PNG's State-owned entities valued at K20b

Papua New Guinea's  Minister for Public Enterprise and State Investment Ben Micah says, State-owned entities under the Kumul Consolidated Holdings is more than K20 billion. 

He said it was valued at K5 billion in 2012.

Micah said the entities’ contributions to the expansion of the Gross Domestic Product increased from 31 per cent in 2012 to 42 per cent in 2013. 

It was more than 50 per cent last year and is expected to exceed 60 per cent this year.

Micah said the 13 entities had investments.

“Excluding NPCP and DataCO, their combined total fixed asset in the economy is around 15 per cent but they contribute only 1.9 per cent to the GDP. 

“For almost a decade, the shareholder returns were moderate. Average return on equity is around 10 per cent and return on assets average below 7 per cent,” Micah said.

“The return on equity is respectable but the return on assets is comparatively lower indicating that management is not gainfully using their assets. Total revenue rose from K395m  to over K2b in the same period, but this comes with increasing cost resulting in the profit margins reaming flat over the decade. 

“These marginal profits indicate operational inefficiencies.”

Micah said the Government’s focus had been in addressing the failing state of the entities and to bring in reform.