Medium Term Development Plan, 2011-2015 - UNDP in Papua New ...
Medium Term Development Plan, 2011-2015 - UNDP in Papua New ...
Medium Term Development Plan, 2011-2015 - UNDP in Papua New ...
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undertaken <strong>in</strong>dependently of both <strong>in</strong>dustry and of the ICCC. The ICCC’s role <strong>in</strong> prosecut<strong>in</strong>g anti-competitive<br />
behaviour often puts ICCC <strong>in</strong> legal conflict with bus<strong>in</strong>ess, and this could <strong>in</strong> the future lead the ICCC to<br />
recommend policies or regulations that unfairly underm<strong>in</strong>e the rights of bus<strong>in</strong>ess. To avoid this situation,<br />
under the MTDP the responsibility for review<strong>in</strong>g and recommend<strong>in</strong>g competition policy reform will be vested<br />
<strong>in</strong> a body that is <strong>in</strong>dependent of both <strong>in</strong>dustry and of the ICCC. To this end, a Competition for <strong>Development</strong><br />
Branch will be established <strong>in</strong> the Department of National <strong>Plan</strong>n<strong>in</strong>g and Monitor<strong>in</strong>g to advise on how to<br />
achieve the ultimate goal of the PNGDSP through competition and consumer protection policy.<br />
2.9 State owned enterp rise reform<br />
State owned enterprise policy framework<br />
The PNGDSP outl<strong>in</strong>es the broad policy framework to position State owned enterprises (SOEs) as crucial<br />
<strong>in</strong>stitutions for PNG’s development <strong>in</strong>to a middle <strong>in</strong>come country by 2030. The key <strong>in</strong>gredients are as follows.<br />
· Public enterprises will play a pivotal role <strong>in</strong> service delivery and <strong>in</strong>frastructure development, although<br />
privatisation may be further considered as a means for improv<strong>in</strong>g efficiency and effectiveness.<br />
· Private sector competition will impose an ongo<strong>in</strong>g obligation for SOEs to operate efficiently us<strong>in</strong>g<br />
cutt<strong>in</strong>g edge <strong>in</strong>dustry technology. This is because the performance of SOEs can be measured aga<strong>in</strong>st<br />
their private sector competitors. The substantial benefits of this approach have already been proven<br />
with private sector competition lead<strong>in</strong>g to the revolution of the telecommunications <strong>in</strong>dustry. As a<br />
result, the efficiency and effectiveness of Telikom have improved substantially.<br />
· Through partnership with the private sector, SOEs can ga<strong>in</strong> access to the skills, technology and<br />
f<strong>in</strong>ance that is needed to improve performance and expand <strong>in</strong>frastructure.<br />
· In areas where service delivery is not commercial, the Government will subsidise <strong>in</strong>vestments by<br />
fund<strong>in</strong>g SOEs to fulfil Community Service Obligations.<br />
State owned enterprises <strong>in</strong> <strong>2011</strong>-<strong>2015</strong><br />
S<strong>in</strong>ce 2002, the ma<strong>in</strong> SOEs have been placed under the control of the Independent Public Bus<strong>in</strong>ess<br />
Corporation. This <strong>in</strong>stitutional arrangement will cont<strong>in</strong>ue as it has been effective for better organis<strong>in</strong>g SOEs,<br />
improv<strong>in</strong>g their accountability and governance, and rais<strong>in</strong>g their standard of performance.<br />
Air Niug<strong>in</strong>i has faced much tougher competition on <strong>in</strong>ternational air routes s<strong>in</strong>ce 2008, result<strong>in</strong>g <strong>in</strong><br />
significantly lower airfares. But <strong>in</strong> the face of competition, Air Niug<strong>in</strong>i has become stronger, record<strong>in</strong>g a<br />
healthy profit <strong>in</strong> 2009 <strong>in</strong> a year when most <strong>in</strong>ternational airl<strong>in</strong>es suffered heavy losses, while still manag<strong>in</strong>g to<br />
lower airfares and improve service. As outl<strong>in</strong>ed <strong>in</strong> section 2.8, the success of competition will be cont<strong>in</strong>ued by<br />
welcom<strong>in</strong>g new carriers on <strong>in</strong>ternational routes, while encourag<strong>in</strong>g Air Niug<strong>in</strong>i to expand its reach <strong>in</strong> the Asia-<br />
Pacific region. Barriers to domestic competition will also be broken down to ensure that <strong>Papua</strong> <strong>New</strong> Gu<strong>in</strong>eans<br />
receive a highly competitive and low cost service.<br />
The PNGDSP outl<strong>in</strong>es a broad plan for a national grid with an electricity transmission super-corridor. The<br />
<strong>in</strong>vestments required <strong>in</strong> <strong>2011</strong>-<strong>2015</strong> and beyond for electricity generation, transmission and distribution<br />
<strong>in</strong>frastructure will require f<strong>in</strong>ancial resources beyond the capacity of PNG Power Ltd. Partnership with the<br />
private sector will be needed for PNG Power to have the desired f<strong>in</strong>ancial capacity. In areas where build<strong>in</strong>g<br />
transmission and distribution l<strong>in</strong>es are less commercial, partnership with donors may be needed.<br />
Alternatively, dividends may be re<strong>in</strong>vested for this purpose. The scope for competition <strong>in</strong> electricity generation<br />
is high, so private sector <strong>in</strong>vestment under competitive conditions will be relied upon to build generation<br />
capacity. For PNG Power, the bulk of its f<strong>in</strong>ancial capacity for <strong>in</strong>vestment should be directed towards build<strong>in</strong>g<br />
the grid where competition is less feasible.<br />
The rapid improvement <strong>in</strong> the performance of Telikom s<strong>in</strong>ce the <strong>in</strong>troduction of competition will need to<br />
cont<strong>in</strong>ue. Over the period <strong>2011</strong>-<strong>2015</strong>, Telikom will be required to focus on the process of build<strong>in</strong>g and<br />
extend<strong>in</strong>g a reliable and technologically advanced <strong>in</strong>ternet service. This will need to track closely the<br />
extension of electricity services <strong>in</strong>to rural areas. Through B-Mobile – the 50 per cent Telikom owned mobile<br />
phone company established <strong>in</strong> 2008 – Telikom will need to pay attention to ensur<strong>in</strong>g that those rural areas<br />
that are yet to receive mobile phone services get connected. This may require re<strong>in</strong>vest<strong>in</strong>g dividends <strong>in</strong> cases<br />
where build<strong>in</strong>g the <strong>in</strong>frastructure is not commercial.<br />
PNG Ports Corporation Ltd operates 16 of the 21 major ports <strong>in</strong> PNG. Implementation of the PNGDSP will<br />
result <strong>in</strong> rapid growth <strong>in</strong> the demand for port services driven by rapid and broad based economic growth. It is<br />
estimated <strong>in</strong> the PNGDSP that throughput will nearly double by <strong>2015</strong> and <strong>in</strong>crease five-fold by 2030. As such,<br />
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