The Asian Development Bank (ADB) had recommended that the government consider winding up its General Business Trust (GBT) and reconstitute Independent Public Business Corporation (IPBC) as a company that owns state-owned enterprises (SOEs), The National reports.
The ADB, in its Finding Balance: Benchmarking the Performance of State-Owned Enterprises in Papua New Guinea released last Thursday, said the analysis undertaken through this study showed that the trust structure added no benefit to the effective control and oversight of PNG SOEs, nor did it enhance their commercial status.
“What it has done is add another level of legal and operational complexity that has assisted in shrouding what is actually happening with and within the SOE portfolio,” the report says.
“Incorporating IPBC under the Companies Act would give it the same legal status as that of eight of the nine SOEs in its portfolio, and would simplify reporting and accountability mechanisms.”
The report noted the PNG government has made remarkable progress in strengthening the framework for SOEs over the last 12 months.
· Restructuring of all of the boards of the SOEs;
· First-ever publication of the accounts and annual plan of the IPBC;
· First-ever preparation of annual plans for all of the SOEs; and
· Preparation of amendments to the IPBC Act to strengthen the accountability mechanisms of the SOEs.
“More remains to be done to complete the framework, including the development of dividend policy guidelines for the delivery of community service obligations (CSOs) by SOEs, and a public-private partnership policy; increased transparency of SOE performance; and strengthened governance and implementation of an on-lending policy,” the report says.
“Taken together, these reforms will allow the SOEs to operate as commercial entities, improve service delivery, and be held accountable for results.”
To add to this, IPBC’s business plan for 2012 list the organisation’s priority areas for the next decade and includes the following initiatives:
· Ensure compliance with the planning and reporting requirements contained in the IPBC Act;
· Establish stronger links with the Independent Consumer Competition Commission (ICCC) in defining and enforcing service standards and financial performance outcomes for SOEs;
· Publicly report on SOE service standard outcomes and financial performance;
· Review and report on opportunities for greater private sector involvement through mechanisms such as independent power producers, PPPs (public private partnerships), and possible divestment of shares in SOEs; and
· Contribute to the finalisation of the CSO, dividend, and onlending policies for government consideration, in consultation with the treasury.