Bekker Says Contract Reviews Are Important
by PNG Business News - April 19, 2021
According to PNG Power Ltd, renegotiation and reviews of current contracts with independent power producers (IPPs) make the business healthier and more competitive (PPL).
PPL managing director Flagon Bekker made the statement in response to questions raised by IPP industry groups (IP3) about PPL unilaterally reviewing and renegotiating current contracts and contractually negotiated prices to supply electricity to the grid.
IPPs, according to Bekker, must be adaptable enough to evolve as fiscal, technical, and environmental factors change with time.
“We asked IPPs to respond to a survey late last year where we asked them for their suggestions and next steps in dealing with the current commercial status quo,” he said.
“In fact, we offered four or five alternatives to renegotiation. None responded.”
According to Bekker, analysis shows that in terms of pricing, spending, and the overall economy, it is best to keep IPPs' share of the total market minimal.
“Egypt is the best example of countries that have kept IPPs to a smaller share of the total (market) and found it easier to weather macro-economic shock and have greater freedom in deciding where to source finance for power investment in the future,” he said.
“The IPPs not only make the macroeconomy weaker, but they are also the cause of their own problems.
“PPL is leading to change this.
“IPPs should not resist.
“They should partner by suggesting solutions for the future.
“PPL will send the survey out again and we hope they respond this time.”
According to Bekker, there was a lot of analysis and support focused on post-negotiation evaluations, which shows that the renegotiation process contributes to the discovery of lessons and eventually the execution of those lessons.
“Off the top of my head, here is a list of countries that have renegotiated PPAs in full or in part over the years: Philippines, Brazil, India, Argentina, Mexico, Turkey, Poland, China (among others),” Bekker said.
PNG Business News - June 01, 2021
PNG Assets Have Potential To Earn, Says Bekker
PNG Power Managing Director Flagon Bekker said the company's assets have a lot of potential for generating income and maximizing their use to help the country distribute energy more efficiently. PNG Power has the capability and assets to provide that opportunity and needs to look at the best solutions to accomplish this sort of outcome, he said. Electricity markets have altered worldwide and in the region to produce better benefit for the economies of those nations, he said. “Reform is inevitable for the power sector in PNG as it has been and continues to be across the globe. PNG is not unique,” Bekker said. “Reform will consist of a measured, step by step approach by PPL and the other market participants. It will mean lower power prices for the people of PNG through transparent, competitive investment and operating processes in generation, transmission and distribution and retail business units. Reform is about change. Change for a better stronger and more sustainable sector.” He highlighted that, after the recent passage of enabling legislation, the National Energy Authority (NEA) will take over regulatory tasks from PNG Power and the ICCC. He stressed that PNG Power could not be both a regulator and a participant in the business at the same time, that it could not be both the referee and the player, as well as the third umpire. “It must now behave in a more commercial manner to implement the programs necessary to achieve the government’s electrification agenda. PNG Power would become a competitive participant in the market in the future, with a single buyer responsible for power demand throughout the country's electrical infrastructures. “I want all PNG Power staff to understand the vision that we have for the organisation and its important role in achieving the goals of the government; this requires that we must act in a commercial manner, especially in dealing with donors and investment parties. “We should not be afraid of change; we must all embrace it,” Mr Bekker said when responding to the media criticism by the Energy Workers Union about the changes and the reforms initiated at PNG Power.” Reference: Post-Courier (31 May 2021). “Bekker: PNG Power Is Able To Make Money.”
