Tuesday, October 4, 2022

Govt climbs down on plan to cut parastatal CEO salaries

Fearing a backlash, the Government is reported to have backtracked on its decision to cut salaries of Chief Executive Officers of parastatals and their managers by aligning them with other departments and ministries salary scales. While Permanent Secretary to the President Carter Morupisi this week claimed to have no knowledge of the decision by the government to reduce salaries of CEO of parastatals, sources within the government enclave alleged that Cabinet was recently discussing the issue. There are even claims that the government had roped in a consultancy company to look into the viability of such an undertaking. Morupisi who is also Cabinet’s secretary said such reports “are news to me.” “That is nothing close to the truth .In fact I doubt it is close to the truth because it was never floated in Government,” he said.

But it is understood that Morupisi consulted CEOs of parastatal and informed them about government’s proposal and they rejected it outright. A source within the government enclave said government was warned and advised that such a decision was likely to lead to parastatatals’s failing to attract and retain competent CEO and managers. When Addressing parastatals heads last year, Morupisi said from April this year(2015)  their performance will be appraised by their parent ministries to avoid a repeat of the failed Morupule B power station project. He explained that the move was aimed at ensuring that risks as they emerge are managed earlier “so that we do not get into an unfortunate situation like the Morupule B project.”

“My plea with parastatals is that we are getting into a different phase in April. You are going to be appraised by your parent ministries. In order for you to understand how this is going to work, you need to interact with your parent ministries,” said.

Morupisi said government as the shareholder in various parastatals was concerned at some performance gaps which could be closed if there was close monitoring of parastatals by government.

“These are challenges that could be managed better if there was close monitoring in the work you do and risks as they emerge could be managed earlier,” he said.
He said in 2007 Government adopted a policy on incomes employment and profits that had in itself a way of trying to moderate resource distribution between government and parastatals.

He said the policy also put a cap into how much a parastatal Chief Executive Officer should be paid as compared to Permanent Secretaries in various government ministries.
He said the challenge has been to ensure that the parity in remuneration perks are contained. “The idea was trying to provide competent CEOs and contain costs. What is troubling is the way we understand the implementation of the policy. Of course certain options were made to certain parastatals to go outside the government brackets,” said Morupisi.

However he said, the government has observed that majority of parastatals including those which are not performing well and rely on government for money are also “going outside the government bracket.”

He said CEOs of such parastatals should advise their board as to how salaries are perked and ensure that resources are managed with care. He said Parliament has also tightened screws on parastatals through its committees which play oversight roles.



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