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State-run firms to increase efficiency within five years: ministry

State-run firms to increase efficiency within five years: ministry

Taipei, June 29 (CNA) State-run oil refiner CPC Corp., Taiwan and Taiwan Power Co. (Taipower), which have been heavily criticized for poor performance and efficiency, have been told to increase income and decrease expenditure, the Ministry of Economic Affairs said Friday. The two companies are expected to create total cash flow of NT$110 billion (US$3.68 billion) -- NT$61 billion for CPC and NT$50 billion for Taipower -- within five years, according to a preliminary report from the two companies released that day. Liu Ming-chung, executive director of the ministry's State-owned Enterprise Commission, told a press briefing that the two companies are also planning to improve their performances in the area of raw materials procurement to the tune of NT$37.1 billion. Meanwhile, the two firms will also trim expenditure of NT$237.9 billion through deferring investments and lowering inventory levels within the five-year period, Liu added. The two companies have come under attack since the government announced that electricity rates would be raised substantially to help cover Taipower's mounting losses, while raising oil prices by 60 percent April 1. The announcement sparked outrage, with critics contending that some of Taipower's losses are due to poor management and bloated pay scales and that consumers and the private sector should not have to pay for such waste and inefficiency. Economics Minister Shih Yen-shiang, who also attended a press conference in which the preliminary review report was released, said it will serve as a guideline for future reforms. Shih described the report as a promise and said that reviews and supervision of the two companies will continue. In addition, the two money-losing companies will conduct internal organizational transformation and cut down on administrative expenditure, as well as recruiting new employees to achieve better efficiency. On April 9, the ministry formed a task force comprising CEOs, consumer representatives and government officials to review the performances of the two state-run firms. Five committee meetings have been held over the past few months. The two companies have been losing money since 2008 and the Ministry of Economic Affairs estimates that CPC's and Taipower's losses will have reached NT$68 billion and NT$190.1 billion, respectively, by the end of 2012. (By James Lee)


Updated : 2021-01-19 10:14 GMT+08:00