By Staff Reporter

Peter O'Neill Blasts PNG PM Marape's Billion-Kina Power Scam

9/10/2024

Former Papua New Guinea Prime Minister Peter O’Neill has raised concerns over a new power purchase agreement signed between PNG Power and Dirio Gas and Power, which he claims could have serious long-term consequences for the country's energy sector. Speaking at the National Energy Conference in September 2022, the agreement includes the development of a 66MW gas-fired power station at Hides, Hela Province, and O'Neill warns this could repeat past mistakes.

O’Neill emphasized that while the MRDC Chief Operating Officer assured that the new power source would be affordable and clean, similar to the power Dirio supplies to Port Moresby, no details on the pricing were provided. "We’ve already signed the PPA with PNG Power, and we’re now working with the National Energy Authority to secure regulatory approvals to commence the project," said the COO, but O’Neill argues that these promises must be critically examined in light of past failures.

MRDC and Dirio are partnering again with Twenty20 Energy, the group behind the Caution Bay power station. O'Neill is particularly concerned with the involvement of Twenty20 Energy, which is owned by Asia Pacific Energy Ventures, a Singapore-based company connected to several British Virgin Islands entities. "This project is being led by companies that have a track record of draining resources from our nation while giving very little in return," O'Neill stated.

According to Twenty20’s website, they will design, build, and operate the 66MW gas-fired power plant in Hela and provide maintenance services for 20 years. O'Neill warned that while the project promises investment in local communities, the real beneficiaries may be foreign companies. "These companies are claiming to improve our quality of life, but in reality, they are taking ownership of our assets for their own profit," O'Neill remarked.

The endgame for this project, O’Neill said, is to power the Highlands and Ramu Grids, targeting large electricity users in Lae and major mining sites such as Hidden Valley, Ramu Nickel, and Wafi Golpu. However, O'Neill criticized the Marape government for borrowing K1.423 billion from China EXIM Bank to fund the transmission line from Hides to Yonki. "We’re sinking deeper into debt, and the people of PNG are seeing no tangible benefits," he argued.

The former Prime Minister highlighted that two stages of the transmission line were completed over two years ago, but no electricity has flowed through it. "The state is burdened with debt, and yet no one is benefiting from this costly project," O’Neill said, adding that PNG Power does not have the funds to service the connection, leaving hydropower projects like Pauanda and others stranded.

O’Neill also noted that the Dirio gas-fired project is sidelining cheaper, renewable energy solutions like hydropower projects in Enga, Simbu, and Morobe. He criticized the Marape government for allowing these hydropower projects to be bypassed for more expensive gas-fired options. "It’s clear now why the Wafi-Golpu mine has been delayed for five years under Marape—it's a deliberate tactic to force the mine to purchase electricity from these expensive gas-fired power stations," O’Neill claimed.

According to the Twenty20 Energy website, their Power Island FSRP Project has been approved by the PNG Cabinet and is expected to provide 283MW of power generation capacity in strategic locations across the country. However, O'Neill questioned the real beneficiaries of these projects, saying, "We must ask ourselves: who is benefiting from this power expansion? It certainly isn’t the people of PNG."

O’Neill pointed out the failures of the Caution Bay power station in Port Moresby, where residents have experienced more blackouts since the project began. "Port Moresby’s grid has been left financially crippled, and excessive payments to Dirio are draining PNG Power," he warned, adding that these payments are being sent offshore to companies in the British Virgin Islands.

The former Prime Minister called for a shift in focus toward hydropower solutions, which he said are cheaper, renewable, and more sustainable. "It makes no sense to borrow billions to build transmission lines that ultimately benefit foreign companies, while our people continue to suffer from unreliable and expensive power," O’Neill argued.

He also criticized Prime Minister James Marape for recently asking the same companies involved in the Dirio Caution Bay project to provide a report on the state of Port Moresby’s power supply. "In 2019, PNG Power management clearly warned Marape that the Dirio power station was not needed and was too expensive, but he refused to listen," O'Neill said, adding that the turbines had already been ordered before any agreement with PNG Power was finalized.

O'Neill expressed deep concern for the future of PNG’s power sector, stating that the people of Port Moresby have paid the price with constant blackouts and PNG Power now on the verge of financial collapse. "We are on the brink of repeating the same mistakes on a much larger scale with the Highlands and Ramu Grids," O’Neill concluded, urging the government to reconsider its energy strategy.

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