PNG Power Ltd owes about K300 million to independent power producers (IPP) , according to IPP industry group chairman David Burbidge.
“There are still large amounts of money outstanding to some IPPs amounting to hundreds of millions of kina,” he said.
“The situation is clearly unsustainable.”
There are five IPPs supplying electricity to PNG Power.
“While we welcome (PNG Power’s) initiatives in getting more generation on line, the fact remains that PNG Power is trading while insolvent,” he said.
“It simply doesn’t have the cash.”
Burbidge said there had not been a price increase since the tariff was frozen in 2013.
“How the new generation will be paid for is going to be interesting,” he said.
He pointed out that the ageing network and transmission lines “require substantial upgrades to avoid constant outages and power quality issues”.
“There is no generation shortfall. The network is the root cause of poor power quality,” he said.
“Of further concern is a lack of planning, transparency and coordination of new generation, especially multiple announcements of new projects for the Ramu grid.
“We call for an inclusive, collaborative approach to the issues by the Government and involve all stakeholders to solve (them).”
Attempts to get a comment from PNG Power were unsuccessful.
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