The Government has already taken steps to overhaul loss-making State-owned Enterprises (SOEs), said a senior minister of the Government in response to the International Monetary Fund’s (IMF) new Mission Chief’s wish to see more progress made in the country’s SOE’s reforms.
The IMF’s new Mission Chief for Sri Lanka, Evan Papageorgiou said the IMF wants to see more progress made in SOE reforms amid delays due to the Government’s decision to revise the divestment efforts under the previous regime.
The Cabinet of Ministers flashed the green light last week for setting up a committee and a draft bill to restructure SOEs which have come under criticism for corruption, inefficiency and politicisation.
Titled ‘State Commercial Enterprises Management’ the draft bill aims at transforming SOEs into economically viable and professionally managed entities..
The move also seeks to do away with the financial burden state-run bodies load on the Treasury, while paving the way for local and foreign investments through a structured, accountable framework.
Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said that the Bill when enacted will create a legal foundation to permanently insulate state-owned entities from political influence.
The Government has identified around 400 underperforming and financially non viable SOEs that needs a complete overhaul.
The Ceylon Electricity Board, the Water Board, Ceylon Petroleum Corporation, SriLankan Airlines are some of the state-owned institutions that the IMF has called upon the government to expedite reforms.
Sri Lanka’s national carrier posted a US$72.1 million loss in FY2024 on 38 of its 52 routes while the Ceylon Petroleum Corporation faced major challenges and losses, including a 70.2% drop in net profits and a 20.1% decline in revenues in 2024.
The global lender has called for accelerated efforts to restore the operational viability of Sri Lankan Airlines and resolve its legacy debt.
The IMF Mission Chief for Sri Lanka stressed the importance of the measures during a virtual press briefing last week.
Papageorgiou acknowledged that Sri Lankan authorities are preparing a medium-term strategic plan to address the airline’s financial challenges.
The 2025 Budget has allocated Rs. 20 billion to pay off some of the airline’s debt, marking a significant step towards financial stability.
SriLankan Airlines has hired a financial advisor to restructure its international board, further indicating progress in the right direction.
However, Papageorgiou outlined the need for these efforts to pick up pace to ensure a timely resolution of outstanding issues.
He expressed optimism about the future of State-Owned Enterprises (SOEs) in Sri Lanka, noting that there is a clear path forward and urging more progress in this area.
