• SriLankan, CPC, CEB top the list 
• Losses of all 400 SOEs could be much higher

The losses of 52 strategically important State-owned enterprises (SOEs) have amounted to over a staggering Rs. 800 billion last year (2022), latest data has shown.

Speaking of these losses, State Minister of Finance Shehan Semasinghe told The Daily Morning yesterday (6): “This is not an amount an economy like ours can continue to suffer. We will take a little more time, but we are concentrating mainly on the institutions that have caused the heaviest losses such as SriLankan Airlines, the Ceylon Petroleum Corporation (CPC), and the Ceylon Electricity Board (CEB), and we are restructuring all of these.”

He added that only the losses of these 52 SOEs have been calculated thus far but that the amount would be much higher if the losses of all 400 SOEs were to be calculated. “These are only the strategically important institutions. I think it would be more than that, and we will finalise the accounts and see,” he added.

Semasinghe further noted: “We do understand that the Government should expedite the reforms pertaining to SOEs and broaden the tax net which is also a key decision that the Government has to make, which we are currently working on,” he added.

Earlier, commenting on restructuring SOEs, Semasinghe noted that a committee had been appointed by President Ranil Wickremesinghe in his capacity as the Minister of Finance, consisting of a few officials as well as individuals from the private sector, to conduct a study and provide a proposal to the Government with regard to the future steps of various SOEs. “The committee is expected to present an effective strategy on how best we can restructure SOEs, but as I said, the policy of the Government is to not be involved but rather to act as a regulating and facilitating authority,” he said. 

He, however, failed to provide a timeline for the expected restructuring period of the SOEs. 

When queried regarding which SOEs would be restructured, he said: “We can’t exactly say which SOEs will be restructured. Once the committee appointed by the President under the Ministry of Finance releases the report, we can comment and say what those specific enterprises would be. Restructuring is not necessarily privatisation, but if there is a requirement and if it is beneficial to the economy, all possible options will be considered.” 

The resolution for the restructuring of State enterprises was presented to Parliament by the President in the interim Budget of 2022 as well as in the Budget presented for the year 2023. 

Accordingly, the State Enterprises Restructuring Unit has already been established under the Ministry of Finance, Economic Stabilisation, and National Policies in order to facilitate the restructuring process of State enterprises. Some of the entities targeted for restructuring are State-owned companies of which the Government is the majority shareholder, while some SOEs operate as corporations. Under these conditions, the Cabinet of Ministers recently approved the proposal made by President Wickremesinghe to make the necessary arrangements to establish a parent company affiliated to the Treasury with 100% equity ownership by the Secretary to the Treasury and to make necessary arrangements to register the State enterprises identified for restructuring as subsidiaries of the said parent company in order to accelerate the SOEs’ restructuring programme.