DIRIO REJECTS CLAIMS OVER POWER DEAL WITH PNG POWER

DIRIO Gas and Power Company has rejected recent claims by the Minister responsible for PNG Power Richard Maru that its power supply agreement or power purchasing agreement with PNG Power Limited is illegal or unfair.

In a statement the company says, the agreement was signed on 12 September 2019 after more than a year of negotiations and was approved by PNG Power, Kumul Consolidated Holdings, the National Executive Council and the Independent Consumer and Competition Commission.

Dirio says PNG Power’s financial losses are mainly due to power theft, technical losses, high operating costs and the company’s own dispatch decisions, not its power prices.

It says the power station was operated at only about 30 percent of its capacity in 2025, increasing the cost of electricity.

The company also says the National Court has ruled in its favour over the validity of the agreement and payments owed by PNG Power.

Dirio says it will continue supplying reliable electricity to Port Moresby while defending its legal rights.

Meanwhile, Minister for International Trade and Investment Hon. Richard Maru has reaffirmed government support for Independent Power Producers (IPPs), acknowledging their vital role in sustaining PNG Power Limited (PPL), which currently lacks capital for new generation projects.

Maru stressed that the government would continue to honour Power Purchase Agreements (PPAs) with IPPs that provide profitable arrangements for PPL.

He clarified that the government’s focus is on renegotiating or nullifying specific PPAs with Dirio Gas and Power Limited and Daewoo Posco Limited (Munum), which he said are draining PPL financially and contributing to its insolvency.

He questioned why the pricing formula used for NiuPower was not applied to Dirio, despite being signed four years later, and vowed to investigate the matter.

Maru stated: “We must get PPL out of these deals and renegotiate better terms. I am looking at going to court to nullify these Agreements.”