Pruaitch expects more from SOEs

Business

Patrick Pruaitch says State-owned enterprises (SOEs) should be giving enough returns to the Government, relative to the government investment in them, most of which comes from borrowing.
He said this yesterday in Port Moresby during the launching of the Asian Development Bank report on the financial performances of SOEs in the Pacific.
The report concluded that in the eight Pacific countries, including PNG, examined, the SOEs contributed only 1.8 per cent to 12 per cent to Gross Domestic Product. This is despite a very large asset bases, ongoing government cash transfers, and monopoly market positions.
According to the report, Papua New Guinea’s SOE portfolio generated an average return on equity – profit as a percentage of equity investment – of just 2.4 per cent from 2010 to 2014.
Laure Darcy, one of the two authors of the report, said it was a concern that the Government should take into consideration.
Pruaitch said he expected more from the SOEs.
“Laura (Darcy) did indicate that investment is increasing but performance is lying flat. It appears that as a government, we are borrowing so much to fund the SOE, but at the same time we need a dividend policy in this regard,” Pruaitch said.
He said the Government wanted to see SOEs perform to its expectations.

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