SOE Restructuring Unit Director General Suresh Shah

The SOE Restructuring Unit (SRU) yesterday insisted that reforms involving State-owned enterprises are “non-negotiable” and efforts are underway to transform these entities for the better.

“If the underperforming, debt-ridden, Sri Lankan economy is to transition into a competitive, dynamic and prosperous environment, SOE reforms are non-negotiable,” SRU said in its statement.

 “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,” it added.

In parallel to the divestiture process, SRU said 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 program of the Government and aims to transform SOEs into 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,” SRU said.

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% 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.

SRU also said 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. Discussions were held with leaders of the main political parties, trade unions, religious leaders and media professionals. Professional bodies such as the Institute of Chartered Accountants of Sri Lanka, Sri Lanka Institute of Engineers, Sri Lanka Institute of Development Administration and the Organisation of Professional Associations of Sri Lanka were also briefed at sessions open to their members. The general public was kept informed through a number of television and newspaper interviews undertaken from time to time whilst interactive sessions with youth groups were held in Colombo, Kandy, Galle, Kalutara, Matara, Kurunegala and Gampaha districts, SRU added.

More in-depth information is available at SRU website https://sru.gov.lk/

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