With more than 10,000 customers in the country's second largest city, a total of 3208 were disconnected because of non-payment of bills, The National newspaper reported.
Manager customer services Herman Kagl told The National reporter Erebiri Zurenuoc that 85%, or perhaps more of the 3208 customers, had illegal water connections running for the past five or six years.
Separately, the Lae Chamber of Commerce and Industry reports that Water PNG Lae has advised that the city would be subject to water rationing on Tuesday "due to water inflow problems with the water bores at Taraka.
"There will be a two-hourly water rationing exercise where some zones would be turned off for two hours, zone by zone. The exercise is necessary to ensure everyone does not go without water for the whole day and also to assist us maintain system pressure in the city," Water PNG said.
Normal services were expected by today.
Kagl said that parts of the city the most illegal water connections were Kapiak Street area in 1-Mile and West Taraka.
"For Kapiak Street and surrounding residents, only five houses are genuine customers, while for West Taraka, of the 277 customers, 56 are genuine customers. The rest use illegal means to get water from Water PNG.
"There are many parts of the city where people are getting water without making any payments or any attempts to make payments."
Spot fines for illegal connections were K2000 for homes and K10,000 for institutions and business houses.