SOBEs cause heavy debt burden to the country

Sri Lanka’s State owned Business Enterprises (SOBEs) have recorded mixed performances during the first four months of this year with Ceylon Electricity Board ( CEB) and Ceylon Petroleum Corporation (CPC) incurring losses during this period in comparison to the first four months of 2016, mainly due to the dry weather conditions which prevailed in 2017 and 2016,

This was revealed in the Finance Ministry’s mid-year fiscal position report 2017 released recently.

In this background, the government policy of strategic reorientation of SOBEs with a view to improving their financial position and service delivery resulted in the signing of Statements of Corporate Intent (SCI) with five selected key SOBEs.

They are CPC), CEB , National Water Supply and Drainage Board (NWS & DB), Airport and Aviation Services (Sri Lanka) Ltd (AASL) and Sri Lanka Ports Authority (SLPA).

The government is to set in motion the overhaul of the country’s bloated SOBEs on a case-by-case basis in a bid to display its commitment to change despite the economic slowdown, according to Ministry Deputy Minister Eran Wickremaratne

The expected results of the SCIs are to operate SOBEs as budgetary independent institutions in a commercially viable manner. It will also, improve the practices of corporate governance, the use of efficient financial management practices while, strengthening the human resource management.

Another aim is to, change the operational culture and reengineering the business process and ensure efficient and effective business operations and generate a reasonable return on investment.

According to the Ministry report, the outstanding debt to banks of 42 non-financial SOBEs increased by 17 per cent to Rs. 889,132 million during the first four months of 2017 from Rs. 758,160 million recorded at the end of 2016.

The CEB has an outstanding debt of Rs.31.74 billion, CPC Rs. 38.25 billion, SLPA Rs. 23.76 billion, NWS & DB Rs.42.26 billion, AASL Rs. 38, 52 billion and Sri Lankan Airlines Ltd Rs. 91.58 billion.