POLITICAL interference into operations of all the State Owned Enterprise (SOE) remains a challenge for the government.
This was highlighted in the Solomon Islands 2009 Diagnostic Trade Integration Study (DTIS) report released last week.
SOEs are being looked after by the Investment Corporation of Solomon Islands (ICSI), which is the commercial arm of the Government.
"One of ICSI's main challenge is dealing with political interference in the management and appointment of the boards of directors," the report said.
Government itself has long run a number of major businesses established under the Investment Corporation of Solomon Islands Act, including eight companies; fully owned State Owned Enterprise (SOEs) as well as companies with minority shareholdings.
However over the years, some of the SOEs have faced financial difficulties.
A number of these companies notably Solomon Airlines, Soltai Fishing & Processing Limited, Sasape Marina have performed poorly and are either insolvent or close to being bankrupt.
Government has also identified two SOEs for privatisation.
They are Home Finance which was now taken over by National Provident Fund and Sasape Marina, which was recently put on tender.
The Commercialisation of Solomon Islands Electricity Authority (SIEA) has also been undertaken with new management now in charge of its operations.
The report also highlighted that weak governance due to 'wantokism' and cronyism is one of the major causes of poor SOE performance.
In order to check excesses and abuse, an independent regulatory body, possibly formed under a revised SOE act, should be formed to regulate and monitor performance of the boards, management and operations of these companies.
By MOFFAT MAMU
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