ADB Public Enterprise Benchmarking Study

Speech by Mr Thomas Abe, Managing Director of the Independent Public Business Corporation of Papua New Guinea at the launch of the Asian Development Bank’s report titled “FINDING BALANCE: Benchmarking the Performance of State-Owned Enterprises in Papua New Guinea”  (Port Moresby, September 13 2012 /  
20120912 SP-MD ADB Benchmarking Study)

Ladies and gentlemen, let me thank the Asian Development Bank for producing this important benchmarking study, at
IPBC’s request.

It will be a helpful contribution to the work we do – I assure you that we will be using it as one of our guides for the reform
of Papua New Guinea’s Public Enterprises.

I would like to think that our extensive support for and participation in the study has in turn helped ADB develop a better
understanding of the circumstances and issues that we are confronted with.

The need for such benchmarking became clear to me in my previous role as the regulator and in particular my four
years’ chairmanship of the East Asia and Pacific Infrastructure Regulatory Forum.

One of the first things I did on being appointed Managing Director of IPBC in August last year was to request that this
independent review proceed.

So it gives me great satisfaction to see it completed.
IPBC is at the forefront of reform of state-owned enterprises here, reform that has gathered momentum in the past 12
months and is just now starting to bear fruit.

One of the critical elements of IPBC’s work is measuring our performance and the performance of Public Enterprises
against the highest standards possible.

I personally am very strong on setting performance standards – and meeting them.
When I was appointed Managing Director 12 months ago, IPBC lacked direction and its systems and processes were in
disarray.

Its ability to assist and support Public Enterprises – and manage and protect the interests of their owners, the people of
Papua New Guinea – was severely limited.

One of the first things I did was to insist on corporation-wide Key Result Areas and Key Performance Indicators and the
development of a formal Annual Plan and Budget.

We have also decided to produce half-year reports. Our first half-year report has been completed and presented to the
Minister, and we are close to finishing our first five-year Corporate Plan.

In addition, IPBC recently developed a set of Key Performance Indicators that we apply to all our Public Enterprises.
The fundamental aim of this is to instill commercial discipline in Public Enterprises to ensure that they are operating
efficiently and not wasting or risking taxpayers’ funds.

IPBC is focused on commercial efficiency through quarterly measurement of financial and operating results such as
sales growth versus nominal GDP, sales against costs and capex program spending compared to profitability.

IPBC does not require Public Enterprises to provide us with such data for the sake of it: it shows basic weaknesses in
Public Enterprise performance and provides us with a guide to appropriate solutions.

The requirement is nothing more than would be expected of public companies anywhere else in the world.
The owners of Public Enterprises – the people of Papua New Guinea – are entitled to nothing less.

Other requirements that Public Enterprises must meet include the determinants of financial and operating performance
under four broad categories:

Ladies and gentlemen, let me thank the Asian Development Bank for producing this important benchmarking study, at
IPBC’s request.

It will be a helpful contribution to the work we do – I assure you that we will be using it as one of our guides for the reform
of Papua New Guinea’s Public Enterprises.

I would like to think that our extensive support for and participation in the study has in turn helped ADB develop a better
understanding of the circumstances and issues that we are confronted with.

The need for such benchmarking became clear to me in my previous role as the regulator and in particular my four
years’ chairmanship of the East Asia and Pacific Infrastructure Regulatory Forum.

One of the first things I did on being appointed Managing Director of IPBC in August last year was to request that this
independent review proceed.

So it gives me great satisfaction to see it completed.
IPBC is at the forefront of reform of state-owned enterprises here, reform that has gathered momentum in the past 12
months and is just now starting to bear fruit.

One of the critical elements of IPBC’s work is measuring our performance and the performance of Public Enterprises
against the highest standards possible.

I personally am very strong on setting performance standards – and meeting them.
When I was appointed Managing Director 12 months ago, IPBC lacked direction and its systems and processes were in
disarray.

Its ability to assist and support Public Enterprises – and manage and protect the interests of their owners, the people of
Papua New Guinea – was severely limited.

One of the first things I did was to insist on corporation-wide Key Result Areas and Key Performance Indicators and the
development of a formal Annual Plan and Budget.

We have also decided to produce half-year reports. Our first half-year report has been completed and presented to the
Minister, and we are close to finishing our first five-year Corporate Plan.

In addition, IPBC recently developed a set of Key Performance Indicators that we apply to all our Public Enterprises.
The fundamental aim of this is to instill commercial discipline in Public Enterprises to ensure that they are operating
efficiently and not wasting or risking taxpayers’ funds.

IPBC is focused on commercial efficiency through quarterly measurement of financial and operating results such as
sales growth versus nominal GDP, sales against costs and capex program spending compared to profitability.

IPBC does not require Public Enterprises to provide us with such data for the sake of it: it shows basic weaknesses in
Public Enterprise performance and provides us with a guide to appropriate solutions.

The requirement is nothing more than would be expected of public companies anywhere else in the world.
The owners of Public Enterprises – the people of Papua New Guinea – are entitled to nothing less.

ENDS

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