CLEAR THE DEBT, SELL THE WORKING PARTS

by MICHAEL J. PASSINGAN

Papua New Guinea has been independent for fifty-one years. Thirteen per cent of its people have reliable electricity. Grid power reaches the towns and stops there; nineteen isolated provincial systems burn diesel at a price that has put PNG residential tariffs among the highest on earth, and World Bank data once ranked the country third in the world for blackouts per month. This is not the legacy of geography or bad luck. It is the accumulated output of decisions, and the people who made those decisions have names, portfolios and parliamentary pensions.

Here is what the government now admits. PNG Power carries more than K2.3 billion in loans. Its "C" centres, Wewak, Daru, Vanimo, Alotau, Lorengau, bleed K80 million a year. More than a quarter of everything it generates is lost to theft and decay before a bill is raised. It owes upwards of K1.2 billion to its own suppliers. The minister responsible, Richard Maru, calls it insolvent, loss-making, and the source of "the most expensive power tariff in the world."
Maru said that after one week in the job. The books were not encrypted. The debt did not materialise in July. Everything Maru found in seven days was sitting in the same ledgers his predecessors were handed, and it was found the moment a minister had reason to look. For years the answer from Waigani was that PNG Power faced challenges, global economic conditions, foreign exchange shortages, fuel costs, unpaid bills, ageing infrastructure, an inventory of weather, recited while the lights went out.

The arithmetic was never hard. PNG Power sells electricity at 76 toea to K1.00 per kilowatt-hour. In 2025 it bought Munum Power's diesel at K2.76, a margin of minus 200 per cent, and Dirio's gas at K1.14. Someone signed those contracts. Maru now has lawyers and forensic accountants examining whether the 2019 power purchase agreements were fraudulent, and says he will take them to court to have them nullified: "I want to know how we entered into agreements that we knew we would be losing money from." A fair question. It has been available to ask since 2019.

In July the National Court ordered PNG Power to pay Dirio K180,778,462.68, finding it in substantial and ongoing breach. Suppliers had long since stopped waiting for the money, a PNG Power executive conceded that when producers load-shed the capital, they were within their rights, because the utility was not paying them. The State does not pay its own electricity bills either. Government arrears to PNG Power ran to some K460 million, while illegal connections drained K25 million a month. A utility looted from below and stiffed from above, told to electrify a nation.

And it was told exactly that. In 2018 the government stood beside Australia, Japan, New Zealand and the United States and promised 70 per cent electrification by 2030, US$1.7 billion of foreign money against a 13 per cent baseline. The World Bank put up US$30 million in 2021 aimed squarely at PNG Power's financial performance. USAID ran five years to 2025 with the stated objective of demonstrating measurable increases in that same viability. Both programmes have now ended. The utility is insolvent. Four years remain on a promise that will not be kept, and nobody in Waigani will be asked to account for it.

On 14 July 2026 the Prime Minister removed PNG Power from State Enterprises Minister William Duma and handed it to Maru. Asked in Parliament what the reshuffle was for, he said it followed four years of performance review and was meant to improve efficiency before the 2027 election.

Four years of review produced a portfolio transfer. One week of a new minister produced the numbers.

What Cabinet is now considering is a proposal to clear the K2.3 billion, sell the "C" centres, and prepare Port Moresby, Ramu and Gazelle for partial sale. The State ran the asset into the ground and will now sell the working parts. The provinces get the diesel.

The independent producers, for their part, reject the blame. Their chairman David Burbidge says the IPPs are creditors, not the cause, and points to frozen tariffs, high system losses, poor collection, ageing plant and operational inefficiency, structural failures that long predate any PPA and require decisive leadership rather than attempts to shift responsibility onto companies that honoured their contracts.

He is describing the same thing from the other side of the invoice. Both accounts converge on a single fact: for two decades, nobody with the power to fix this was ever made to.