PNG Business News - June 14, 2021
PNG Power Undergoes ISO Certification
PNG Power Limited will be subjected to an evaluation by its asset management standard unit in order to receive ISO 55001 certification. A third party will undertake the assessment and ISO 55001 certification process, which will take 12 to 18 months and include an evaluation of the company's present AM practices and processes, identification of gaps, and development of a roadmap for adoption. This will be the first phase in PNG Power's ISO 55001 accreditation process, which will be supported by USAID's PNG Electrification Partnership (USAID-PEP). The company's old and old infrastructure assets, according to PPL managing director Flagon Bekker, have continued to obstruct the delivery of dependable power to clients across the country. PNG Power has taken the first step forward in commencing the Asset Management Strategy and Framework for Management of PNG Power Infrastructure Assets, he added, under its new asset management (AM) unit. He explained that ISO 55001 accreditation is vital because it ensures that PNG Power has an asset management system (AMS) in place that caters for internal and external challenges influencing asset management in order to meet the company's goals. Risk management, ageing/aged infrastructure, supply chain and spares maintenance, maintenance optimisation, AM performance monitoring, and project/investment lifecycle assessment and planning are the six workstreams that the AM unit will focus on. PNG Power's asset management will be based on these workstreams. On the leadership front, it will be ensured that senior management has accepted responsibility for developing and communicating the AM Policy and Strategic Asset Management Plans to all stakeholders involved. The accreditation will also provide confidence that AM objectives have been defined, recorded, and disseminated within the organization, as well as that adequate planning has been put in place to meet the goals. PNG Power is also sponsored by the World Bank under its Energy Utility Performance and Reliability Improvement Project (EUPRIP) to strengthen infrastructure through rehabilitation and upgrade works, therefore the support from PEP is expected to complement the asset management strategy. PNG Power is also working with USAID PEP Activity to improve grid home connections, and the AM effort will guarantee that quality and dependable power reaches end customers.
PNG Business News - June 28, 2021
PPL MD Resigns, OIC Appointed Amid Power and Union Woes
PNG Power Limited’s Managing Director has been replaced with an Officer in Charge as the power utility continues to face operational challenges. This included a prolonged 16 hours of power outage last week Friday in Port Moresby that saw many business houses resort to generators to keep doors open to customers and deliver services. Earlier that day, it is understood an impending strike by the PPL Union was addressed by the management, led by the now resigned MD. A townhall meeting on Friday at the Airways Hotel in Port Moresby saw the PPL team and the former MD Mr Flagon Bekker address various stakeholders and media about the challenges that they were facing and what they were doing to turn the power company around. It was during question time, that Mr Bekker left after being notified by a staff that he was needed back at the PPL head office at Hohola. In a statement released Sunday, Chairman of PNG Power Limited (PPL) Mr Moses Maladina announced the resignation of the Managing Director, Mr Flagon Bekker, effective immediately on Friday. “Mr Bekker’s decision to leave the organisation after nine months are based on personal reasons,” Mr Maladina said. The Chairman also announced the appointment of Mr Obed Batia as Officer in Charge of PNG Power, whilst a more formal engagement is finalised. Mr Batia has over 30 years of service with the company and has served the Leadership Team with distinction and possesses outstanding credentials. I have every faith in Mr. Batia’s ability to provide much needed stability. The statement assured that the Chairman and Board of PNG Power will provide the new Officer in Charge and the Leadership Team with its full support, during the interim. “We assure all the PNG Power employees and their families, key stakeholders and suppliers, and the valued PPL customers of continued stability during this transition period,” Maladina said. “It remains our key priority, to focus on the objectives of our Annual Operating Plan and to deliver on a promise to provide accessible, affordable and reliable energy services to the people of Papua New Guinea. “I would like to take this opportunity to thank Mr Bekker for his time here at PPL and to wish him well, as he returns to his family in Australia,” the chairman said. Among the issues that need the attention of the new OIC is the cancellation of the Power Purchase Agreement (PPA) signed with Oil Search Limited last year for the Biomass and Solar Farm project located in Markham district of Morobe province. Local landowners have expressed disappointment following the release of a statement by OSL of the negative implications of the recent cancellations of the PPA with OSL for the solar farm and biomass project that was to be an additional source of power supply into the PPL Ramu grid. The company’s challenges include a K25 million monthly loss to power theft and millions owed in outstanding fees, particularly from Government.
