FINANCE and Treasury Minister Hon Snyder Rini has released Solomon Airline’s $10 million Community Service Obligation (CSO) payment for 2016 to enable air services to more domestic locations in the country.
This funding is part of the ongoing implementation of the CSO policy framework, which is set out in the State Owned Enterprises Act 2007 and SOE Regulations 2010.
Under the SOE legal framework, SOE’s must operate as commercially run, profit-making entities in the delivery of services in their area of responsibility.
As SOEs usually provide important services to certain segments of the community at a loss, the key objective of the CSO framework is to ensure that the SOEs are able to deliver these services without detriment to their finances.
These services are to be conducted in accordance with industry safety and compliance standards and provide social and economic benefits to the communities.
Ahead of the release of the payment, Hon Rini and the Chairman of Solomon Airlines, Mr. Austin Holmes, signed a contract committing Solomon Airlines to provide domestic air transportation services to 19 locations throughout the Solomon Islands in return for the $10 million payment.
A statement from the Ministry of Finance and Treasury says the DCC Government is committed to supporting Solomon Airlines in its operations and supporting the Chairman, Board and Management to create a stronger airline.
“The Minister for Finance and Treasury, Hon. Snyder Rini, on behalf of the DCC Government, has released Solomon Airlines’ first Community Service Obligation (CSO) payment for 2016.”
“The Government acknowledges that the airline industry can have its challenges but encourages and expects Solomon Airlines to continue to improve its services and profitability.”
“The safety of the industry and the travelling public is of paramount important to the Government, in ensuring that Solomon Airlines continue to fly and provide a safer air service to the travelling public”
“Solomon Airlines is our national carrier and provide a vital service linking the provinces to Honiara, and Honiara to the rest of the world.”
SOEs and the Government sign contracts for SOEs to provide these services and government reimburses SOEs for their costs. However, SOEs are required to report on the effectiveness of the delivery of the contracted services.
The Finance Minister has already signed CSO contracts with five SOEs for 2016. These SOEs includes SIBC, Solomon Post, CEMA, Solomon Power and Solomon Water.
For this year, 2016 the DCC Government allocated 25 million in the Recurrent Budget for Community Service Obligation to SOEs.
Source: PM Press