said two positions were still needing to be filled and the Government was looking into this, including the audit of PNG Power infrastructure.
The Prime Minister said the debts, outstanding arrears and contracts have accumulated so much over time that it has taken the Government well over K2 billion to clear the debts including a K105 million that was paid to PNG power for state bills that has accumulated over many years.
“These organisations (PNG Power, Water PNG, Telikom and Air Niugini) are operating at a loss. Almost half, if not 60-70 percent, of our users are not very good paying users,” said the Prime Minister.
“These are the inherent weaknesses that we have inherited and taken in. We have tried our best to clean the debts.
“We are giving support to these SOEs. Despite the weaknesses that they carry, they still remain focused in contributing to serve our country.”
PM Marape said in the last 3 years, NiuPower has come on board and with Dirio is supplying Central and NCD with up to 27 megawatt.
“There are teething issues as far as step up – the uplift of the power and feed into the grid. There is no connectivity to Moresby because the current connection from the existing generation site where Dirio and NiuPower are existing side by side can only uplift what is being generated by Exxon Mobil and NiuPower.
“The latest bout of blackouts are from the fact that NiuPower has had to switch off supply for non-payments of bills for the last four years. I have asked them to not switch power off again.”
But PM Marape gave the reassurance that the $250 million ADB program was coming soon for all State Owned Enterprises and “PNG Power will receive a substantial amount of allocation to make big intervention”.
He also gave the assurance that the SOE ministry would be making some big announcements in this area, including new boards and a new direction for the power body.
For the power connection to Kwikila, the Prime Minister said the Connect PNG program will carry through the Milne Bay-Central road link which will have on its back power connection facilities to also supply Abau electorate and those in the Central province.