PNG Power Limited CEO, Paul Bayly says PPL will be reviewing details of a National Court Decision that ordered PPL to pay independent power producer, Dirio Gas and Power Company Limited, a sum of K180 million.
Bayly released a statement after the court’s ruling stating PPL will lodge an appeal citing among other matters, the Capital Cost Recovery which has inflated the billings.
The statement described the legal battle as a historical contest with Dirio in relation to the commercial terms in the Power Purchase Agreement (PPA) that will run from 12 September 2019 to 11 September 2044, a 25-year period.
The Court’s decision handed down on 7th July by Justice John Carey is based on the Power Purchase Agreement that PNG Power and Dirio Gas and Power Company Limited entered into in 2019.
The Dirio plant is located west of Port Moresby towards the PNG LNG site and would supply electricity to PNG Power’s Port Moresby Grid, as agreed to in the Power Purchase Agreement.
The court heard that payments by PPL for the utility ceased since September 2022, three years after the agreement was established and the debt continued to increase.
In 2023, local media reported that Dirio Board Chairman Issac Lupari said PNG Power is understood to owe Dirio Power Limited K180,778.463.68. In that same report, Lupari said he wrote to the then PPL chairman McRonald Nalet stating that continued non-payment by PNG Power would result in Dirio’s evasion of its operational contracts.
Documents presented in court showed that PNG Power wrote a letter to Dirio Gas and confirmed it had an outstanding of K142.6 million. The evidence suggests that in spite of the accumulating charges, the utility continued to receive full electricity.
The court heard that by December 2022, the debt had increased to over K180 million and by May 2025, it reached K278 million.
The court found that PNG Power did not follow requirements under the Power Purchase Agreement by not issuing formal dispute notices against monthly invoices.
However, CEO Bayly when responding to the court’s decision said the cost and other pass-through costs should never be passed onto a single source power buyer such as PPL even if tariffs are adjusted for.
“The Appeal against the Decision will be filed in Court sooner than the prescribed 40-day period,” said Bayly.
On the other end of the court ruling, Dirio Power have welcomed the Court decision in its favor saying the judgment confirms Dirio Power’s long-held position that the contractual obligations entered with PNG Power must be honored.
Dirio Gas and Power CEO James Nelson said the decision was an important result for contractual certainty and the future of Papua New Guinea’s energy sector.
“Dirio is grateful to the National Courts for their time and focus in resolving the matter of the unpaid bills,” said CEO Nelson.
Board Chairman of Dirio Gas and Power Company, Isaac Lupari said the ruling provides the certainty needed for Dirio to move beyond the dispute and refocus on delivering for Papua New Guinea.
“We thank the National Court for upholding the rule of law and recognizing the contractual obligations that underpin investor confidence in Papua New Guinea,” said Lupari.
PHOTO FILE: Sourced from PPL website gallery
