News & Media

Further substantial progress on SOE reform

Sunday 26th January, 2020: 

Kumul Consolidated Holdings Ltd has begun 2020 with further substantial progress on the reform of State Owned Enterprises, acting managing director Parkop Kurua said today.

“Several elements of the reform agenda were implemented this month following a period of analysis and review during the latter part of 2019,” he said.

“These included the establishment of a dedicated Reform Unit within KCH, and the development and adoption by board and management of a reform roadmap, which outlines the reform measures to be implemented.

“KCH is now in a position to begin implementing the most urgent and important parts of the reform agenda. 2020 will be an extremely busy year for KCH.”

Mr Kurua said a reorganisation and strengthening of the company’s management structure was nearing completion to support the Marape Government’s ambitious and complex SOE reforms.

At the same time, the restructure of executive management teams within SOEs is nearing completion. SOE boards are being renewed as directors’ terms expire, and new appointments will be announced soon.

Management restructuring together with deeper stakeholder engagement will put KCH in a stronger position to implement reforms. The company has already begun working more closely with its constituent SOEs to ensure that urgent and appropriate action is taken.

“This includes a particular focus on consolidation and corporate restructuring of Kumul Telikom Holdings, PNG Power and Water PNG as some of the most significant entities with a key role in basic service delivery,” Mr Kurua said.

“These entities have previously operated with relatively limited oversight, which has contributed to the difficulties they face.”

A key element of the reform is ensuring SOEs can leverage international best practice to drive operational efficiencies and improve service delivery. This model has been highly successful in the port sector, with PNG Ports amongst the best performing of all SOEs.

A strategic advisory firm, Gravelroad Consulting Australia, was recently appointed by KCH to assist with the project management unit. Kumul Telikom Holdings has entered into a strategic partnership with Detecon International, the consulting arm of Deutsche Telekom, Europe’s largest and most profitable mobile operator.

Mr Kurua said KCH is exploring options for similar arrangements in the energy, water and aviation sectors.

The Ministry of State Enterprise under Minister Sasindran Muthuvel has played a key role in securing the budget support from the Asian Development Bank and the Australian Government that underpins the Marape Government’s reforms. Progressive funding payments are directly tied to the successful achievement of the reforms approved by National Executive Council.

Mr Kurua was pleased by the progress made during January to deliver on the reform agenda. “But we must recognise that the reforms necessary to restore quality service delivery to our people are likely to take several years,” he said.

“Therefore it is imperative that KCH and its SOEs work together with a real sense of urgency, and a recognition of the national importance of the work we are undertaking.

“With our new board and executive, KCH is now in a strong position to return itself and its SOEs to stability, efficiency and sustainability. Our reforms will transform our ability to once again deliver quality services to the nation. I am excited by the opportunities before us during 2020.”

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