PNG Power owed almost K200 million by government agencies, outgoing minister reveals

Government departments, hospitals, schools and police stations across Papua New Guinea are sitting on unpaid electricity bills worth nearly K200 million, a debt burden that outgoing PNG Power Minister William Duma says is crippling the state-owned utility's finances.

Mr Duma raised the issue on Monday during a formal handover of ministerial responsibilities for PNG Power to incoming minister Richard Maru, using the occasion to lay out the scale of the company's financial troubles before passing the portfolio on.

 PNG Power owed almost K200 million by government agencies, outgoing minister reveals

He told those present that state agencies were PNG Power's largest customer base, yet remained among its worst payers.

"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.

Beyond unpaid government bills, Mr Duma pointed to long-standing power purchase agreements with independent power producers as another drain on the company's books, agreements that lock PNG Power into payments regardless of its financial position.

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

Even so, the outgoing minister struck an optimistic note about the utility's direction under Chief Executive Officer Paul Bailey, crediting recent management efforts with steering the company toward stability after years in the red.

He noted that PNG Power posted a modest K1.7 million profit last year, its first in more than 20 years.

"That is a good turnaround. It is a sign of better things to come," Mr Duma said, adding that government reforms would continue under the new minister to strengthen PNG Power's finances and improve access to reliable, affordable power for Papua New Guineans.