Papua New Guinea
Worry #2: Making Good Of State -Owned Businesses
Heading the privatisation route
State-owned businesses in Papua New Guinea have been grossly mismanaged, corrupted and heavily politicised by a small number of elite Papua New Guineans. This has resulted in them becoming continuously unprofitable and a burden to government over the years.
This is also why the government has decided to sell them off through a privatisation programme.
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At least seven of these businesses have so far been identified and are being prepared for privatisation. These include the:
Prime Minister Sir Mekere Morauta said the businesses provide services that are essential for Papua New Guinea's development. But the trouble is that the services have not been provided to many people, yet they cost the government a lot of money that should be used for other developments.
"The problems all come back to the awful reality that government-owned businesses have been badly managed."
"When politicians are responsible for a business that they do not understand, and which they do not care very much for, they sometimes appoint their friends as chairpersons and directors on lucrative contracts. The chairpersons in turn appoint their friends as executives," Morauta said. He said another minister does the same and the ones that have been replaced want to get paid their contracts, even if they were not doing their jobs.
"Paying people for jobs not done costs a lot of money. These things are going to court because the government is not willing to pay out millions of kina to someone for not doing his job," Morauta said.
At least all of the seven businesses identified for privatisation have experienced such practices.
"These are the reasons why Post PNG now carries only about 10 million pieces of mail a year. Letters don¹t arrive on time and sometimes don't arrive at all. Many people have given up using the service."
"These are the reasons why electricity blackouts are so often. These are the reasons why Elcom has over 400 million kina in debt, and no money to repair the generation equipment that is needed to keep the existing poor services going."
"These are the reasons why Papua New Guinea Banking Corporation made a loss of 36 million kina in 2000 when it spent I44 kina for every kina earned. These are the reasons why there has been very little extension of electricity and telephone services to the great majority of people for many years," Morauta said.
The Privatisation Commission will be the watchdog for the sale of assets. Its members, with the highest reputation for integrity, are drawn from many institutions In terms of the sale of shares, Papua New Guineans would be given the chance to buy shares in the businesses. The government has ensured that there would be no way for wealthy or politically influential Papua Guineans to buy assets at artificially low prices.
A broad-based of Papua New Guinean ownership will be possible through the People's Trust, which will be managed by people who know how to do the job well, and away from political influence.
The Privati-sation Commis-sion has so far undertaken a great deal of careful and excellent work on the trust, which will be established soon.
Once the businesses are privatised, the government will introduce regulatory measures to prevent businesses from using their monopoly power against the people.
The government has also assured that community services will be maintained and extended after privatisation.
Regarding the future of workers employed by businesses earmarked for privatisation, the government has indicated that proper redundancy payments will be made out to workers who are to be retrenched. Retraining programmes are also being developed.
Part of equity in major businesses will be put aside for the benefit of employees.
