China Petroleum and Taipower Need Reform

China Petroleum and Taipower Need Reform
China Times editorial (Taipei, Taiwan, ROC)
A Translation
April 19, 2012

Summary: China Petroleum and Taipower are plagued by gross inefficiency. The Ministry of Economic Affairs can hardly escape blame. If the organization and management of China Petroleum and Taipower remain unchanged, then to expect a report of enhanced operational efficiency three months from now is the height of naivete. Gasoline and electricity prices have both been hiked. Everyone is demanding a review of the performance of China Petroleum and Taipower. These two state-owned enterprises should seize the opportunity to push through reforms so that their organizations may be reborn.

Full Text below:

Both gasoline and electricity prices have been hiked. This has led to price hikes in many consumer goods. Everyone is grumbling. Middle and low income people have been the hardest hit. China Petroleum and Taipower are losing money. Yet their employees continue receiving high salaries and excellent benefits. Even security guards receive one million NT annual salaries. Regardless of whether the companies earn profits or suffer losses, employee bonuses continue increasing. They have become a whole new category of fat cats. Gasoline and electricity prices have both been hiked. If China Petroleum and Taipower can turn their companies around. employees will receive even larger bonuses. The general public is being ripped off to enrich China Petroleum and TaiPower, The system is so twisted, it must be reformed.

Gasoline prices recently rose over 10%. Electricity prices rose between 16% and 31%. The Ministry of Economic Affairs estimates that gasoline and electricity prices will result in a 0.83% to 2.29% increase in this year's CPI. The growth rate will decrease 0.48%, lowering it to 3.37%. These averages imply tha tthe impact is limited. But many businesses are fighthing to survive. Taxi drivers are one example. Rising gasoline prices mean increased overhead and diminished profits. Consumer prices have steadily increased. The impact is not hard to imagine.

Taiwan's energy is totally dependent on imports, We lack the wherewithal to maintain low across the board gasoline and electricity prices. Attempting to do so encourages waste and forces taxpayers to subsidize the biggest users of gasoline and electricity. The result is an even greater injustice. Gasoline and electricity prices must reflect their costs, This is necessary and legitimate. But people have begun tightening their belts. China Petroleum and TaiPower's problems are long-standing, and must be closely scrutinized. Operating losses must not simply be covered by the price freeze.

China Petroleum and TaiPower are oligopolies. What sort of strange developments has this led to? A report from the Bureau of Audit tells all. Last year China Petroleum's pre-tax loss was 38.6 billion NT. Performance bonuses amounted to 4.8 billion NT. Last year Taipower's pre-tax loss was 43.3 billion NT. Performance bonuses amounted to 8.4 billion NT, This far exceeds the budget estimate of 3.9 billion NT. China Petroleum and TaiPower together lost 80 billion NT, Yet they paid out over 13 billion NT in bonuses. State-owned enterprises rack up one loss after another. Yet bonuses increase, again and again. China Petroleum and TaiPower say the performance bonuses were approved by the Ministry of Economic Affairs. No wonder Wang Chung-yu, Chairman of the ROC-USA Business Council, and former Chairman of China Steel, said "The poor performance of state-owned enterprises was caused by the government."

Now look at personnel costs, According to the Bureau of Audit, Last year China Petroleum personnel costs were over 24.7 billion NT. Each employee cost 1.62 million NT. Last year Taipower personnel costs were over 4.35 billion NT. Each employee cost 1.59 million NT. Such high personnel costs are roughly double the industrial and service sector average. The two companies' employees are aging. A crisis of continuity looms. China Petroleum and Taipower claim that personnel costs are not that high relative to total expenditures. But China Petroleum and TaiPower employee salaries are better than other private enterprises. That is an indisputable fact. Compare the annual per capita contribution made by the employees of China Petroleum against those of the Formosa Plastics Group. China Petroleum contributes only 160 million NT. Formosa Plastics contributes as much as 280 million NT. This further highlights China Petroleum's inefficiency.

Now look at employee benefits. Each year China Petroleum provides its employees with over $100 million NT in gasoline subsidies, as a fringe benefit. Each year Taipower provides its employees with over 27 million NT in electricity subsidies. Gasoline and electricity prices have both been hiked. China Petroleum and TaiPower employees meanwhile, enjoy generous gasoline and electricity subsidies. Naturally people are angry. Ruling and opposition legislators are blasting them. Taipower has decided to abolish several electricity subsidies. China Petroleum has said it will reduce or cancel gasoline subsidies. This shows that under the existing system of state owned enterprises, everyone dips into the same pot. Outside pressure must be overwhelming. Expecting China Petroleum, Taipower, and other state-owned enterprises to reform themselves from within, is expecting pigs to fly.

To quell public discontent, the Ministry of Economic Affairs recently established "Taiwan Power Company and Chinese Petroleum Corporation Business Improvement Teams." They recruited people from the business community, management experts, consumer advocates, and others, These people will conduct a comprehensive review of TaiPower and China Petroleum. They will examine their operational efficiency, procurement systems, personnel systems, privatization process, then submit a report in three months. How should we liberalize the market for gasoline and electricity? How should we accelerate the privatization of China Petroleum and TaiPower? These are the fundamental questions that will be asked.

