The recent media reports on the power outage in Lae and the alleged overseas trips taken by the Chief Executive Officer and the Board members of PNG Power Ltd has angered the Prime Minister and the public.

This has generated a serious concern amongst the Board members of PNG Power Ltd who convened an urgent Board Meeting on the 31st October 2013 to discuss the power outage issue and the overseas travel.

The Board expressed at its meeting held on Thursday, 31st October, 2013 that it had in fact raised concerns about the frequent trips taken y the CEO and had previously tasked the internal audit team to conduct an audit into the overseas travel by the CEO and the staff of the organization and a report was going to be provided to the Board in its next quarterly meeting.

Whilst that was pending, the concerns by the Prime Minister came out in the daily newspapers in respect to the same issues. The Board of PPL would like to assure the Prime Minister and the public that as of the date of the meeting, actions are being taken to address the concerns raised by the Prime Minister and the public. The Board resolved in the meeting that:

1. All overseas travel by the Board, the Management and the Staff of PPL will be banned and that where it is really necessary for a trip to be taken, it has to be approved by the Board prior to the trip being taken.

2. Any trips to be taken by the Board and or the CEO has to be vetted through the IPBC.

3. As to the current power outage in Lae, the Board was informed that the Ramu 1 Power Station was shut down due to flooding of the machine hall. The flooding of the machine hall occurred because the pumps at the machine hall failed to work and pump the water out of the station. The Board viewed this as a serious matter and resolved that an independent technical investigator will be appointed soon to investigate the matter and recommend maintenance plans that are done proactively by the Management to avoid a repeat of the same situation from happening in future. This exercise will also extend to the other hydro power station facilities of PPL nation wide.


4. In Lae, PPL will be installing a temporary 10 Megawatt emergency generator as an additional standby power generation unit. This 10MW unit together with the existing standby generators in Lae should cater for the Lae load and eradicate the power woes in Lae when the Ramu Power Station is undergoing planned or emergency maintenance. The estimated lead time for installing the emergency generator is about 8 weeks. This is a temporary solution only, the long term solution for Lae is the IPP that PPL is currently finalizing.

5. In Port Moresby, PPL has taken necessary actions to rectify the power situation. The remedial program by PPL for Port Moresby is as follows:

• PPL has purchased a 10 MW GT engine as a replacement for the failed Kanudi GT Unit . This is scheduled to arrive in Port Moresby by 5 November 2013. The target date for the completion of the works and to get the Unit running is 15 November 2013.
• New Step up transformers for the new Kanudi GT Units have been installed and are awaiting the GT Output Settings to be varied

• PPL has put in a submission for approval to IPBC for the lease of 10MW Diesel Units from Aggrecko to be commissioned at Moitaka. The Units have been provided by the Supplier but is awaiting IPBC approval since 9 October 2013. Given the delay experienced in the approval process, the expected target date for the Unit to be commissioned is 7 December 2013.

• The return to service of the Moitaka Diesel Unit 3 is being worked on by Contractors who are on site working on the Unit with pre commissioning checks underway. The expected target date for the unit to start running is 7 November 2013.

The Board would also like to refute the report in the media that the entire Board and Management were overseas in Israel, Iceland and then on to England.
The Board would like to state that only two Board members and the CEO were in England for the World Cup. They represented PPL because PPL is a major sponsor for Team Kumuls and was specifically invited by to be there.

Thomas Laka
DEPUTY CHAIRMAN – PNG POWER LTD BOARD