MARU ORDERS LEGAL REVIEW OF PPL–IPP AGREEMENTS

PNG Power Minister Richard Maru has ordered a legal review into the company’s power purchase agreements with Independent Power Producers, (IPP) saying the deals may have contributed to the utility’s financial crisis.

In a statement Maru said lawyers and forensic accountants have been engaged to review agreements with Munum Power and Dirio to determine whether they are illegal, fraudulent or unfair under the Fairness of Transactions Act.

He said PNG Power is buying electricity at prices higher than it sells to customers, with Munum Power costing K2.76 per kilowatt-hour, Dirio K1.14 per kilowatt-hour, while PNG Power’s retail tariff ranges from K0.76 to K1.00 per kilowatt-hour.

Maru said if the review finds that the agreements are unlawful or unfair, the Government will seek to have them nullified through the courts.

He said the legal review forms part of a broader reform agenda to take PNG Power out of insolvency, reduce blackouts and restore the company to profitability.

Meanwhile, Minister for State Enterprises William Duma has strongly rejected allegations of kickbacks and corruption in PNG Power Limited, saying the claims are politically motivated and made by people who do not understand how the national power company operates.

Speaking in Port Moresby this week, Mr. Duma said the constant public criticism ignores the “daily stress and countless hours” his office has spent with advisors, Kumul Consolidated Holdings and PPL management to stabilize the struggling utility.

He defended the government’s oversight of PPL, outlining key accountability measures. The Minister stated that PPL’s books are audited annually by the Auditor-General and made public on the AGO website.

He also said he tables PPL’s Annual Operating Plans to the National Executive Council every year for approval, and all expenditure on employees, contractors, diesel and equipment is done under those NEC-approved plans.

To address PPL’s long-standing financial problems, Mr. Duma revealed that KCH had engaged leading international advisory firms including KordaMentha and the Big Four accounting firms to conduct a full review of PPL’s structure and operations.

Mr. Duma reaffirmed his commitment to reforming PPL and ensuring reliable and affordable power for Papua New Guineans.