PNG Government owned enterprises performed poorly : ADB
ECONOMIST Paul Barker, says a review by the Asian Development Bank reveals that the country’s State-owned enterprises performed poorly by international and regional standards in terms of returns on capital.
Barker, the executive director of Institute of National Affairs, said the trouble was that most of the SOEs were badly under-capitalised from the start.
“And in many cases, (they were) weakly managed, particularly following years of cronyism in board and sometime management appointments, with the premature loss of many key professional and technical staff,” he said.
“Many have operated as monopolies, able to make strong returns (at the expense of customers) based on their market control.
“But they were often little prepared when facing any level of competition from newer and nimbler new players entering their fields of finance, telecommunications, aviation etc.
“Some still largely, or partly, retain their monopolies, such as Eda Ranu and Water PNG, PNG Power (despite more independent power providers to PNG Power) and PNG Ports, and to a less extent Telikom with its international gateway, and Air Niugini on certain routes.”
Barker said some SOEs were struggling to invest and provide their core functions, such as the major utilities like power, water and sanitation.
“Although there is much room for improved management and performance of SOEs, many of the core utilities and infrastructure providers, need major capital and investment to upgrade their service to meet, for example, power needs, in main centres such as Lae and extend power and water to other centres currently unserved.”
The National / ONE PNG