Superfunds to get notice of sale
By HELEN TARAWA
THE Government has promised the Superfunds that they will be given the first opportunity to buy the non-core assets of State-owned enterprises (SOEs) to be sold.
Minister for State Enterprise Sasindran Muthuvel told Parliament yesterday that the SOEs were in trouble, with the telecommunication business alone projected to record a K75 million loss this year.
“Instead of losing money on a monthly or yearly basis, we could bring in credible industry partners such as the superfunds, if there is an opportunity that we can generate income by bringing in quality board members even if we reduce our stake-holding to below 50 percent,” he said.
“We want to do the follow-up process transparently and making the opportunity available to the superfunds.
“If we sell, they have the first opportunity to get equity in those businesses.
“That’s a government policy – to keep everything below 51 percent.”
He said the SOEs were in trouble “but not serious trouble.”
Muthuvel was responding to questions from Yangoru-Saussia MP Richard Maru on whether there was a policy on the sale of State-owned assets.
Muthuvel dismissed claims that Telikom would be sold saying there were billions of kina in loans under the name of the telecommunication business.
He said the former regime had borrowed more than K1.5 billion to establish some infrastructure assets.
“These are the challenges we are facing in terms of commercialising those assets, such as K920mil (US$270mil) worth of loan for our domestic cables and another K800mil (US$200mil) for 200 towers,” he said.
“We only have 580 towers and 5 per cent of the market.
“The other 95 per cent is with another private company. For us to be competitive, we need to have a minimum of 750 towers.”
11 comments
So the K1. 5 billion kina borrowed, was it fully used, where and for what other purposes?
Because of the success of superfunds like Nasfund and Nambawan Super, the government is trying to lure them to invest there. I for one disagree, as not once did any of these SOE entities come out clear declaring a profit. It is always the government that is continually counter funding these SOE’s every year. Just a waste of tax payers money where these monies can be used in other areas like law & order, health, education, roads etc.
Also as long as we have government cronies running these SOE entities, how do we expect to turn that SOE businesses into profit.
Mr Muthuwel your statement, “that we are facing challenges in terms of commercialising those assets”, is a very fair statement argued by Mr Maru. However, there should be a preliminary policy at the very first place on terms of the borrowing in terms of considering the risks & returns before securing K1.5 billion loan. If the controversy of selling telecommunication company & EMTV arises in such time, a superfund is already in place to support the SOEs before proceeding to sell them. Now that we have to sell 50% as debt financing, these money would be managed by the superfund to assists in procuring up to 750 towers to be competitive and I also agree on such policy. We cannot sell it to private companies to make them being the monopoly and then raising concerns on their mark-up prices.
Get Foreign Companies of Western Countries to invest and run the companies with Political interference or direct government holdings. Be careful of Asians because they are snakes..!
I surely agree with you.. soe’s are business own by government, and it ought to mark profit to sustain its own operations and paying dividend into the national budget. Year in and year out substantial amount of the money from the taxers are sypon into those so call soe which are runned by the politians and their cronies who often sucks everything there.
The question is; does those ceo who run those soes into bankruptcy held accountable for the cross mismanagement?
PNG is a cheap and safe place to steal and make yourself become rich at the expense of those poor marginalized population. God bless PNG and its endevours to be a black richest nation in the entire globe.
Everywhere I turn, STEALING is a common denominator. This country is run by people and scheme with the underlying agenda to steal.
Exorbitant amount of Money with lesser coverage area.
I think with that same amount of Money, private entities could have done much better with wider coverage of both network and market.
If Superfunds become the shareholders, members’ money needs to be injected directly to real capital investment in increasing number of towers, and providing high speed internet access and lower data and voice call charges to be up their with Digicel.
Investment should done alone on the capital expenditure and not salaries and wages.
The superfunds should not be blind in investing in those mosquito SOEs who are unprofitable but only there to suck up funds. Waste of contributors monies.
As a former SOE Director for 3 years this is my take.
SOEs are bloated with high operating costs.
Ageing infrastructure, high debt with banks and creditors, weak systems which is prone to leakages.
Absence of coherent business plan to sustain profitability.
This is the predicament of SOEs and Superfunds would have to know what they are getting into.
Other SOE’s can be sold but for Telecommunication it must not be sold under any circumstances, once sold our country’s security will be at great stack.
Superfunds are doing well so now they are being lured in to “invest”. I say NO. If superfunds invest, then what guarantee that superfunds will not inherit all the problems with it. Another way to open doors for corrupt politicians. I for one do not want my savings to be invested in these failed SOEs. Sell them to other private investors. Superfunds are doing just fine with current portfolios.
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