Cash flow issue ‘real’

By PETER ESILA

PNG Chamber of Commerce and Industry (PNGCCI) president Ian Tarutia says it is no secret that cash flow issues are affecting businesses particularly those that deal with the Government.
“PNGCCI and our provincial chambers can cite numerous examples of businesses, SMEs, our members, who have been forced to wind down or close operations because of uncollected funds from debtors (mainly government) and demands from creditors like suppliers and banks chasing up loan repayments,” Tarutia said.
“We acknowledge the comments by Andrew Pini, a respected and professional liquidator of companies in PNG applying for voluntary liquidation. We are not surprised. It is a reflection of the environment our businesses face today.”
Pini, who is the principal of Pini Accountants and Advisors, said 90 companies from last year to date were facing serious cash flow issues and moves have been made to wind them down.
He said as a liquidator, this was a worrying sign.
Tarutia, on the other hand acknowledged the comments by big businesses on the current state of the economy.
“Few CEOs have commented on the state of the economy and its impact on their business. This also includes the impacts of Black Wednesday (Jan 10).
“It is no secret businesses that have done work for Government are suffering due to slow payments for goods and services rendered or not paid at all.
“Credit facilities with suppliers have been withdrawn and transactions are now cash on delivery basis in most instances.
“And if businesses have no cash, they’re unable to transact and daily economic activity comes to halt,” Tarutia said.