Powes Parkop is right: privatize PNG Power

City-wide blackout in Port Moresby: PNG Loop

For three consecutive weeks, electricity in Papua New Guinea’s capital went off in the evenings. But this is not unusual for Port Moresby, a city dubbed “one of the least livable cities in the world” by The Economist Unit’s Global Livability Report 2021 in this week.

Powes Parkop, the National Capital District Governor, where Port Moresby City is located, criticized the report as “harsh”. Parkop subsequently wrote a letter to the PNG Minister for State Owned Enterprises to sell PNG Power for the state to sell PNG Power, which provides electricity in most parts of PNG, including Port Moresby. Below is Powes Parkop’s letter.

“SELL PNG POWER – PNG Power is the problem! Not the solution.”

Dear Minister,

PROVISION OF RELIABLE AND AFFORDABLE ELECTRICITY IN PORT MORESBY

I write regarding the above to express, on behalf of the entire community in the City, our deepest concerns and frustration at the continuous power outage and inability of PNG Power to provide reliable and affordable electricity supply. This is a continuous problem, but far from getting better, it seems to be getting worse despite all the initiatives of PNG Power itself and the Government generally.

In the City now, corporate entities are forced to buy back-up generators and become electricians or engage electricians on a full time basis. This not only cuts into their cost and makes the cost of doing business in Port Moresby higher, but also diverts them away from their core business. Instead of focusing on wholesale and retail trading, for example, wholesale and retail companies in the City have to divert their attention to providing electricity to their corporate premises and also homes of their staffs, particularly their Executive Management.

Equally, the individual residents of the City have to not only suffer from unreliable electricity and continuous outage but also the cost passed on by business houses for having to provide their own electricity. Ordinary residents of the City are therefore being hit two or three times over as a result of this situation.

It is my understanding that as a result of the recent commission of new power suppliers, including NiuPower at the LNG Site, there is more than enough electricity for the City. The private power supply from Edevu near Brown River in Central Province, when it commenced operation, gives us absolutely more than enough electricity we need for the City and an economy our size. The problem, therefore, is not one of lack of adequate electricity supply but one of inability to deliver electricity reliably and at affordable level.

Past Governments and Ministers have done their part to help PNG Power to transform itself so it can deliver better, but all these efforts seems to be in vain. It is about time, therefore Minister, that we accept what is obvious and deal with the problem so we can have solutions. In my earnest view the problem is PNG Power Ltd itself. The way it is structured, managed and capitalised simply cannot enable PNG Power Ltd to be a solution. The sooner we, especially you Minister, recognise and deal with this fact, the better it will be. Even if it is an infrastructure problem, PNG Power Ltd is not made out to solve this problem. PNG Power itself is the problem.

I write, therefore, to propose to you and by you, to the Cabinet that we immediately do an inventory and valuation of all PNG Power asset in the City and Central Province and we strip or remove these assets from PNG Power Ltd and sell these assets to a corporate company that can change the dynamics better and completely. Be it a US, Japanese, German, Russian or Singaporean Company, the people of NCD, both corporate and individuals, deserve a better service provider of this critical essential services. Independent State of PNG can continue to have equity in such a Company but as minor shareholders. This has to be and seems to be the only way forward given that PNG Power Ltd does not have the financial capacity to upgrade its infrastructure. The way it is structured and managed too will not give confidence to Banks or financial institutions to offer credit to PNG Power Ltd to recapitalise and rebuild its dilapidating infrastructures. We need to bite the bullet so we change the dynamics completely now. You have the power and privilege to make a difference now and I encourage you to make such bold decisions.

I look forward to sitting with you to explore this and other options your team and KCHL might have but we cannot procrastinate or delay any further.

As this is a matter expressed strongly to me recently, by both corporates and individual residents of our City, I will release copy of this letter publicly to media so the public can follow and contribute to solutions.

Thank you

HON. POWES PARKOP LLB LLM MP
Governor….”

Published by Academia Nomad

Blogs on politics, economics and social issues in simple language.

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