PPL doing well as an SOE

Edited Statement by Public Enterprises Minister Hon. Arthur Somare, at the SOE Consultation on National Plans and Vision 2050, held in Port Moresby on June 29, 2011


In my role as Minister for Public Enterprises and through the IPBC, we have established a system where the operations of the eleven SOEs can be monitored and longer term planning and implementation takes place.

By their nature, SOEs are high profile organisations that face wide ranging challenges.

Most are judged by the public on a day to day basis. Ongoing performance is of vital importance as a window to the provision of essential public services.

Just over a decade ago, SOEs were a reflection of the struggles faced by the wider economy, as most of you would know. PNG Post faced interim liquidation and PNG Power was insolvent. Since then, the financial status of all SOEs has been significantly transformed.

Today, I am glad to say that all have healthy balance sheets. Hopefully a good set of accounts are also a precursor to well streamlined operations, better provision of public services and improving relations with the private sector and wider community.

Clearly, the day to day operations of SOEs are of great significance. On any day, thousands of people in various towns may be purchasing units for Easipay. On any working day at our extensive Post Office branch network of about 1,200 people will be dispatching money through Post PNG’s Salim Moni Kwik service. This is the face of government at work in towns and in rural areas.

As I mentioned at the outset, we are here for a common purpose. This is about ‘Team PNG’. We are part of a joint endeavour to provide a brighter future for the people of this country. For too long many people have not been able to enter the mainstream of development; poverty is a daily reality for too many people.

Clearly, that is changing. If we work together in a coherent and cohesive manner, more will be achieved and in a shorter time frame.

Looking ahead, the advent of revenues from the PNG LNG Project in 2014 will provide an opportunity for the SOEs to make dramatic advances that will overshadow even the unprecedented growth of the past decade. That is the future each SOE must be committing itself to today.

It must be recognised that individual SOEs will have the capacity to undertake many projects of national significance.

If you choose to pursue Public-Private Partnerships, as envisaged under Vision 2050, or undertake projects in their own right, the Infrastructure Fund will have the capacity to provide equity finance just as the super funds have been doing in the recent past.

The challenge for SOEs as I see it is that they not only have to lift their performances in line with the broader advances being made by the economy, but they also have an active role to play in the wider community. Most of the SOEs represent a microcosm of this economy, having to operate in many remote locations where they have various installations and offices. Post PNG could have among the widest representation of any organization with postal outlets located in 70 of our 89 districts.

These services will be better funded and delivered through a policy on Community Service Obligations now being formulated with technical assistance from the Asian Development Bank.

As a result of the progress made in the past decade some of our SOEs are financial powerhouses in their own right. In that period PNG Power, as an example, has gone from a position of being an insolvent company to one that is presently generating K500 million a year in annual revenue. Its ability to generate significant profits is an indicator to its potential capacity to drive future growth.

Let me conclude by saying that these are indeed exciting times. The SOEs have by and large put their own houses in order.

But we must not underestimate the challenges ahead.

PNG Power has done substantial work in recent years in planning for rural electrification programs. We still have to recognize that its large revenue base is generated by providing power to only 12% of households. The challenge of raising that figure to 70% will require huge amounts of planning and expenditure in the coming years.

The SOEs, and other bodies and arms of government need to pull together as one.

Not long ago the SOEs were seen as part of the problem. That’s no longer the case.

Now the SOEs are clearly a part of the solution. With the synergies of working closer together they will achieve much more.

I wish to stress that greater SOE cooperation and alignment, underscored by the “One Team PNG” focus will propel this nation to move ahead at a faster pace.