PNG Power needs long-term solutions

PNG Power Ltd (PPL), just like any other State-Owned Enterprise, is in a dire need of financial and institutional reforms.
The deteriorating grid, transmission and capacity infrastructure of PPL will not be resolved, by simply pumping more and more money into it.
The structural environment under which PPL operates at present must be fully reformed, to resolve the aging grid, transmission and capacity issues the company is facing at present.
This involves the abolition of the Department of Public Enterprise and Investments, and all of its enabling legislations.
A new legislation which removes Government ownership and control through a significant dilution in the equity capital of the Government required.
The legislation must set out good management and governance, and fit-and-proper test and accountability requirements for senior management and board.
This structural change will enable the reformed entity to operate on purely commercial objectives.
It will become the foundation for the entity to manage its operations and fix asset infrastructure in a sustainable manner. It will no longer require external support or intervention by the Government.
The proposed K1.07 billion bailout of PPL by the Asian Development Bank, as reported in the newspaper, will not sustain the operations of PPL in the long-run.

Concerned Economist