SPIN doctors for Public Enterprise Minister Ben Micah and the board and management of Papua New Guinea’s national postal service have gained editorial coverage in PNG’s media to sugar-coat a bad-news situation.
According to media reports quoting the Minister, Post PNG has recently been forced into a receivership situation and needed rescuing with its overseer, the Independent Public Business Corporation, agreeing to provide K40 million in rescue funds.
Soon afterward the organisation launched a new unit, PNG Logistics, supposedly an outfit that would generate new revenues and help revitalise the operations of Post PNG.
For longer term observers, there will be a sense of ‘we knew it’.
Many had felt just over a year ago that PNG Post could be among the first state owned enterprises to face the threat of insolvency. The immoral sacking of former Post PNG chief executive Peter Maiden was viewed as a precursor to insolvency as the high standards he maintained over the previous decade were eroded almost overnight.
Maiden was forced to step aside on grounds of alleged mismanagement with a promise that a full inquiry would help ascertain the truth. At the time of Maiden’s departure earlier this year, no inquiry had been held and Maiden was never told what charges he was facing.
If truth be known, it was all a big lie. Micah and the Post PNG board were incapable of laying any charges because, delve as they might, no wrongdoing could be found. There had been vague allegations that the mismanagement involved sale of Post PNG assets but, unfortunately for Micah and his men, all major asset sales had the support of the Post PNG board, and where required, the additional approval of the IPBC board and management.
It was Maiden who had taken Post PNG out of interim liquidation in 2001-02 and then managed a financial and operational turnaround that made the organisation, a minnow among the SOEs, arguably the biggest success story among PNG’s SOEs.
The PNG government’s auditor general on several occasions complimented Maiden and Post PNG for on-time submission of comprehensive, audited annual accounts.
The Post PNG turnaround, according to financial data released in 2011, meant that national government equity, or shareholder equity in the organisation, had gone from a negative K10.1 million in 2001 to around K100 million at the time Maiden was suspended from office.
Maiden opened many new post offices around the country and made it the most representative national government operation with postal services available in 72 of PNG’s 89 districts.
Post PNG’s Salim Moni Quik, a telegraphic money order service that Maiden subsequently transformed into a pioneering mobile SMK service, had by 2009 become a highly effective agency in helping to redistribute wealth generated in prime urban and rural areas. In that year alone, SMK transmitted some K160 million to people throughout the country, mostly in small amounts of around K300 each time.
Such success in PNG is a rarity in the public sector. As part of Maiden’s cultural transformation initiatives staff turnover remained important with termination of staff involved in impropriety. Disaffected former employees managed to get PNG tax authorities to thoroughly investigate Maiden before privately clearing him.
Thus it was not surprising that when Micah and the Post PNG board decided to suspend Maiden, many feared the rot would soon set in, as confirmed by spin doctors who tried it make it look that the K40 million cash injection by IPBC was generally a good thing.
Nevertheless, Micah was reported by the Post Courier newspaper as saying: “There will be no more free handouts to Post PNG after this rescue package.”
Post PNG is not the only SOE that has seen a sharp deterioration in its financial performance since Micah became Public Enterprise Minister in 2012.
At PNG Power, former CEO Tony Koiri turned around the previously virtually insolvent organisation … in Koiri’s case he chose to virtually give 24-hours notice of his resignation and, within a year of his departure, PNG Power, according to various media reports, had gone from a K50 million profit situation to a loss almost as large – and the need to borrow emergency funds for staff salaries.
Another SOE, Eda Ranu, which supplies treated water to Port Moresby residents and businesses, a consistently good performer over many years, is also understood to have recently experienced a severe deterioration in its balance sheet.
The government that Micah represents is by far the biggest spending government in PNG’s modern history yet the financial performance of many of its SOEs is in a state of disarray.
This article was kindly provided by www.pngindustrynews.net