Q1. Mr. Matairavula,
what are the main functions and responsibilities
of this ministry and what was the main objectives
under which it was created?
A1. The Public Enterprises Unit now known
as the Ministry of Public Enterprises and
Public Sector Reform was established in 1996
to facilitate the implementation of the reform
of Public Enterprises program and to monitor
the performance of these enterprises. The
legal framework of Fiji's public enterprises
reform is the Public enterprises Act, 1996.
The Ministry is therefore responsible for
restructuring or reorganizing government entities
which include ministries and departments,
fully owned government companies and statutory
bodies. Monitoring the performance of these
entities once declared as government commercial
companies [GCCs] and commercial statutory
authorities [CSAs] is also the other important
aspect of the Ministry's responsibility. Currently
this includes 11 GCCs and 5 CSAs. Basically,
the main objective of reforming public enterprises
is economic efficiency. Other objectives include
reducing the burden on taxpayers, stimulating
capital market development and widening ownership
of companies in the economy. The first stage
of the program is the introduction of measures
to improve accountability for performance.
The second stage involves increasing competition
to which public enterprises are subject and
finally privatization or divestment of shares
in the entities to the private sector. The
framework in which privatization is pursued
in Fiji is in accordance with international
experience which indicates that there are
two primary factors which affect the success
of the privatization. This must be undertaken
in a market oriented environment where enterprises
operate in a competitive market. The enhancement
of competition must first be pursued as far
as possible as the competition is the most
important factor that determines the success
of privatization in achieving efficiency gains.
Q2. In this year 2002. What are the major
achievements this ministry has accomplished?
A2. First of all, the financial performance
of enterprises monitored by the ministry has
improved steadily in the last two years [2000
and 2001]. They made a combined Net Profit
after Tax of $11.7 million in 2001 after a
$0.4 million loss in 2000, an increase of
2738%. They paid taxes of $1.6 million in
2000 and $1.7 million in 2001 and also paid
dividends of $1.6 million in 2000 and $1.9
million in 2001. Other achievement was the
tabling of the business Plans of 6 out of
the 16 entities for the first time in Parliament
last year 2002 as required under Public Enterprise
Act. Except for the five [5] agro and forest
based GCCs; all other enterprises Annual Reports
for 2001 were tabled in Parliament. This indicates
the commitment and the effort of the Ministry
towards improving the performance of these
entities. Another achievement would be the
amendment of the Public Enterprises Act that
was passed in Parliament in 2002 to improve
the reporting time lines by these entities.
It is indeed satisfying to see the entities
responding to the new reporting time lines
which have been reduced and an indication
of the level of efficiency at the management
level of these entities. The Report by the
Task Force on the Reorganization of the Department
of Immigration was completed and tabled in
Cabinet. A Committee has been appointed and
now implementing the recommendations. The
Ministry was also involved in the revitalization
of the Viti Corps and Rewa Rice Ltd, both
agro based companies which have been under
performing. An Administrator Manager was appointed
to manage the Rewa Rice in anticipation of
privatization in the near future. As for the
Viti Corps the Ministry is working closely
with the Ministry of Agriculture to build
up its dairy unit and strengthen the others.
Increasing public awareness of the economic
benefits to reforms has been undertaken by
the Ministry through pamphlets and workshops
and this will continue in 2003. A study to
review public service to identify candidates
for reorganisation under the Public Enterprise
Act was commissioned late in 2002 and now
is underway and to be completed in March 2003.
The study would also recommend options and
appropriate methods of reorganisation suitable
for each candidate. To facilitate the implementation
of affirmative action policies for the enhancement
of Fijians participation in commerce the Ministry
also commissioned a consultancy to compile
a Directory of Indigenous Business to assist
the GCCs and CSAs identify potential contractors
for the supply of goods and services. These
would be quite useful in a number of ways
including potential investors who wish to
have joint ventures with Fijian entrepreneurs.
This is the first ever attempt to compile
such a comprehensive document. After some
stiff resistance on the direction the further
reform of the Port Sector is to move, it was
finally agreed by all stakeholders last year
that the Asian Development Bank undertake
another study and to review earlier reports.
This study is expected to be completed by
March 2003.
