State-run utilities agencies need reform to be competitive: Harsha
12 June 2015 02:32 am
By Chandeepa Wettasinghe
State-run utilities agencies and enterprises could be facing segmentation and privatization under a UNP-led national government, according to Policy Planning and Economic Affairs Deputy Minister.
“Reforms have to take place in service delivery of utilities and public services in general. The monopolies must be broken and made more competitive. We’re committed. Seriously committed,” Dr. Harsha de Silva said.
He expressed that this falls within the social market economy that he has been advocating since regime change.
However, this appears to be a new development, since Finance Minister Ravi Karunanayake, on the day of the budget, and as recently as last month, said that state-owned enterprises will not be privatized.
He had held that state institutions will be made profitable within 2 years, or shut down.
Renowned economist Dr. Indrajit Coomaraswamy had taken a stand against maintaining the status quo of the state-owned enterprises, hoping that the new regime would not be ideologically hampered like the previous regime.
It is a critical issue, as the Ceylon Electricity Board had incurred Rs. 22 billion in loss for 2014, in addition to accumulated losses, while SriLankan Airlines has incurred a loss of US$850 million since 2011 when the management was brought back under state control from Emirates.
Meanwhile, Karunanayake recently also said that the government will continue to become a job creator.
However, both Dr. de Silva, and Investment Promotions and Highways Deputy Minister Eran Wickramaratne have strongly opposed the stance, citing that state jobs would never be productive, and that employees would treat work hours as holidays.
Leading economists across the country too have criticised the state sector, and the undeserved pay rise given in the interim budget despite the continually falling productivity.