No Treasury Support for Non-Profitable SOEs

COLOMBO (News 1st): Sri Lanka is set to undertake a comprehensive restructuring of its State-Owned Enterprises (SOEs), aiming to transform them into highly efficient institutions. 

Dr. Anil Jayantha, Minister of Labour and Deputy Minister of Economic Development, outlined the government's strategic approach during a press conference on Wednesday (30).

Dr. Jayantha emphasized that each SOE will be evaluated separately due to the unique nature of their objectives and operations.

The restructuring process will be tailored to each entity, considering various mechanisms, including private sector involvement. He clarified that restructuring does not solely mean divestiture; it is one of several options being considered.

A cabinet-appointed committee, comprising experts, has been established to oversee the restructuring process. This committee will refer to existing legal frameworks and new acts that are being amended and introduced to guide their decisions.

While a specific timeline for the restructuring cannot be provided due to varying circumstances, Dr. Jayantha assured that the process will proceed, supported by budget allocations and available fiscal space. 

He noted that some SOEs do not generate profits but are essential for market monitoring and intervention to ensure efficiency. Therefore, their performance cannot be assessed solely based on profits.

Dr. Jayantha stressed that SOEs that are expected to generate profits or revenue will not be maintained through treasury support. Instead, it is the responsibility of their respective boards and management to develop strategies for financial sustainability, with the committee analyzing each situation.