State Owned Enterprises In Samoa Slated For Privatization

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Post Office, Housing Corp., Public Trust, Ag. Store being assessed

By Taina Kami Enoka

APIA, Samoa (Samoa Observer, May 8, 2015) – Four State Owned Enterprises (S.O.E) are up for privatisation.

Although the plan was confirmed by the Minister of Public Enterprises, Lautafi Selafi Purcell,he could not say when.

The S.O.Es affected include the Samoa Post Office, Samoa Housing Corporation, Public Trust and the Agriculture Store Corporation.

"We’ve got to go through the whole process," said Lautafi.

He said this is part of the Government reforms to privatise, merge or outsource work.

There are 16 public trading bodies (S.O.E’s), then there are beneficial bodies who provide a service but also safeguard assets, minimize costs and generate funding themselves.

Then there are mutual societies like N.P.F, S.L.A.C and A.C.C for the mutual benefit of people.

The public trading bodies are the main focus, as they are required pay a dividend back to Government every year.

To date, Lautafi said, a few them have not been able to pay such dividends due to a tight cash flow.

Some are operating on loans guaranteed by Government.

"I think the idea of the S.O.E.’s was a good idea but I don’t think many of them were ready to stand alone. The idea of operating like a successful business for a government entity is new".

Some of them have been quite successful because of the line of businesses that they are in. Some have struggled to make a profit.

This is why the Ministry of Public Enterprises was created to try and look at ways to identify the weaknesses in the process of becoming a successful business.

"We’re being quite stringent now with monitoring and getting financial reports from these S.O.E.’s and trying to see why they’re not successfully operating as a business.

"It’s looking into why they can’t generate enough funds for the operation and also give money back to Government".

"Some have continually been doing that and some have even exceeded that but there are some that are struggling to [reach] the threshold".

Lautafi said a Chief Executive Officer of the Ministry of Public Enterprises would be appointed within the month. The idea is to get the monetary unit that is currently under the Ministry of Finance and then monitor the S.O.E.s.

"My responsibility will be to ensure that we really scrutinize why they’re not performing and what we can do to ensure they perform".

Board membership renewed in June Most Boards that were elected in 2012 are up for review this month.

Lautafi wants to make sure that the Boards are effective and have the right people making the right decisions.

In doing so, for the first time ever, Board members will undergo an assessment process later this month.

Cabinet has approved assessment forms where the Boards will evaluate themselves, asses each Board member and asses the Chairman.

"If the Chairman says he’s doing okay and the Board members are saying no, he’s not okay, then we can look at how we can help that".

The positions will be advertised and current members can apply.

"But we try and make sure the process is effective... in getting the right people".

Board members will be trained at the Institute of Directors. And the Ministry will make sure they understand and are well versed on reading financial reports and quarterly reports, annual reports, corporate plans are provided on time.

"It’s all part of good governance and good accounting practices that we identify what’s not working and then we try and fix it. So hopefully within the next few months we’ll be on top of the issue of non-productive SOEs".

Apart from Boards such as those with the Electric Power Corporation (E.P.C) and National Health Services (N.H.S), that require the skills of the C.E.O, others are operating independent of Government.

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