PNG Power Limited (PPL) will appeal the National Court’s decision delivered on 7 July in relation to a claim brought by Dirio Gas & Power Limited against PPL, Kumul Consolidated Holdings (KCH) and the State.
PNG Power Chief Executive Officer Paul Bayly said the company would review the details of the judgment before filing its appeal.
“PPL will review the details of the National Court decision and will lodge an appeal, citing, among other matters, the Capital Cost Recovery, which has inflated the billings, and the historical dispute with Dirio regarding the commercial terms in the Power Purchase Agreement (PPA), which runs from 12 September 2019 to 11 September 2044 for a period of 25 years,” Mr Bayly said.
He said the Capital Cost Recovery and other pass-through costs should never be passed on to a single-source power buyer such as PPL, even if tariffs are adjusted.
“PPL has always maintained the position that, with these pass-through costs, no single power buyer can operate commercially in a sustainable manner. Such commercial practices are neither pro-people nor pro-development and are uncommon in other jurisdictions. We therefore consider them to be unfair,” he said.
Mr Bayly said Dirio’s initial billing of up to K300 million should be viewed in that context, noting that the Court ultimately
awarded only about half of that amount.
He also said the National Court decision had broader implications for the Government’s privatisation agenda.
“The National Court decision is also detrimental to the Government’s privatisation agenda, and the appeal will address this issue,” Mr Bayly said.
He added that the Court had recognised PPL as a stand-alone commercial entity and dismissed all claims against KCH and the State.
“The Court also recognised the individual status of PPL as a stand-alone commercial entity and dismissed all claims against KCH and the State, stating that Dirio should pay their costs in relation to this matter,” he said.
Mr Bayly said PPL would file its appeal well before the prescribed 40-day deadline.