The Sri Lanka Transport Board (SLTB), which consists of 7,137 buses and 25,384 employees, is set to undergo several transformations and adopt new business plans to improve its growth.
Recently, Minister of Transport and Highways Bimal Rathnayake stated that a profit-making business model would be formulated, with a bonus to be granted to profit-making SLTB bus depots to facilitate this.
Meanwhile, according to stakeholders, necessary structural reforms, adopting a viable business model, and addressing resource gaps such as labour concerns are necessary for ensuring the enterprise’s profit growth.
Reform models for profitability
Speaking to The Sunday Morning Business, University of Colombo (UOC) Department of Economics Professor Lalithasiri Gunaruwan, who specialises in transport economics, discussed several pathways that could be adopted by the SLTB in ensuring its profit-making ability. He highlighted that a holding corporation structure would be appropriate as a viable business model.
He further explained that there had been instances where the SLTB had been making profits, but successive governments had largely failed to ensure consistent profit-making due to certain infeasible decisions.
However, he highlighted that the SLTB could be turned into a proper profit-making business, identifying several obstacles that needed to be resolved to achieve this. According to Prof. Gunaruwan, these include policy-based and structural obstacles. In addition, he stated that the management of the entity should be given a freer hand in operating and making business decisions based on viability.
“There are several similar profit-making models that exist, especially regionally, in countries like Singapore. We have been advocating for the need to adopt such successful models and allowing this entity to run devoid of political interference and with a profit orientation. Moreover, even if the Government wishes to provide certain welfare facilities to the public, such as for schoolchildren, it could still be achieved with the Government funding such efforts,” he added.
Hence, he stated that suitable decision-making must be undertaken and further explained that if inefficiencies existed, they should be resolved by adopting the appropriate methods, such as audit mechanisms.
In early 2025, a total of 55 SLTB depots were reported as operating at a loss, for which several measures have been undertaken, according to the Government.
Meanwhile, Prof. Gunaruwan highlighted that the SLTB must be maintained as a living entity on a commercial basis. Accordingly, the State, as the owner, should be looking after the capital of the entity and if the required Return on Investment (ROI) is not met, a committee could be appointed to address those issues. Most importantly, he highlighted that ministries should not be running these organisations and should instead focus on policy matters.
Reflecting on past attempts at making effective reforms to the SLTB and other State-Owned Enterprise (SOEs), he highlighted the need to detach from political orientation.
“Historically, we have suggested several mechanisms to ensure the efficiency of the SLTB based on successful models followed by other countries like Singapore. One step forward taken in this regard was during the Chandrika Kumaratunga administration, by forming the Strategic Enterprise Management Agency (SEMA). Unfortunately, it was merely done for political purposes and did not materialise successfully.
“Following this, we made several attempts in subsequent administrations to set up a strategic enterprise management commission, which would also be answerable to Parliament regarding the rate of returns earned by the relevant entities,” he added.
Prof. Gunaruwan further explained that these measures had been suggested so that inefficiencies could not be hidden. Hence, he noted that without attending to these reforms, achieving a notable change would be unlikely.
Furthermore, commenting on the suggested structure where the SLTB and private bus operations would be integrated, he noted that amalgamating and running as a common service with a suitable operative body and structures was a positive approach which had also been previously contemplated.
“Allowing individual bus owners to operate has led to competition on the road and not on quality and prices. The SLTB should be given the opportunity to better focus on crucial aspects such as supply and depot administration, operational advancement, technological development, and commercialisation in depot premises. These attempts have been made previously as well, but many strategies unfortunately died a natural death due to political issues.”
Therefore, according to Prof. Gunaruwan, these should be executed on an effective step-by-step basis.
Addressing resource gaps
The Government also recently stated that the SLTB would formulate a plan to integrate both the board and private bus operations within the next year.
Lanka Private Bus Owners’ Association Chairman Gemunu Wijeratne stated that this request had been made many years ago, as similar models could be observed in several other countries, such as India. However, according to him, it is first necessary to establish a suitable joint time schedule if this proposal is to be taken forward.
While the SLTB possesses many resources, he highlighted that the board and private buses shared some similar resource constraints as well, especially regarding human resources.
Accordingly, he noted that both the public and private entities lacked mechanics and electricians. Hence, he noted that these issues would have to be resolved while highlighting that a Public-Private Partnership (PPP) would be a viable option, adding that discussions regarding such proposals should involve people with adequate practical knowledge of the matter.
Moreover, Wijeratne stated that since the start of the Covid-19 pandemic, Sri Lanka had a deficit of 5,000 buses in the fleet for public transport, as these buses had been used to conduct other services. Additionally, there is also a waiting list for Leyland buses ordered from India due to decreased manufacturing in India. Wijeratne highlighted that these concerns needed to be addressed.
