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Thursday, 16 March 2017 00:10 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
As part of the restructuring of state-owned enterprises (SOEs) in line with growing market trends and broad-basing ownership, the Government expects to raise around $ 1 billion by listing non-strategic enterprises on the capital market this year.
Finance Minister Ravi Karunanayake yesterday said the target was to raise roughly about $ 1 billion by way of listing non-strategic enterprises such as the Hyatt, Grand Oriental Hotel, Waters Edge, Hilton and Lanka Hospitals on the stock exchange.
However, he declined to provide a timeframe for the listing of these firms although the International Monetary Fund (IMF) in its latest evaluation had flagged decreasing reserves and the Government is preparing to repay $ 2.6 billion in debt this year. “We are not in a hurry to do so but we only want to show that our intent is correct.”
He assured that the Government had made a firm decision to have 51% controlling rights of the non-strategic enterprises in the commercialisation process and dismissed claims of privatisation.
“We will not allow the controlling rights to go out. The Government has taken a firm policy decision where the President and Prime Minister are very particular about this.”
The Government also signed Statements of Corporate Intent with five large SOEs including the Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC), National Water Supply and Drainage Board (NWS & DB), Airport and Aviation Services (SL) Ltd. (AASL) and the Sri Lanka Ports Authority (SLPA) aimed at improving efficiency to achieve the country’s economic goals by enhancing the contribution made to its GDP.
He said the move was expected to encourage and facilitate these SOEs to improve operational and financial efficiency 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.
Noting that there were 403 state entities and around 20 subsidiaries, of which around 200 were making losses, Karunanayake pointed out that the Coalition Government had reduced them to about 50 at present.
“At the moment the concept is that the Government passes the ball to the politician and eventually the taxpayer pays for it. As a responsible Government, we will not allow that to take place,” he added.
When asked about not meeting the net international reserves (NIR) targets set out by the International Monetary Fund (IMF), the Minister said that they would get them rectified and believes that the reserves will come back. “Except NIR, all targets will be met without a problem by the end of June.”
Treasure Secretary Dr. R.H.S. Samaratunga yesterday revealed that around 15-20 state-owned enterprises (SOEs) have neglected to pay their EPF and ETF contributions amounting to Rs.15 billion in 2015.
In a hard-hitting speech at the Finance Ministry where Statements of Corporate Intent (SCI) tripartite Memorandums of Understanding (MOUs) with five large SOEs were signed, the Treasury Secretary said the performance of many public sector organisations were unsatisfactory.
“The senior management has forgotten that salaries come from the tax collected from the public and some of these administrations have ignored paying EPF and ETF. There is an outstanding amount of around Rs. 15 billion, which has not been transferred to the Central Bank,” he stressed.
According to the Secretary, out of 100 requests from SOEs, 95 of them are for additional funds. Therefore he emphasised that these institutions at least need to try reaching the break-even point.
Dr. Samaratunga said that the Department of Public Enterprises was in the process of analysing the results of these institutions in order to chart its future path towards success.
“Our aim is to expand the SCI initiative to more SOEs in the future,” he added.
