Ministry in talks for overdue two billion receivables from MIDROC Technology Group
The newly formed Ministry of Public Enterprises, in a meeting that was held on Wednesday in the presence of senior members of the executive and legislative branches of government, announced that it has reshuffled board management of public enterprises. Hence, the number of ministers and state minsters running public enterprises as board chairpersons and members has been limited not to exceed more than 50 percent.
Girma Amente (PhD), Minister of Public Enterprises told reporters that the new modus operandi (directive) has been set out based on a study the US-based McKinsey and Co. has conducted, the ministry has come to terms to limit the number of ministers and likeminded political appointees. Hence, for the 23 public enterprises, the maximum number of officials at a particular enterprise is restricted to two. Yet, the minister said the actual board membership was slashed to include only one appointed official.
The reason for the move, according to Girma, is because most of the enterprises have been found to be inefficient and ill-managed on board level.
“We have found that some of the board members couldn’t meet at least once in every month as stated in the bylaws”. Out of the 23 state-run enterprises ten have produced a clean audit report for the ended fiscal year, Girma said. There are enterprises that remain unaudited for five consecutive budget years under the watch of ministerial level board leaderships.
For that reason, the board membership procedures from now on will be based on merits and professionalism. He said the reshuffle will introduce fresh board members from nonpartisan institutions and the academia. In the previous set up, state ministerial posts were the lower status of the designated rank across the enterprises.
According to the minister, there are companies that have been unable to pay remaining sums long after privatization process. To that effect, the new minister said he has initiated negotiations with companies. One of the corporates is MIDROC Technology Group. The group owes the ministry some two billion birr receivables overdue. Hence, summoning executives the minister said terms have been negotiated on how the company pays the money in time. “They have signed a formal commitment accord which was not the case before and they will be paying installments from June”. He said many of the liable companies have submitted “a revised strategic plan” on how they will reinstate payments.
That said the six-month performance report of the ministry indicated that three enterprises namely: Caustic Soda Ash, Ethiopian Pulp and Paper and Bahir Dar Textile factories have stated lose with the other 20 registering a combined 1.5-billion birr profit for the current fiscal year. Across the 23 enterprises, a total of 20.7 billion birr total turnover has been reported in the concluded six months period of time. According to Girma, the government has put aside 600 million birr to plant a new factory for the Caustic Soda Ash and will soon privatize Bahir Dar Textile Factory.
In addition to the reshuffling measure, newly assigned board chairpersons and members will be required to partake for a fortnight leadership training scheduled to be conducted in May at the Meles Leadership Academy. But to the likes of Mulugeta Wuletaw, state minister of Federal Affairs and Pastoralist Development, a two-week inductive training is less likely to bring about the dynamic changes the ministry of public enterprises is seeking for. In addition to that, members of parliament have echoed concerns on the lack of the studies the ministry has conducted.