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PNG Business News - August 12, 2022
Going Green: FAO-led EU-STREIT PNG Programme provides green-powered facility to local agricultural authorities to effectively service rural farmers
EU Funded UN Joint STREIT Programme in Papua New Guinea establishes a renewable energy-powered facility to support local government authorities in East Sepik Province, in delivering effective services to rural farmers and entrepreneurs. With generous support of the European Union, the FAO-led EU STREIT Programme officially opened a new 3 cluster office building on 10 August 2022, to host the Programme along with the East Sepik provincial divisions of Agriculture and Livestock, Cocoa Board and the National Agriculture Quarantine & Inspection Authority. The new-look office building is powered by 189 solar panels, which significantly reduce greenhouse gas emissions and reduces the collective dependence on fossil fuel. The solar panels supply the building with 90 KW of energy, relieving the resident agencies and authorities from relying on fossil-generated electricity for their needs, including lighting, ICT, water pumping, and temperature control. This zero-carbon-emission facility has the capacity to accommodate around 90 experts, technicians and extension service officers. Equipped with 120 batteries, the building can support staff’s operation for 36 hours in case of experiencing high cloud cover. The building, currently co-resided by the Programme and provincial agricultural bodies, will be transferred over to the East Sepik Provincial Administration at the end of the Programme and will continue to provide a sustainable base for sustainable support to agriculture-related services in the Province. Officiating the opening ceremony, His Excellency Ambassador Jernej Videtič, Head of the European Union Delegation to PNG, in his address, said: “I am happy to be here and to see that things are moving in the right direction to bring sustainable benefits to the people of East Sepik” Ambassador Videtič further highlighted that “with resources from the citizens of Europe to fund the EU-STREIT Programme in providing training, tools and support, the quantity and quality of cocoa, vanilla and fisheries products will increase. The objective is also to protect these quality products in international markets under the EU-STREIT introduced initiative of Geographical Indication.” The East Sepik Acting Deputy Provincial Administrator, Mr James Baloiloi, in his speech expressed his appreciation to the EU for funding the EU-STREIT Programme and the interventions that the Programme is doing in East Sepik and Sandaun provinces. “The STREIT Programme has gone ahead to introduce a culture of agribusiness that now enables the people of this Province and the people of Sandaun Province to have cash income that can sustain their livelihoods.” Mr Baloiloi added, “this infrastructure and building supports us and facilitates the service delivery to our people in this Province as well as Sandaun Province.” Thanking the EU for its generous funding support, Dr Xuebing Sun, the EU-STREIT Programme Coordinator, said: “the Programme has generated substantial impacts at beneficiary, local institutions and enabling business environment levels. This would not be possible with good partnership, increased ownerships and leaderships of the governments and implementing partners.” “This co-residing and close co-operation among UN agencies and their national partners in this integrated space reflect the partnership approach taken by the Programme to sustainably develop agri-enterprise activities in the region,” added Dr Xuebing Sun, adding “the new climate-friendly facility, which is fully powered by solar energy, also provides a space to welcome, advise and serve the farmers, including interested women and youth, who play very important roles along agri-food value chains”. “This kind of ‘green investment’ enables a shift to a more green economy for local institutions and infrastructure to meet cocoa, vanilla and fishery value chains stakeholders” advised Anthony Bennett, the FAO Lead Technical Officer of the EU-STREIT PNG Programme. United Nations’ implementing partners supporting the FAO-led EU-STREIT PNG present in the office include the International Labour Organization (ILO), International Telecommunication Union (ITU), United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP). The EU-STREIT PNG is being implemented as a UN Joint Programme (FAO as leading agency, and ILO, ITU, UNCDF and UNDP as implementing partners), is the largest grant-funded Programme of the European Union in the Country and the Pacific region. It focuses on increasing sustainable and inclusive economic development of rural areas through increasing the economic returns and opportunities from cocoa, vanilla and fishery value chains and strengthening and improving the efficiency of value chain enablers, including the business environment and supporting sustainable, climate-proof transport and energy infrastructure development.
