Department of Public Enterprises of the Finance Ministry said yesterday that the government will be signing Statement of Corporate Intents (SCIs) with selected state owned enterprise (SOEs) today.
A recently released International Monetary Fund (IMF) statement stressed the immediate need to finalise and publish SCIs for large SOEs to enhance the transparency and accountability in the reform process Sri Lanka has embarked upon. A Department of Public Enterprise statement said the move has been approved by the Cabinet of Ministers on February 28 and the five SOEs selected to sign SCIs are: Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC), National Water Supply and Drainage Board (NWS&DB), Airport and Aviation Services (SL) LTD (AASL) and Sri Lanka Ports Authority (SLPA).
Through this process the government expects to improve the operational and financial efficiency of these SOEs through improved corporate practices, innovative financing, strong and prudent financial management, exposure to competitiveness and international best practices and effective human resource management while enhancing public accountability.
SCI is a tripartite Memorandum of Understanding (MOU) to be signed by Secretary to the Ministry of Finance (MOF), Secretary of relevant line Ministry and the Chairman on behalf of the Board of Directors of the respective SOBEs.
The effectiveness of the SCI process will depend fundamentally on to what extent that the SCI will be used as their own management tool by the selected SOBEs and the line Ministries.
SCI includes key performance indicators (KPIs) link to corporate plan, action plan and annual budget of the SOEs for three years’ time horizon stating from year 2017. In addition, the impact of all non-commercial operations by the SOBEs are also taken in to the account and included to SCI.
On the success of the implementation of this initial programme, the government is expecting to extend this move for the other SOEs as well. Sri Lanka is said to have over 350 SOEs.