Integration and digitalisation
As the regulating body of the transport sector, National Transport Commission (NTC) Chairman Eng. P.A. Chandrapala highlighted certain regulatory aspects and several upcoming initiatives to improve the overall transport sector. He pointed to digitalisation as a key development that would be taking place in the near future.
For transport digitalisation, Chandrapala noted that the ministry had allocated Rs. 1 billion for 17 institutions related to the ministry. This will improve the quality of transport scheduling, avoid unnecessary delays, and improve payment systems, allowing for a better understanding of the sector’s financial behaviour.
Moreover, he noted that as per the provisions of the Motor Traffic Act, a driver must rest after four-and-a-half hours. Places to facilitate restaurant and resting areas for this purpose will be regulated by the NTC in accordance with Ministry of Health regulations.
“We will also implement a combined time schedule within August for both SLTB and private buses, from Colombo to Jaffna, starting operations from one place and moving in a combined schedule agreeable to all parties. This is to avoid the struggles and issues on the roads between buses. This means that the drivers should have a rest in between and we have identified several restaurants to facilitate this,” he added.
Referring to the Road Safety Action Plan being discussed, Chandrapala invited members of the public to participate in the road safety programme and urged them to write directly to the NTC Chairman or the ministry in case of any observed road dangers, providing constructive criticism.
He emphasised that from tomorrow (25) onwards, the authorities would fully concentrate on digitalisation efforts, which would make things efficient both in terms of time and finances for the entire sector.
SLTB stance
Speaking to The Sunday Morning Business, SLTB Chief Executive Officer (CEO) Mahesh Kulathilaka explained several developments underway for the SLTB, including model depots, bus fleet modifications, and addressing human resource concerns.
Based on the most recent developments, he noted that 25 model depots were to be established. The sector consists of several resources, such as large parcels of land, business opportunities, and strategic locations, but many resources remain underutilised.
He noted that this opportunity gap was currently being addressed, along with suggestions from a parliamentary advisory council. Regarding this, he highlighted a suggestion from the Minister to study business opportunities and viable business models, including details on the utilisation of fleets, roads, land, and buildings, and to approach business opportunities.
“Effective utilisation of the available resources will lead to a notable growth in revenue and the strengthening of depots and their potential. There are specific suggestions for each depot and these will be implemented. In addition, another suggestion by the Government, the establishment of a Metro Bus Unit, has been initiated, with funds allocated and the deployment of buses underway.”
Hence, he highlighted the ability to save money while also improving the GDP if the public transport sector were to be effectively improved.
In bus distribution, the SLTB has 40% ownership of buses, while the private sector holds 60%. On highways, it is a 50–50% ratio. The minimum SLTB fleet requirement is 7,000 buses to service over 7,200 timetables.
However, Kulathilaka noted that the current SLTB fleet was somewhat old and noted several instances where efforts had been made to renew the fleet. “In 2014, around 2,200 buses were purchased, and in 2018, around 325 buses were purchased for long-distance services, among other previous purchases. Hence, there are issues with the number of buses and with the purchasing.”
However, the Paris Agreement encourages a transition to zero-emission transport, including electric buses, with project proposals also being made to acquire electric buses for public transport.
“Due to this, an electric bus programme was initiated, but due to issues in documentation, the process was stopped. The SLTB then attempted to bring in 1,000 buses on an earn-and-pay basis — 600 for long-distance, 200 luxury buses for highways, 150 low-floor buses for urban cities, and 50 small AC buses — by initiating a project,” he added.
While improving the fleet, Kulathilaka noted the need to ensure financial strengthening as well. Hence, he stated that 400 bus imports had been accelerated and documented based on procurement requirements. However, he noted that no bids had been made despite this.
In terms of recent efforts, he also highlighted that funds had been allocated to modernise the old bus fleet and bring the buses to a usable condition. Of these, 600 buses are to be completed and added for transport within this year.
Moreover, according to the SLTB CEO, several labour concerns exist, affecting SLTB growth, including those concerning required labour capacity and human resource development.
“Based on research, we have identified that at least around 27,591 employees are required for the service. We are currently in the process of gaining the required approval for the process. There is also a labour gap in technical staff, which will also be addressed by requesting approvals for recruitment very soon.”
Explaining other efforts to improve the SLTB, Kulathilaka emphasised that special focus had been given to road safety. Moreover, according to him, the issues between the State and the private sector are also being addressed, one attempt being the preparation of integrated timetables.
He further explained that bus operations would also be monitored using digitalisation, ensuring convenience and safety for passengers. Due to the obstacles along the path, the improvements are expected to be gradual.