STATE Enterprises Minister Sasindran Muthuvel, pictured, says he is making immediate moves to address the financial situation faced by the government entities.
Some of these measures include:
- appointment of board directors and management with relevant skills and experience and emphasis on merit-based appointments;
- board and management performance framework, including set targets and key performance indicators (KPIs);
- restructuring of state-owned enterprises (SoEs) for effective management;
- investigating options to reduce commercial loan exposure;
- a targeted focus on reducing operational costs across all SoEs;
- sale of non-performing and non-core assets;
- partial privatisation (public-private partnerships) of certain businesses;
- emphasis a clear dividend policy (percentage on net profits);
- review of existing and new proposals to ensure the business had sound investment indicators (e.g. positive net present value, return on investment); and,
- Emphasis on competitive procurement on open tender in the market place.
In a statement yesterday, Muthuvel said: “As I have said during the release of the information on the status of SOEs, the Government is gravely concerned about the serious financial challenges faced by certain SOEs”.
“We are determined to turn this around. It is foremost on our Government’s agenda. Let me be forthright by saying that the road to recovery will be difficult, but not impossible and I remain optimistic,” he said.
“We will stop political interference, we will plug the leakages, we will be appointing qualified, credible people to the boards and into senior management with merit-based appointments and we will adopt sound private business and investment principles with selecting new projects.
“State-owned enterprises must be totally functional as commercially-viable businesses that can sustain their operations on their own balance sheets. They must never place themselves in situations where they should be rescued by the Department of Treasury or struggle to declare dividends to the Government.
“The significance of our state enterprises as main revenue drivers for the country can never be overstated and should never be undermined again with such blatant disregard,” Muthuvel said.
He earlier made an announcement on the position of Kumul Consolidated Holdings, revealing a consolidated loss of K147million against a K205 million budgeted profit in 2018 and debt position of K6 billion as of March this year.