Q3. And what would be now the main guidelines
for this year 2003?
A3. First of all to continue to improve
the monitoring of entities' performance in
order to ensure that the government receives
optimum returns for its investment. Secondly
we will have to vigorously promote good corporate
governance in government owned entities. These
are important as they have financial implications
to the government as shareholder/owner of
these enterprises and particularly for the
fact that these enterprises are government
vehicles for delivery of services vital to
the economy as a whole. On this line a number
of workshops are being planned for the year
to target parliamentarians, directors and
executives of our entities. We will continue
promoting awareness of the benefits of the
reform programme as there are still doubts
and resistance in some quarters especially
the trade unions. Thirdly policies would be
reviewed and new ones developed if warranted
to enhance our monitoring capabilities. We
would like to see and ensure that such policies
facilitate rather than inhibit the operations
of our entities to become profitable and successful
commercial enterprises. We will undertake
the restructuring/reorganization of activities
identified in the public service to facilitate
efficiency and effectiveness as identified
by the Consultants. 2003 will be the year
to identify potential candidates for privatisations
as well as sell down further government shares
in those already identified. Another target
this year is to ensure that the commercial
processing of the mahogany is based on a sound
commercial framework to derive maximum benefits
to all the mahogany stakeholders. Establishment
of the Mahogany Trust and having a J V Partner
on the processing and marketing of the mahogany
products are also targets for the year. Further
reform of the Port is to be progressed this
year and we would like to achieve some tangible
results. The cooperation and support of all
stakeholders is vital as without this the
focus of having an efficient port sector would
be lost. We would like to see a long term
sustainable arrangement is in place this year
for the air traffic management within Fiji
FIR. Discussions on the subject has been going
on for sometime. We also intend to finalise
the outstanding housing estate of CAAFI and
its shares in ATS. These matters have been
dragging due to differences in opinions and
changes in government policies.
Q4. What are the current and future assistance
of foreign partners and experts that will
increase the efficiency and the profitability
of the Public Enterprises?
A4. Multilateral lending agencies such
as the Asian Development Bank [ADB] assist
the government in a lot of ways in the reform
programes like the further reforms pursued
in our major ports of Suva and Lautoka. ADB
was also closely involved in a two phased
programme to strengthen institutional capacity
of the Ministry. Another ADB funded assistance
in regards to the upgrading of the Suva-Nausori
water supply includes the reform of the water
and sewage section of the Ministry for Works
expected to be undertaken in 2004. The ADB
also assists in the reorganizations of other
government entities, such as the Fiji Sugar
Corporation, which are outside the ambit of
the Ministry of Public Enterprises. Overseas
consultants have been and would continue to
be utilized in the reform programmes as local
capacity is quite thin. Legal, financial and
asset sales are areas that we normally look
for expert advise. In terms of business partnerships
the government would seek strategic partners
who bring in the skills and expertise to enhance
the value of the enterprises through technical
and management knowhow as well as capital
inflows.
|
Q5. What are
the main opportunities that foreign Investors
might have in the privatization process of
the Public Enterprises?
A5. The Government policy on the privatization
of national strategic assets is considered
cautiously and Parliamentary approval is required.
Nevertheless foreign participation as strategic
partners in our enterprises will be always
welcomed as they bring in technical and management
expertise required to improve operations of
the enterprises as well as the finance to
adequately capitalise them. The government
has some good assets which are potential prime
candidates in which foreign investors with
proven expertise and financial credibility
could be involved as strategic partners. Indigenous
Fijians being resource owners are being encouraged
by the government through its affirmative
action policies to participate actively in
commerce. As such 50% of contracts by the
enterprises are to be offered to them. Foreign
interest with the expertise and capital could
be involved in this area to assist the target
group enhance their capacity to undertake
such projects particularly capital intensive
ones.
Q6. What can you tell our readers about
the example of the Telecommunication sector
as a privatization process?
A6. Yes, the Telecom Fiji Limited which
now comes under the Amalgamated Telecom Holdings
Limited is a good example of a restructured
government entity that has gone through the
full reform process. It started as a civil
service department before it was corporatised
and then eventually privatised. Government
interest in the Company is now only around
34%. Whilst most of the objective of the reform
of the Telecom Sector has been successfully
achieved consumers however still have not
benefited in terms of pricing if international
benchmarks is something to go by. The Government
however is fully aware of the need to lower
telecommunications charges and steps are currently
underway to address this issue.
