By GEORGINA MICHAEL
MINISTER for International Trade and Investment and Minister responsible for PNG Power Limited (PPL), Hon. Richard Maru, has announced a three-step, six-month plan to rescue the company from financial collapse and deliver cheaper and more reliable electricity.
Speaking at a press conference on Friday, 14 August, Mr. Maru said PPL is insolvent, with more than K2 billion in liabilities, including K1.2 billion in debt owed to Independent Power Producers and other creditors.
“We can rescue PNG Power and turn the business around and prepare it for partial sale, which I want to see concluded by February,” Mr. Maru said.
“In other words, we want to bring private investors in to invest in PNG Power and own the biggest share of the business.”
The Minister outlined the three-step plan to reform and transform the electricity sector over the next six months.
“First, we want to work with the Government to pay up our K2 billion through the supplementary budget so that we can pay our own debts to the Independent Power Producers and fix our balance sheet,” he said.
“Second, we want to sell the B and C assets, which are the provincial and rural grids, by October to bring in revenue to help retire older debt.
“Third, by December, we want to sell the rest of the B and C Centre businesses to the private sector and operate a model just like the one BSP is using, with the Government owning less than 50 percent of the shares. I’m looking at the private sector owning the largest share of the new business going forward.”
Mr. Maru said the Marape-Rosso Government has a once-in-a-generation opportunity to reform the electricity sector in the national interest.
He said the goal is to benefit industry, consumers and investors while supporting unprecedented economic growth.
Mr. Maru said he will present a submission to Cabinet next week seeking approval for the plan.
“I inherited a company in an insolvent position. Within six months, we must stop the bleeding, put PPL’s balance sheet right through a proper court-sanctioned scheme of arrangement, and open the door to investment,” he said.
“PNG Power needs to deliver reliable, affordable power for the next generation.”
The Minister thanked Minister for State-Owned Enterprises Hon. William Duma and Kumul Consolidated Holdings (KCH) for the restructuring groundwork already completed.
He also acknowledged PPL Chief Executive Officer Paul Bayley and PPL staff for their work so far. “There is a lot of hard work ahead of us, but together we can do it,” Mr. Maru said.