SOEs lament interferenceBy: JO-MARÉ DUDDY
GOVERNMENT’S interference in the running of state-owned enterprises (SOEs) came under fire during a meeting of the Parliamentary Standing Committee on Public Accounts yesterday.
At the meeting parastatal CEOs and board chairmen criticised what they called autocratic decisions imposed on them by Government.
The leaders of several major SOEs virtually hijacked the first consultative meeting called by the Parliamentary Standing Committee on Public Accounts to voice their frustration with the role Government assumes as the sole shareholder of parastatals.
Standing committee chairman Usutuaije Maamberua tried in vain to pin the SOE representatives down to concerns raised by Auditor General Junias Kandjeke in his annual reports on parastatals. However, the SOE teams clung to the platform to let off steam, especially as Frans Tsheehama, director of the State-Owned Enterprises Governing Council Secretariat, was present.
High on their agenda was the remuneration framework approved by Cabinet in 2010, which divides SOEs into Tier 1, Tier 2 and Tier 3 categories – the latter being for major SOEs like NamPower. The framework causes huge salary discrepancies in and between SOEs, leads to jealousy and discord between employees and hampers skills development, the committee was told.
Agribank chief executive Leonard Iipumbu said Cabinet “imposed” the framework on SOEs without any consultation. SOEs can’t be told to do “ABC without consultation and then be held accountable”, he said.
“If it was up to me, I would nullify the framework until proper consultation has been done,” Iipumbu said, prompting applause from some of his peers.
Jason Nandago, who chairs the boards of both the Electricity Control Board (ECB) and National Housing Enterprise (NHE), was equally critical of the framework. Depending on the appointment date, a CEO can earn less than one of his senior managers because of the framework, Nandago said.
“It won’t work,” he said. “Unless you restructure the whole SOE sector.”
Stanley Shanapinda, CEO of the Communications Regulatory Authority of Namibia (Cran), said the renumeration directive is “completely outdated”. “Merely increasing a salary to keep up with inflation can drive it above the prescribed level”, he said.
The issue also affects boards, Shanapinda said. “Some people get paid, some don’t,” he said. “This affects the morale and makes it difficult to get the necessary commitment from board members”.
The framework also handicaps SOEs that have to compete with the private sector and the world to attract specialised skills, Telecom Namibia managing director Frans Ndoroma said.
How can Telecom Namibia compete in the global market for skills when it “pays peanuts”, he wanted to know.
The top brass of many SOEs furthermore felt that training is needed so that managements, boards and Government as shareholder clearly understand their mandate when it comes to running parastatals.
This is a big issue with corporate governance, NamPower chairman Leevi Hungamo said.
“The shareholder [Government] wants to know why so-and-so was appointed?” he cited an example.
Governance is critical and nobody disputes that, Nandago said, but “the shareholder should know where the line stops”.
Roads Contractor Company (RCC) CEO Engelhard Haihambo said “we still don’t understand the business model of many SOEs”. He said when looking at the “figures” of an SOE, the “expectations of the shareholder” must also be taken into account.
“Some SOEs are expected to create jobs … if I retrench, it is seen as working against the national agenda,” Haihambo said.
ECB CEO Siseho Simasiku added that some SOEs are “created to solve certain national issues”. These issues, however, are determined on a higher level. When an SOE can’t deliver, fingers get pointed as to whose fault it is.
However, it is the duty of the line ministry to implement policy and not that of an SOE, Simasiku said.