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PNG Power to spend K500m to boost ops
By BRIAN GOMEZ
in Cairns
PNG Power will spend K500 million of
internally generated funds for capital and operating expenditures over
the next five years, chief executive Patrick Mara said yesterday.
Speaking at the 23rd Australia-PNG business forum in Cairns, Mr Mara
said the Government-owned utility had also borrowed K330 million from
the commercial banks last year for three major development projects.
These were the 24 megawatt Rouna II hydro power project costing K120
million that will be completed by March 2009, the 18MW Yonki project to
be completed next year and the 240MW Ramu II power station.
Mr Mara said the Ramu II project, which will be completed in 2010, was
almost equivalent to the total generating capacity in PNG and was needed
because of demands from the mining sector, including the Ramu nickel
mine.
Earlier, the newly-appointed chairman of the Independent Public Business
Corporation, Sumasy Singin, told the conference that State-owned
enterprises (SOEs) had seen a steady improvement in their performances.
The National Executive Council meeting in Wewak last week had given IPBC
a mandate to be more pro-active with the SOEs and to ensure a better
operating performance.
These changes would ensure that the IPBC uses its asset base and
knowledge to become “an engine for growth” in the PNG economy.
In his speech, Mr Mara said the K65 million given to PNG Power in last
year’s supplementary budget would be used to extend power supplies over
700km in projects in various provinces.
These funds would be supplemented by K30 million from the provinces.
Mr Mara said the power company had about 80,000 consumers and services
about 7% to 8% of the population and needed to provide power to more
people.
The national power system was made up of 19 independent grids that were
not linked to each other and Kokopo, in particular, should be attractive
to business because it now has 18MW of installed capacity compared with
a peak load requirement of 7.7MW.
Significant excess capacity is also available in Kimbe and Wewak.
Mr Mara said reliability of supply had reached 98.4% in January and
February this year but this was “not great” compared with reliability in
excess of 99% in Australia.
This meant that for 150 hours every year, PNG Power was not able to
supply power to customers, who get upset and also results in loss of
revenue to the utility. The reliability factor has improved from 90% in
1998 and 94% in 2002.
Mr Mara noted that there were many complaints about the high cost of
power and said that while supply in Australia may be priced at three to
five cents per kilowatt hour, it was around 14 cents in PNG. However,
PNG prices were in the lower quartile among developing countries, he
said.
Other expansion and improvements to be undertaken by PNG Power included
improvement of the transmission system and building of a SCADA
electronic backbone to improve maintenance of the network.
 
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