K600 million budgeted to support SOEs

By PETER ESILA
PRIME Minister James Marape says K600 million has been budgeted to support State-owned enterprises (SOE) this year and the Government is committed to supporting them to be profitable and deliver services.
He said in Port Moresby yesterday alongside State Enterprises Minister William Duma when receiving a first dividend 2023 payment from Kumul Minerals Holdings Ltd of K72.125 million.
The Prime Minister, as the trustee shareholder, said the K72 million would go towards budget support.
“This is part of our Government budget support, that includes SOEs too,” he said.
“We have money in the budget to support SOEs, sector support is there, in the last two years, we have stepped up our support for SOEs like never before, what is earmarked for the budget comes into the budget and then we earmark across the expenditures that we have budgeted for including SOE support.
“In the next three or four years, there will be a ramp up in support towards SOEs allocation in terms of rehabilitation, restoration, that 60 per cent comes in as part of the contribution towards the budget and budget support.”
Duma confirmed that K600 million had been budgeted for SOE support starting with the K211 million for PNG Power.
According to the Finding Balance 2023: Benchmarking performance and building climate resilience in Pacific State-owned Enterprises, as portfolio deteriorated from 2015 to 2020, SOEs took on an unsustainable amount of new debt.
“An estimated K4.3 billion in new projects were approved, generating an additional K3.2 billion in debt, 44 per cent of which was taken on directly by the SOEs at commercial rates,” the report said.
“At the end of Dec 2020, SOE (including Kumul Consolidated Holdings Ltd) interest-bearing debt totaled K5.15 billion, of which K1.85 billion was owed to commercial lenders and K3.65 billion to concessional lenders via Treasury.