Paul Oeka - August 12, 2022
CPAPNG annual meet to discuss global changes
Certified Practicing Accountants of Papua New Guinea will be hosting their 23rd annual conference with about 400 participants nationwide expected to attend the two day conference organized by CPA PNG in Lae Morobe Province from August 18 to19, 2022 CPAPNG was established in 1974 and has come a long way with a lot of achievements along the way. Over the years its membership grew from mere numbers to just below 2000 which includes 40% locals and 60% non-citizens. . The CPA PNG conference is one of CPAs three significant annual events on their calendar with this year's conference theme; Is PNG prepared for the recession?" The conference will see certain key leaders in executive management roles from both the public and private sector delivering presentations in line with the conference theme. CPA PNG's Executive Director Mr. Yuwak Tau said the theme of the conference was selected because there was a decline in the global economy and the general so when that eventuates small economies tend to be affected. He added that they have basically selected the theme that was current and appropriate so that members would find relevance during the course of the conference. “The meeting is to create intellectual and interactive discussions with seasoned business leaders to present and share their ideas and experiences to find probable outcomes within their business environment and industries in times of economic uncertainty”. Some of the topics to be presented by consultants are current significant issues such as crypto currency, transport pricing, bit coin block chain technology and stress management. This were some topics that people have heard about but have not really ventured into. Mr. Tau added that it would be quite hard to measure the benefits immediately but the participants will be able to look at insights shared during the conference that would be appropriate in the areas of employment, accounting, finance, auditing and others. The conference will create an environment where participants can also share information so That they can take points to apply in their work place and industries. In relation the Kumul petroleum Holdings had also presented a cheque of K50, 000 to support the coming event at their head office. The cheque was presented by KPHL's executive General Manager Corporate Affairs, Luke Liria and was received by CPA PNG Chairman Richard Kuna. Mr. Liria said KPHL has appreciated the effort put in by CPA PNG to ensure that its members in State owned enterprises and the private sector were given appropriate level of training and as part of KPHL's corporate social responsibility and commitment they hope that their support will continue to help the organization facilitate and make sure the accounting practices is of international standards. CPA PNG's Chairman, Richard Kuna acknowledged KPHL for their support and stated that he was looking forward to seeing KPHL being a big part of the upcoming conference.
Paul Oeka - August 12, 2022
BSP: Small to Medium Enterprises Loans reaches 60% rate.
Bank South Pacific's Financial Group Ltd Chief executive officer Mr. Robin Fleming has recently announced that the bank has granted more than K200 million as loans to small to medium enterprises under its credit scheme facility that the then Marape government had released to the bank to support Small to Medium Enterprise (SME) and local businesses during the peak of the COVID-19 pandemic. Mr. Fleming said about 1523 customer loans have been approved, that is about 60% of loan approval rates since 2019. Prior to this announcement BSP and the Department of Commerce and Industry (DCI) had agreed to increase the maximum loan under the small-to-medium enterprise (SME) credit enhancement facility to K5 million. The previous limit was K3 million when the Government first released K100 million as security to the bank under its K200 million SME allocation for BSP to rollout the loan facility last year. Fleming stated that even though they have exhausted and rolled out the bulk of the governments relief funds for SME's they will still be running the SME loan program under its credit facility scheme “At this stage, BSP has not received the funding planned for this year but that is not preventing BSP from giving loans under the facility”. “There remains significant capacity for BSP to continue to assess, approve and funds loans under the facility”. “The agreement with the Government did provide for momentum in the SME facility to be maintained while allowing for the Government budget and funding process to be adhered to”. As part of the government SME relief funding, Commercial Banks were allocated K200 million with BSP Financial Group receiving K100 million, NDB K80 million and another K20 million was allocated to the department of Commerce and Industry BSP could not comment on how the National Development Bank (NDB) is dealing with the K80 million it received, but the intent, when discussions were initiated, was that BSP would be lending to more mature SMEs and NDB to startup ventures. In addition to enabling SMEs to access lower cost of funds through the facility with BSP, the bank has also made it a responsibility to ensure that Government funding is preserved by not approving loans that have a higher risk of default.