PNG Power is currently undergoing a review of its financial reporting following the discovery of a number of issues relating to the integrity of its financial records. In 2018, PNG Power management discovered significant inaccuracies in financial reporting, which includes amongst other things, under-reporting of expenses.
The news article in the Post-Courier regarding our shareholder, Kumul Consolidated Holdings declaring its 2018 dividends, reported a financial loss of K197 million for PNG Power. PNG Power would like to make it clear that the 2018 financial reports are still under review and a final unaudited figure is yet to be released.
For the past six years, PNG Power have had independent, external audits undertaken. Each audit has produced a number of negative and irregular qualifications relating to the Balance Sheet and Profit & Loss. Unfortunately, no action has been taken until 2018 to correct these very serious accounting irregularities.
The Board and Management appointed in 2018 to reform PNG Power will not tolerate inaccurate financial data or a lack of financial integrity. For this reason, we have hired a new Finance Management team and engaged Deloitte with the assistance of external auditors Ernst & Young, to finally fix the very long outstanding accounting issues at PNG Power.
The Board and Management of PNG Power will not tolerate inaccurate financial data and thus have embarked on this plan to correct our financial records and have an accurate report produced by late September 2019.
In addition, PNG Power continues to reform of the company to produce more reliable, accessible, safe and affordable electricity for all Papua New Guineans. PNG Power has suffered from poor leadership and an unsustainable business model dependent on high cost, imported fuels and expensive Independent Power Producers, resulting in a history of government bailouts, tariff increases and debt to prop the company up.
PNG Power is changing the business model to one of Least Cost generation and transmission. This involves switching to low cost hydropower and utilizing domestic gas as a transitionary fuel, eliminating the use of diesel, heavy fuel oil and expensive Independent Power Producers on the two major grids - Ramu and Port Moresby.
PNG Power has also replaced overseas suppliers with local businesses and already this is yielding results with lower costs and a faster delivery of essential electrical parts and consumables including meters, cable, conductors and the like. We are a local company and want to support local jobs growth while also reducing our own costs of doing business.
Financial results for 2019 are demonstrating a return to financial sustainability and integrity in reporting.
“In 2019 there have been no cash losses and management ensures the company operates within its means.
“The continuous disciplining of corrupt and fraudulent practices within the company is time consuming but is currently improving attitude within the workforce and customer service performance.
“I am delighted with the support from our customers (especially those that pay on time), our suppliers and the team of PNG Power who continue to demonstrate a strong commitment to returning to PNG Power to her best,” said Ms Blacklock.
Acting Managing Director