Andy Park: In Papua New Guinea, less than one in five people are connected to mains electricity. It's one of the lowest rates in the world. That's unlikely to change anytime soon. An ABC investigation has revealed that the country's only power provider has been trading insolvent with over a billion dollars in debt. PNG correspondent Marian Faa spoke exclusively with insiders at PNG Power Limited.
Marian Faa: Ian Chow manufactures one of Papua New Guinea's most iconic products, snacks biscuits. But in PNG's industrial hub of Lae, unreliable power puts his entire business at risk.
Ian Chow: When the power goes off, your machine will stop and within three minutes you will have a big fire in the ovens.
Marian Faa: So Mr Chow chooses to run his factory almost entirely off diesel generators.
Ian Chow: The cost of power is mainly the cost of diesel, the cost of maintenance for your generators.
Marian Faa: It's a common story in PNG where less than one in five people have access to mains electricity. Those who do regularly face blackouts, some lasting days or even weeks.
Ian Chow: I think it threatens everybody's business.
Marian Faa: In a six month investigation, the ABC has found PNG Power Limited, the country's only electricity provider, is trading insolvent. The state owned enterprise owes over 1.5 billion dollars to its creditors. Company insiders have spoken exclusively with the ABC on the condition of anonymity. They describe a once thriving institution that's crumbled to its knees.
Company Insider: You're having continuous blackouts and there's a lot of people and customers going on all social media and complaining.
Marian Faa: Do you think PNG Power is at the brink of financial collapse?
Company Insider: Definitely.
Marian Faa: The story behind PNG Power's downfall is long and complex. Insiders say the company has been gutted of expertise and left directionless with four different CEOs in the past year alone. On top of that, it grapples with ageing infrastructure and hasn't been able to increase its prices for 11 years because of a government tariff freeze. But some say the problems go deeper.
Company Insider: There's huge systematic corruption in this country. People need to speak up.
Marian Faa: About an hour from Ian Chow's factory in Lae, Arnold Pereira is a financial manager at PNG's largest pig farm, which also relies on generators.
Arnold Periera: So we maintain 3, 275 kVA of generator sets.
Marian Faa: In 2022, a contractor was paid almost 2 million dollars to connect 10 properties in the area to the power grid. But at Rumian Farm, that never happened. A PNG Power audit claimed the contract was awarded without board approval. And about 200,000 dollars in funding paid to the contractor are still unaccounted for. Are you aware that a contractor has been paid to actually connect this property to the mains power grid?
Arnold Periera: No, actually. I'm not aware. That's the first time I heard it.
Marian Faa: PNG Power has not responded to the ABC's questions. In a separate statement, the company said it had increased its revenue by 16 percent and was investing 50 million dollars to address financial losses. But David Burbidge, who represents the country's independent power providers, thinks more drastic action is needed. Collectively, he says they're owed over 600 million dollars.
Dave Burbidge: Well, at the moment, the lights have been kept on through the goodwill of the IPPs. There's no other way to say that.
Marian Faa: But the question is, for how long?
Andy Park: Marian Faa there.