KEITH JACKSON | Sources
PORT MORESBY – Papua New Guinea’s multinational electrification partnership could be in jeopardy after the O’Neill government awarded contracts to companies from China without open tendering, according to Opposition Leader Patrick Pruaitch.
Pruaitch said the government’s approval of the Ramu 2 hydroelectric project has led the Americans to reconsider their involvement in the five-nation partnership which was announced at last year’s APEC summit.
“The US government and American corporations are believers in fair play and the US government reaction is not surprising,” Pruaitch said.
But, in a stinging gibe at Australia, he said the Australian government would still want the project as it “is happy to encourage third parties from Australia to enter ‘secretive sweetheart’ deals.”
“To save face and to comply with PNG laws, the government should allow the board of PNG Power to call new tenders for Ramu 2, along with rival bids for similar quantities of electricity from gas and other energy sources.
“The same process should be undertaken for Yonki to Hagen electrification, allowing companies from the US, Japan, Australia and New Zealand to participate in competitive bidding.”
Pruaitch said opening up tendering could “resolve the current impasse facing the PNG electrification partnership”.
It would also would be “in the public interest as “the increase in future power rates would only be a fraction of what the public would otherwise face under the Ramu 2 deal.
“Similarly, the Yonki to Hagen power distribution could cost much less than K1 billion to construct, reducing the nation’s debt burden,” he said.
Pruaitch said if the O’Neill government failed to adopt these measures it would add to the list of scandalous, corrupt and wasteful deals it has previously undertaken including the K3 billion UBS loan fiasco, more than K2 billion spent on the APEC summit, the corrupt Manumanu land deal and the deteriorating education and health services around the country.
The 180 MW Ramu 2 project was awarded to Chinese company Shenzen Energy at a projected cost of K2.7 billion.
A smaller 58 MW gas-fired power plant currently commissioned in Port Moresby is costing K340 million to build, generating electricity at about one-third the cost.
Pruaitch said the K1 billion Yonki to Hagen electrification project, awarded to Chinese company TBEA Ltd without a tendering process, was in breach of the Public Finance Management Act and had to be approved “through the back door”.
PNG has one of the world’s lowest electricity distribution rates with only about 12% of PNG households having access to electricity.
The electrification partnership deal between PNG and the US, Japan, Australia and New Zealand was a highlight of the APEC summit.
Pruaitch said if the US pulled out of the partnership, it was likely New Zealand would follow suit because prime minister Jacinda Ardern would refuse to be drawn into any deal that had the stench of corruption.
“It is my belief the Japanese may take a more diplomatic approach while the Australian government is happy to encourage third parties from Australia to enter ‘secretive sweetheart’ deals,” Pruaitch said.
Pruaitch said the US pulling out of the multi-nation partnership would represent a major embarrassment for Papua New Guineans.