Power woes driving up costs

THE PNG Property Developers Association is concerned about power supply problems around the country which are adding to the cost of business.
Association chairman Peter Aitsi said because state-owned electricity producer PNG Power limited could not provide reliable power, many businesses were relying on generators.
“This is resulting in higher costs to business due to increased fuel use and running costs,” Aitsi said.
“A number of businesses have experienced generator failure due to having to run generators over extended periods, plus the affect of irregular voltage coming through transmission lines.
“All of these issues are causing significant problems for businesses in PNG.”
He said business groups based investment decisions on factors such as reliable utilities (power and water) and enabling public infrastructure (roads) as a precursor to property development.
“While we acknowledge that the problems with PNG Power may be a result of many years of mismanagement, poor execution and a lack of proper capital investment, and while we acknowledge the efforts that have been made to date, the reality is that the problems remain,” he said.
“Given the reliance on power, the business community is calling on Government to take immediate action. We do not want a major system failure.”
He said an important area to consider was the privatisation of power generation and supply.
“The PNG economy is struggling and is stagnant. The aftermath of Jan 10 (civil unrest) and ensuing disruptions and impacts to business are still being felt,” Aitsi said.
“Given the delays to our major resource projects, Government needs to turn its focus to supporting industries and businesses to continue to operate.”
He said Government initiatives to reduce business costs, such as improving power supply “will assist greatly”.
“As a background to what is at risk, the PNG property sector is a major contributor to the country’s gross domestic product (GDP), the Investment Promotion Authority (IPA) data list real estate and construction as the number-one driver of business investment in the economy with K1.1 billion expended over the period 2019 to 2022,” Aitsi said.