Q7. Fish and wood represent a potential
growing export product for Fiji. What are
the measures being taken to develop international
awareness of this two Fijian assets?
A7. In regard to wood, the government
has changed its policy on the processing of
its mahogany plantations as it now wishes
to accrue the optimum benefits for all stakeholders.
Downward processing and value adding is now
the strategy to get the best value out of
these mahogany forests. A reputable strategic
partner which will process and market the
mahogany products is expected to be appointed
by June, 2003 through a competitive tendering
process. The tender process will begin soon.
Exotic pine is also a successful industry
bringing in vital foreign exchange earning
through the exports of pine products. The
local indigenous species are also highly valued
and exported as logs and as other wood products
such as ply board and veneer. A number of
overseas investors together with locals are
involved in the forestry sector. As regards
to fish processing and canning, the government
has 98% shares in PAFCO with the remaining
2% held by individuals. The company is performing
very well in the last two years (2000 and
2001) and recording the highest profit amongst
the other government fully owned companies
and commercial statutory authorities currently
monitored by this Ministry. The long term
profitability of the company lies on having
strategic partners who can offer capital,
market, fish supply and technical support
which is currently provided under the existing
contract with Bumble Bee Seafood's, an American
company. This contract expires in 2009. Divestiture
of shares in the company is in the pipeline
with expressions of interest being shown by
the resource owners as well as others. Proposal
to set up a slipway and ship repair company
in partnership with FCF of Taiwan is being
put forward as the company needs to have in
place the appropriate infrastructure to service
its fishing fleet as well as to capture the
excess market demand in this area. The proposal
will add considerable value to the company
and growth to the local economy. Exports of
fresh fish has been growing steadily over
the years involving local and foreign investors.
In both the fisheries and the forestry sectors
the government has put in place schemes to
facilitate and encourage increased indigenous
Fijian participation. Obviously, these are
also potential areas for overseas investment
involvement.
Q8. How do you see the Public sector
reform as a catalyst for investment and
what are the initiatives addressed to increase
private sector participation in the Public
Enterprises?
A8. In terms of privatization of public
enterprises, the Government is of the view
that reorganized government enterprises should
operate for at least 3 years before they are
considered for privatization. Involvement
of the private sector is also through other
forms such as outsourcing and contracting
for provision of goods and services. Private
Sector participation in these entities will
obviously improve operations and service delivery.
The reform objectives are to ensure the efficiency
of the enterprises and because of their strategic
importance they contribute directly to the
cost of doing business in Fiji. So the efficiency
of the Ports and airports, availability of
air freight cargo spaces, effective water
and power supplies as well as the overall
standard of infrastructure in the country
are some of the fundamentals for increased
investment. For these purpose the government
established our enterprises as vehicles to
develop and manage those vital services and
therefore require them to be efficient and
also effective. My Ministry is also developing
an indigenous Business Register that should
be ready by April, 2003. The Register will
provide the necessary database for reference
of all types of business being undertaken
by Fijians and the different sectors they
operate. It will be also circulated offshore
through the Fiji Embassies and Trade Commissions
offices so that foreign investors have an
easy access to it. Joint venture or partnership
with this group is therefore encouraged.
Q9. What would you tell them about the
various incentives and advantages that investment
in Fiji brings to the overseas investors?
A9. The Fiji Trade and Investment Bureau,
has all the details about the various incentives
and advantages that Fiji offers to the overseas
investor. We believe that through the active
participation of foreign investment in partnership
with local private sector involvement and
government providing the catalyst for investment
that our economy could achieve the level of
growth projected. The government therefore
is putting in place a more investor friendly
environment and the reasons for the rationalization
exercise being undertaken on the various incentives
in existence. Foremost, the current political
stability existing in the country and the
political will espoused by the present government
are indications of our government's commitment
in promoting a stable environment for foreign
investment in this Country.
Winne cannot be held responsible for
unedited transcription
|
V.I.P. INTERVIEWS
