NEC should take a step back, says ADB


THE National Executive Council (NEC) should reduce its control of State-owned enterprises (SOE) in order for those entities to better carry out their corporate roles, says the Asian Development Bank (ADB).
This would be through reforms that give Kumul Consolidated Holdings more independence, said ADB Pacific private sector development initiative (ADB PSDI) SOE reform team leader Laure Darcy.
“The Independent Public Business Corporation (Kumul Consolidated Holdings) (Amendment) Act 2015 could be strengthened to help establish such a governance framework,” she told The National.
“Key reforms would include transferring the current oversight responsibilities over the SOEs from the NEC to a commercial holding company, such as Kumul Consolidated Holdings, with the power to protect the Government’s investment in the State-owned enterprises.
“KCH, in turn, would then grant its SOEs the autonomy they require to achieve their agreed commercial targets.
“Other structures could also be considered, as long as they create similar autonomy and accountability.”
Darcy said international experience had proven that best-performing State-owned enterprises were those that were given autonomy to operate as commercial entities.
They were held accountable for commercial results.