Govt should pay what it owes to PNG Power Ltd

APART from issues highlighted by the Independent Consumer and Competition Commission that affects PNG Power Ltd’s (PPL) performance and the reliability of the power supply around the country, there are other comments from well-known people that need a response from technical minded people in Papua New Guinea, either within the organisation (PPL) or outside of it.
On the issue of non-payment of electricity bills by the Government, which owes PPL significant outstanding amounts that impact PPL’s financial ability to effectively sustain its operations and meet financial obligations, my response is the owner of a company and the company are totally two different entities and there should be respect for one another.
Accordingly, Government being the owner on behalf of the citizens of PNG, has a responsibility to provide electricity services and should forthwith pay its outstanding electricity bills estimated to be more than K400 million.
There are no options left for the Government.
It has to pay its arrears as sign of respect and for the use of services in our commercial entity.
Money is the common denominator for all activities in any economy, whether great or small.
The reliability of power supply hinges on the funds available to improve on power supply reliability whether operational or product – capability projects.
The money owed to PPL rightfully belongs to PPL for the provision of the electricity services to its connected consumer base.
No minister or MP has any authority to exempt the Government from payment of money owed to PPL or direct it to reconnect power supply after being disconnected for non-payment of electricity bills and in line with normal protocols for collecting what is due to PPL.
Political interference in PPL has been there even after it was corporatised in early 2000.
PPL has historically been subjected to a lot of political pressure that has affected the viability of its business.
There have been unsolicited proposals forced on to PPL through political means.
These deals have tied PPL to unsustainable long-term financial commitments.
PPL is burdened with astronomical debt.
PPL was a vertically integrated power supply company having monopoly in all core business functions of generation, transmission, distribution and revenue collection regime.
The initial reason is that the Government have to have monopoly in electricity supply industry was threefold.
Firstly, its initial capital cost of investment in power supply industry was too high given the size and topography of the country.
Secondly, it was more strategically because of the company’s important contribution in social and economic development of Papua New Guinea and the power supply industry was more critical if the country was under an attack internally or externally.
Thirdly, because of our social and cultural norms and settings in regard with land ownership and compensation demands, the Government has to meet power supply product-capability projects.
Corporatisation of PPL in the early 2000s would have meant one step removed from the Government’s direct control on some of the day to day critical functions of PPL.
I guess some of the unsolicited projects has to do with other power supply companies involving themselves into the core business functions of generation without very much taught and critically analysing the costs of privatisation of electricity industry, resulting in a very unstable economic model of the current power supply industry.
It is not helping to solve the reliability problems of power supply in the country.
PPL has 4000km of transmission and distribution networks together with billions of kina investments in core business functions as well as the support logistical infrastructure.
What will happen under a privatisation programme?
When the country is under a state emergency, how will the independent power producers handle the strategic power supply states of the affairs?
I cannot see the benefits of two 20mw diesel generators imported from Israel.
This is one of the unsolicited projects that has cost the people of Papua New Guinea a substantial amount.
Yet we make so much noise as if we have nothing to do with reliability of power supply woes in the country.

Esau D Noel,
Former PPL Employee