State Owned Enterprises not doing the business

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    In the absence of a resident editor on the island, we publish for your information and without comment, abstracts from the recent report of the Public Accounts Committee on the state of government owned businesses. Those of you who have been following the on-going stoush between the unofficial opposition and the government would know of the refusal of the Talagi Administration to submit the details of any budget, audited accounts or any information on SOEs for the perusal of the Assembly.

    Sensitive commercial information was often cited by the Administration as reasons for not releasing the information. Some three months after the formation of the new government, the call from the Assembly’s watch-dog on government spending, the Public Accounts Committee, is for all government owned businesses to be returned to the control of Cabinet. 

    Herewith, for your reading pleasure or displeasure, as the case may be, are extracts from the PAC Report:

    For the purpose of this report, it ought to be noted that whilst the State Owned Enterprises was operating without a Chief Executive Officer for several months of last year, and being no longer on island, [nevertheless] the SOE’s does have a three-member Board . . . one of the Directors was the Financial Secretary, who at the beginning of this year, 2020, became the CEO for the State Owned Enterprises. In addition, a decision has also been made for the Niue Power Corporation, Niue Civil and Niue Quarry to be returned to Government, no explanation provided. 

    In the CEO’s opening statement to the Committee, he highlighted that in his taking up of the CEO’s position early this year, it was evident that the operations and management of these Government owned businesses were not following proper government procedures and processes, and to date, a lot of effort has gone into working with staff to address the anomalies. Whilst this revelation was a concern, this was not entirely new as according to some members of the Committee, members of the general public have raised concerns regarding these anomalies or abnormal practices.     

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    There was much discussion, debate and questions with regards to the legislations governing Government businesses, reporting requirements and accounting to Government as Government “owned” businesses. The discussions [concluded] that whilst the rationale for conversion of government entities into fully commercialized business operations with the intention of these businesses generating revenues was good, the operations, management and “returns” or “benefits” to Government was unfortunately . . .  not evident. There needs to be some serious changes to the operations and management of these Government businesses if the Government is expecting some revenues . . . operating businesses without seeing revenues receipted in Treasury is a serious concern.       

    OVERALL POSITION […for the Bond Store, Vaiea Farm and Government Housing]

    The Committee in discussions was very concerned on the overall operations and management of the Government owned businesses under the management of the Niue Philatelic & Numismatic Company. 

    It was evident that whilst the intentions for the government trading entities, to be fully commercialized, [was] to operate as businesses, with the intention to generate revenue, the Committee wishes to register the following key points:

    1. That there was no proper process in the commercialization of the trading entities;

    2. That the Heads of these commercialized operations do not have the operational and managerial business skillset to manage the operations, as highlighted by the CEO;

    3. The issue of missing files and documentations, some presumed wet and damaged, important documents required for auditing purposes;

    4. That there was no recorded receipts of revenues in Government (Treasury) of revenues from these Government owned businesses, thus questions the “benefits” to Government from these businesses;

    5. That salaries of all staff of the trading entities placed under commercialization (NPNC) were increased, bonuses paid each year;

    6. That three of these business sectors, Niue Power Corporation, Niue Civil and Niue Quarry have been returned to Government without explanations provided;

    7. That Government now has to absorb costs of these entities being returned to Government, including having to deal with salaries issues;

    ***

    NIUE TELECOM

    There was understandably a lot of questions asked and some answers provided… However the Committee came back to the core business of Telecom Niue, a company wholly owned by the Government with the question, “How or who is benefiting from this Government owned business?”  There is no clear indication of any dividend payable or receipted by Treasury i.e. Niue Government, despite the significant financial investment . . . in Telecom Niue… 

    Recommendations:

    1. Provide costs and timeline for the completion and launching of the Manatua Cable and the ICT Fibre Optic Cable;

    2. Provide a complete Telecom Niue Ltd organizational structure;

    3. Provide an Assets Registry and Banking Accounts Details;

    4. Provide quarterly financial reports; 

    5. Provision of lease arrangement between Government and DTB company for Kaimiti land utilized by DTB;

    6. Retain the Alofi Office for Telecom Operations, being ideal and convenient for customers;

    7. Telecom Niue to be returned under the management of Niue Government.

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