State owes PNG Power nearly K200 Million

Outgoing Minister responsible for PNG Power, William Duma, says unpaid electricity bills by government agencies are one of the biggest reasons the state-owned power company continues to face financial difficulties.

Speaking during the handover of PNG Power responsibilities to the new minister, Richard Maru on Monday, Mr Duma said government departments, hospitals, schools, police stations and other state agencies owe PNG Power almost K200 million.

"Our state agencies owe this company nearly K200 million," Mr Duma said.

"When your single biggest customer does not pay its bills, how do you expect the company to make a profit, pay dividends or improve its ageing infrastructure?" he asked.

Mr Duma said PNG Power has continued to struggle financially despite efforts by the government and the company's management to improve its performance.

He said the company also faces high costs from long-term agreements with independent power producers, where PNG Power must continue paying for electricity under existing contracts.

"As long as these agreements remain in force, PNG Power will never be able to make a profit unless something changes," he said.

Despite these challenges, Mr Duma said PNG Power is beginning to recover under the leadership of Chief Executive Officer Paul Bailey.

He said the company recorded a small profit of K1.7 million last year after more than two decades of losses.

"That is a good turnaround. It is a sign of better things to come," Mr Duma said.

He said the government will continue with reforms aimed at improving PNG Power's financial position and delivering reliable and affordable electricity to Papua New Guineans.