Concern over outstanding bills

PAYMENT of arrears by PNG Power Ltd (PPL) to Independent Power Producers (IPPs) still remains a big concern for the industry, an official says.
IP3 (PNG IPP industry group) chairman and president David Burbidge said this following a PNG electricity stakeholder meeting in Port Moresby recently.
“It remains of concern that PNG Power still has significant arrears in payments to IPPs,” he said.
“Previously, this issue was raised and some funding was forthcoming albeit well below what is required.
“It is unfair to expect IPPs to have to bear the burden of supplying power to the national grids and not get paid.
“The IPPs urge Government to settle these arears promptly.”
In attendance were the National Electricity Authority (NEA) chairman Joseph Gabut and staff.
The NEA is the new regulator of PNG’s electricity sector.
Also in attendance were executives from the Independent Power Producers (IPPs), Posco International, PNG Forest Products Hydro, AG Energy, Dirio Gas and Power and NiuPower.
Burbidge said PNG Power declined an invitation to attend.
“We are encouraged by this first formal engagement with the NEA and look forward to a mutually successful partnership in the future,” he said.
Burbidge said the outstanding payments owed was huge.
“The number is in the hundreds of millions of Kina, pretty significant,” he said.
“Just one IPP alone is owed K190 million.
“Private sector investment is crucial on the back of the electricity industry policy encouraging public private partnerships (PPP).
“Therefore, we need to create a regulatory environment which creates certainty, offers stability as well as encourages and protects private investment in the electricity sector.”
Burbidge said the IPPs expressed concern that development sector investment was burdening taxpayers in PNG with funding that was not targeting the right areas on the respective grids in order to maximise the efficiency of supply and profitability of PNG Power.
As key stakeholders, IP3 members have called for engagement by the development sector to help shape the investment strategy on the Port Moresby and Ramu grids.
He said the IP3 also voiced their concerns on the ambiguity of the new NEA Act and requested clarity on the implementation date, imposition of levies, licence fees and national content in relation to saved licenses with existing operators.
PPL chairman Moses Maladina said in March that PPL had established payment terms to meet outstanding amounts totalling K250 million to all IPPs.
Attempts to get comments from NEA and PPL were unsuccessful by the time this paper went to print.