SOE transactions to end by August: Restructuring Unit

• Timeline for SriLankan Airlines likely to extend to end September 2024
• Asserts SOE reforms non-negotiable

The State-Owned Enterprise Restructuring Unit (SOERU) yesterday said it expects all transactions, other than that of the national carrier to be concluded by August 2024.

The timeline for SriLankan Airlines is likely to extend to end September 2024.  

The SOERU asserted that if the underperforming, debt-ridden, Sri Lankan economy is to transition into a competitive, dynamic and prosperous environment, SOE reforms are non-negotiable. 

“These reforms will ensure that resources are released for investment in essential but under-resourced public service obligations such as education, healthcare, energy, transportation and digitisation. 
“Without these reforms public funds will continue to be wasted on poorly managed entities that, in the first place, don’t need the state’s involvement,” the SOERU said in a statement.

The SOERU shared that in parallel to the divestiture process, work has been done to set up a structured, efficient and well governed process to manage the SOE sector going forward. 

This is part of the overall reform programme of the government and aims to transform SOEs in to well governed, competitive and financially disciplined entities that provide citizens with essential goods and services effectively and efficiently without being a drain on public finances. An SOE Reforms Policy based on these objectives was approved by the Cabinet of Ministers in May 2023. 

At the heart of these reforms is the setting up of a 100 percent State-owned Holding Company that in turn will hold all of GoSL’s shares in commercial businesses. The policy includes a sound mechanism to ensure the appointment of qualified, experienced and capable persons to the boards of both the Holding Company and SOEs. 
Similarly, it lays down principles and policies around governance, financial discipline and disclosures which the Holding Company and all SOEs will need to adhere to. 

“Work is currently on-going to draft a Public Commercial Businesses Act to give legal effect to these reforms,” the SOERU said.

It added that many stakeholder briefings and consultations were undertaken in order to fine tune the broad SOE reform agenda and to convey information on the divestiture process.