Acting PM challenges SOEs to redouble efforts

Edited Keynote Address by Acting Prime Minister Hon. Sam Abal at the State Owned Enterprises Consultation on National Plans and Vision 2050, held in Port Moresby on June 29, 2011.

 

I understand the Minister of Public Enterprises Hon Arthur Somare will make it abundantly clear a lot of progress has been made in recent years by State Owned Enterprises (SOEs).

Today I have a special request that SOEs redouble your efforts to lift performance and service delivery levels even further.

We have to redouble our efforts to minimise power disruptions in Port Moresby and other urban centres. This may not be an easy task because we also need to simultaneously bring electricity to more people throughout the country.

I understand that despite the significant progress made in recent years, much of our infrastructure is still some three decades old. Rehabilitation can take many years and PNG Power has greatly energised its efforts to expand provision of electricity in rural areas, where the supply logistics are challenging.

In this way all of us – National Governments Departments, Provincial Governments, SOEs and Commodity Boards – will not work in isolation. We will pull together with our plans detailing with each other and resulting in improved service delivery outcomes and contributing to higher living standards.

There must also be synergies between SOEs, where you can cooperate and work together to achieve better outcomes for your operations as well as for the nation.

When the Somare Government took office in 2002, it abandoned the privatisation program instead wanted to reenergise the SOEs and make them more transparent and accountable and to create preparedness for a more open economic environment.

We know that an open economy and free competition is good for everyone.

It encourages greater efficiency, higher productivity and more affordable products and services. Competition has to be embraced for better future outcomes.

In a country such as ours we need well performing SOEs – one of the essential engine rooms of economic growth; SOEs need to be competitive while keeping an eye on the provision of services even where this may be uneconomic under current circumstances and for years to come. This is something we cannot expect from companies purely motivated by profits.

At the same time such demands on SOEs should not become such a burden that they are unable to operate efficiently. SOEs must maintain a capacity to reinvest in new technology and essential rehabilitation.

I am pleased to learn that Minister Somare and the Department of Public Enterprises is making a concerted effort to develop an over-arching policy in support of Community Service Obligations.

When government subsidies are provided in for power or water supplies into remote and difficult locations – this could also apply to aviation services – I would hope that SOEs can compete with the private sector to deliver the best possible outcomes.

With corporatisation of SOEs such as Air Niugini, PNG Ports, PNG Power and others, these organisations have refined their reporting structures and placed on improved financial footing with strongly growing revenues and significant profit levels. Most have become more capable of taking on private sector competition.

I think you can do it. I have seen some countries like Singapore where services by government are as efficient as any private enterprise. It can be done.

The government has also adopted a policy of encouraging Public-Private

Partnerships as a way of injecting much needed capital, entrepreneurship and technology in new ventures where SOE’s can work together with private corporations.