Facing a financial black hole and a shortage of talent, Taipower Chairman Chen Ku-ming said, "I find it almost impossible to sleep at night." We wonder. Does the chairman of China Petroleum find it almost impossible to sleep at night? Rome was not built in a day. China Petroleum and Taipower are plagued by gross inefficiency. The Ministry of Economic Affairs can hardly escape blame. If the organization and management of China Petroleum and Taipower remain unchanged, then to expect a report of enhanced operational efficiency three months from now is the height of naivete. Gasoline and electricity prices have both been hiked. Everyone is demanding a review of the performance of China Petroleum and Taipower. These two state-owned enterprises should seize the opportunity to push through reforms so that their organizations may be reborn.

中油台電的內部改革刻不容緩
2012-04-19中國時報

油電雙漲，帶動各項民生用品百物齊漲，民怨滿天，尤其中低收入者受到衝擊最大；另一方面，中油、台電虧損累累，員工卻享高薪與優渥福利，連保全人員都有百萬年薪，且不論盈虧獎金越領越多，成為另一種「肥貓」。油電雙漲後，中油、台電若轉虧為盈，員工還可領更多獎金，形同瘦了百姓，肥了中油、台電，這樣畸形的制度已到了非改革不可的地步。

這次油價平均上漲逾一成，電價上漲一成六至三成五。經濟部評估，油電雙漲將使今年物價年增率增加○．八三個百分點，為二．二九％；經濟成長率降低○．四八個百分點，勉強維持三．三七％。儘管平均數來看，影響有限，但對個別產業則是生死存亡之戰，以計程車業者為例，油價上漲一成，意味著成本增加而獲利減少，在民生物價紛紛喊漲情況下，衝擊之大可想而之。

台灣的能源完全依賴進口，沒有實施全球最低油、電價格的本錢，如此不但變相鼓勵浪費且由全體納稅人補貼用油用電大戶，形成更大的不公不義。因此，油電價格適度反應成本，有其必要性與正當性。不過，民眾開始勒緊褲帶過苦日子之際，中油、台電長期存在的沉痾也必須徹底檢討，不能完全把經營虧損的帳算在「凍漲」上。

中油、台電在寡占經營之下，究竟有那些畸形發展？看看審計部報告就知道。依審計部調查，中油去年稅前虧損三八六億餘元，績效獎金總額高達四十八億餘元；台電去年稅前虧損四三三億餘元，績效獎金編列八十四億餘元，遠超過預算數卅九億餘元。中油、台電總計共虧損八百多億元，獎金卻發放一百三十多億元。為何國營事業虧損累累，獎金越領越多，依中油、台電的說法，這些績效獎金的發放都經過經濟部核准，難怪中美經濟策進會理事長、前中鋼董事長王鍾渝批評，「國營事業績效不好，是政府造成的。」

再看人事成本，依審計部調查，中油去年人事費用約二四七億餘元，每位員工人事成本一六二萬元；台電去年人事費用約四三五億餘元，每位員工人事成本一五九萬元。這樣高的人事成本大約是一般工業及服務業平均值的二點五倍。兩家公司由於人力結構老化，呈現人力斷層危機。儘管中油、台電聲稱人事成本占總支出比例不高，不過，中油、台電員工薪資優於其他民營事業是不爭事實。比較中油、台塑員工每人每年的貢獻度，中油只有六千多萬元，台塑則高達一億八千多萬元，更凸顯了中油的績效不彰。

至於員工福利方面，中油每年編列高達一億多元做為員工多種購油優惠補貼，台電則每年編列二千七百多萬元電價補貼支出。在油電雙漲的效應下，中油、台電員工享受這麼高的購油、購電優惠補助，的確令民眾氣結。如今在朝野立委強烈炮轟下，台電已決定全數取消員工用電優惠，中油也表示將研擬縮減或取消購油優惠補貼。從這個小小例子可以發現，在現行國營體制下，大家一起吃大鍋飯，如果不是外界壓力大到難以抗衡，要寄望中油、台電等國營事業進行體制內的改革，難如登天。

為平息民怨，經濟部日前成立「台電及中油公司經營改善小組」，延攬企業界、管理學者、消費者代表等，全面檢討台電、中油的經營效率、採購制度、人事制度與民營化進程，三個月內提出檢討報告。究竟台灣的油、電市場該如何落實自由化，中油與台電如何加速民營化，這些根本問題都該一併檢討。

面對財務黑洞、人才斷層等問題，台電董事長陳貴明曾表示「晚上幾乎都睡不著覺。」不知道中油董事長是否同樣睡不著？冰凍三尺非一日之寒，中油與台電內部充滿這麼多不效率，主管機關經濟部難辭其咎；如果中油與台電的組織與經營形態不改變，期待三個月後出爐的檢討報告就能提升其經營效率，這樣的想法未免太過天真。油電雙漲，各界要求中油與台電檢討績效的聲浪居高不下，兩家國營企業應把握時機進行改革，讓自己脫胎換骨。