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China Times: CPC, Taipower need urgent reform

2012/04/19 11:06:24

The government's recent raising of fuel prices and its decision to increase electricity rates are pushing up consumer prices, triggering widespread complaints among the public.

While the people are tightening their belts in anticipation of hard times ahead, the government must comprehensively address the long-existing problems in the state-run oil company CPC Corp. and Taiwan and electricity provider Taiwan Power Co., which have continued to offer lavish pay and benefits to their staff, despite both companies running at a perennial loss.

According to the National Audit Office, CPC posted NT$38.6 billion in pre-tax losses in 2011, but the company issued NT$4.8 billion in performance bonuses to its workers. Taipower, meanwhile, booked NT$43.3 billion in pre-tax losses, but paid NT$8.4 billion in performance bonuses.

Last year, CPC's personnel costs amounted to NT$24.7 billion, or NT$1.62 million per employee, while that of Taipower was NT$43.5 billion, or NT$1.59 million per employee. The figures are 2.5 times the average of privately run industries and services.

In addition, CPC spends over NT$100 million per year subsidizing its workers' fuel expenses, while Taipower spends NT$27 million per year subsidizing its workers' electricity bills.

In an attempt to calm public outrage, the Ministry of Economic Affairs, which oversees state-run enterprises, has set up a task force to review the performance of CPC and Taipower and work out plans to improve their management.

The ministry should be held responsible for the many inefficiencies existing in the two organizations. It is unlikely that it will be able to enhance the management efficiency without changing their organizational and management structures. They should seize the opportunity to conduct reform and move toward a rebirth. (Editorial abstract -- April 19, 2012)

(By Y.F. Low)