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Project Rationale and Linkage to Country/Regional Strategy |
Despite significant progress, a number of weaknesses in the performance of NUC remain. NUC has no preventative maintenance plans, and as a result maintenance is carried out on an emergency or ad hoc basis. The NUC also lacks procedures for capital expenditure planning and procurement planning. NUC depends on imported diesel fuel for almost all power generation. Tariffs are the lowest in the Pacific and do not cover diesel fuel cost. The utility therefore depends on a fuel subsidy from the government. Unclear compensation policies and worker classifications result in inefficient allocation of compensation at the NUC.
While an asset inventory was introduced under TA-7873, additional improvements are required to the accounting system, in particular through integration of the fixed assets register and the financial management information system fixed asset management module which has recently been acquired for the NUC. There is also a lack of management autonomy, despite corporatization. Despite the NUC's newly streamlined governance structure, it is still subject to ministerial oversight and requires cabinet approval for borrowing, acquisition and disposal of property, rather than being accountable to an independent board of directors.
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