Give power plants to super-funds

THERE is talk of a plan to build a new 40 megawatt power plant in Port Moresby to complement the electricity supplied by the PNG Power Rouna hydro scheme, its diesel generated plants and those supplied by the private Kanudi power plant.

Word on the grapevine is that there has been a great deal of interest shown by companies, both from within and outside, vying to build the plant.
To our mind, the government must take a long-term view on the issue of who is engaged to provide services to Papua New Guinea.

It is true that there is a lot of interest in building a power plant for Port Moresby because there is a big market for it. It would be a profitable venture.
The same interest would not be shown if the tenders were out for a power plant for Banz in Jiwaka or Bogia in Madang, Maprik in East Sepik or any of the other small townships around the country.

Yet, these places need provision of power, perhaps more so than those places which already have access to power supply.
So those companies which show an interest in one place must be able to also, if required, build in the smaller and less profitable places.

Only the state can undertake those services provision in these areas and, if it were to be awarded to a private group, it would take a very unique team with a longer term view and not just quick short-term
profits.

Such a team would have to put up a lot of money upfront but be prepared to wait longer for the money to be returned and for profit to be made.

It would take a team which believed that the initial provision of services to far flung areas would create excitement and stimulate economic growth, which would in time expand the customer base for the service and in the end return a profit. Such a team can be put together if the superannuation funds could be convinced to be involved in these ventures.

The funds are cashed up. If the investment fits their investment guidelines and if their separate boards can be convinced to put up the money, such an entity could well provide the government with a very powerful group that could undertake the provision of power, water and telephony services in towns and cities as well as elsewhere in the country.

Our proposal would be to pit together the combined resources of private sector workers’ Nasfund, the public officers Nambawan Supa, the Defence Force Retirement Benefits fund and even draw in other funds such as the Teachers Savings and Loans and the Police Savings and Loans to form a mega service providing company.

This would, if the various acts could allow for such a entity to be created, provide the entity that would form the pincher movement to advance against the chronic lack of services and under-development in
PNG.

Workers funds in the region has build up neighbouring Singapore, Malaysia and many of the other Asian tigers. Service provision in this country is quite unique. It costs a lot of money. Service has to be extended to many parts of the country, in most parts it would be quite uneconomical for businesses operating purely for profit.

All providers of essential services such as water, power and telephony services among others would need to be in there for the long term. That is why right from the start it is important that there is no one off knee jerk reaction to appoint companies willy-nilly for this project of that.

Companies must show long term commitment; that they are willing to go in for the profitable urban based services as well as the less profitable rural based infrastructure.

Only a group made up of local players with the reach, the cash and the long-term view ought to be selected.
We believe such a team should be headed by the superannuation funds The money spent or earned gets to remain in-country.

OP/ED