‘Termination did not affect services’

National, Normal
Source:

The National, Wednesday 24th April 2013

 EDA Ranu says the management of water and sewerage operations in Port Moresby has not been affected by the decision to prematurely terminate its 22-year concession/build operate and transfer (BOT) agreement with Malaysian consortium PNG Water Ltd (JC-KRTA).

Chief executive officer Henry Mokono confirmed on Monday that the contract was terminated by the Eda Ranu board last month.

Mokono, however, said he could not elaborate further as a comprehensive report on the matter was being put together for Prime Minister Peter O’Neill, Minister for State Enterprises and Public Investments Ben Micah, and the Independent Public Business Corporation (IPBC) as the shareholder.

The March 21, 2013 notice was for the termination of the concession agreement, consultancy agreement and all other related agreements, contract amendments and engagements between Eda Ranu and PNG Water with immediate effect.

Malaysian company Brem Holding, which holds a 51% stake in PNG Water, said last month the termination was initiated unilaterally by Eda Ranu and “the board is of the opinion that such unilateral early termination is unfair and may not be justified, and they shall engage lawyers for advice on the matter”.

PNG Water signed a concession agreement with NCD Water and Sewerage Pty Ltd on June 23, 1997, for a water concession business in Port Moresby for a 22-year concession period. Pursuant to the terms of the agreement, the concession period will expire on June 22, 2019.

Eda Ranu is the trading name for NCD Water, a state-owned entity owned by the government.

“Our board of directors has made a decision to terminate the concession/BOT agreement on some valid grounds last month, and that a management review team was mobilised with some external legal and technical consultants to carry out an investigation and prepare a report on the decision and its implications,” Mokono told The National yesterday.

“The team has compiled a comprehensive report for the Prime Minister, our Minister for State Enterprises and Public Investments, Hon Ben Micah, and the IPBC as the shareholder.

“Until the PM and the Minister reach the reports and sanction them, we shall not release any media statements on these issues due not only to its sensitivity, but other implications. 

“However, for your information and records, please know that the transitions and changes to the management of the water and sewerage operations to the city residents have not been impacted in any way since those changes were made. 

“Unless there were any major problems being experienced since that termination was made, I am confident that the company has been operating as normal as possible under a fully-fledged and 100% PNG nationals, who have been the brains behind this public utility company.”

Meanwhile, Port Moresby Chamber of Commerce and Industry (POMCCI) has expressed concern at the premature termination of the contract between Eda Ranu and PNG Water Ltd (JC-KRTA).

“We have not been officially advised on the matter but assume it has been done amicably, with mutual consent by both parties and that there will be no legal ramifications,” POMCCI chief executive officer David Conn said on Monday.

“Our main concern would be regarding ongoing and efficient water and sanitation supply in the city and whether the necessary upgrades on infrastructure required of a BOT have been done.

“I am trying to meet with the new (Eda Ranu) CEO (Henry Mokono) to get a briefing on the new status.”