KCH: SOEs also deliver services to people

By PETER ESILA

STATE-owned enterprises (SOEs) are not only investing in projects to be commercially viable but also to deliver services to the people of Papua New Guinea.
Kumul Consolidated Holdings (KCH) chief operating officer Gary Seddon told The National yesterday that the objectives of SOEs were to be competent, affordable, accessible and reliable delivery of services to people of PNG and to return a dividend or a return on investment which was an indication of profitability.
“Profitability like in any company, whether it is state owned and private enterprises driven by decisions made by management, that encourages revenue growth, over and above the expenses made,” he said.
“The more revenue or sales that are generated to cover the cost and expenses of delivering services, cost of employing people, rent; as long as the revenue is higher, then the businesses will return a profit.
“The profit can be reinvested, in the growth of those businesses, or they can be paid to the state in the form of dividends.
“So are these SOEs viable? Absolutely, but do some of them have challenges? Absolutely.
“They have challenges because of a number of features, the economic conditions of the region, competition in the market and so on.
“There are a number of factors in them, these SOEs have to deal with those challenges, but that is what they are focused on presently, and this is nothing new, it is an ongoing aspect of doing business in Papua New Guinea and the utilities and the SOEs are different.”
As a trustee, KCH is the holding company for nine SOEs operating in agriculture, aviation, banking and financial services, insurance, maritime infrastructure, power, post and logistics, telecommunications, and water and sanitation.
KCH also acts as the manager of infrastructure projects throughout PNG such as hydroelectric power facilities, metropolitan sewerage systems property and port developments.
KCH is PNG’s flagship trustee working with the SOEs to improve the national landscape for potential investment.
Investment is vital for any economy, with direct links to growth, increased exports, higher employment rates, improvements within communities and the overall sustainability and diversity of the economy.
In 2018, KCH had a profit of K142 million, SOE consolidated losses were K129 million while the overall consolidated profit was K12.3 million.