• Transaction advisers remain engaged with no clear policy directive
• New administration yet to clarify fate of SOE reforms
• 2025 Budget proposal for holding company still in limbo
• DG says Public Enterprises Dept. has received no instructions

The privatisation process of State-Owned Enterprises (SOEs) commenced by the previous regime appears stuck in a bureaucratic quagmire in the absence of a clear policy decision by the Government. 

Department of Public Enterprises Director General (DG) P.A.S. Athula Kumara stated that they were still awaiting a policy decision from the Government as to the fate of the SOE privatisation programme commenced by the previous Government. 

He further revealed that the agreements entered into with the respective transaction advisers to facilitate the divestment of the Treasury’s stake in the selected SOEs remained in force to date. 

“The agreements with transaction advisers haven’t been stopped; they still exist. They are still carrying out some functions,” he stated.

In 2023, the former Government appointed the International Finance Corporation (IFC), the World Bank’s investment arm, as the transaction adviser to assist in the divestment of the Government’s controlling stake in SriLankan Airlines, Sri Lanka Telecom PLC, and the Lanka Hospitals Corporation PLC.

The Department of Public Enterprises Director General further revealed that despite the announcement made in the 2025 Budget to set up an SOE holding company, the department had not received any instructions in this regard to date.

In 2023, the previous Government had announced that it was looking to establish a holding company for Sri Lankan SOEs, which was expected to function in a manner similar to Singapore’s Temasek Holdings Ltd. 

Accordingly, it was revealed at the time by former Head of the SOE Restructuring Unit (SOERU) Suresh Shah that they had already commenced the drafting of the articles of association of this proposed holding company for the purpose of setting it up and that the holding company would be incorporated once the process was completed.

However, Kumara was unable to confirm whether or not the Government intended to continue the same process commenced by the previous Government or whether it would commence the incorporation process of the proposed holding company from scratch. 

“We haven’t been informed of anything in that regard. Our department has no knowledge about this,” he stated.

During the 2025 Budget speech, President Anura Kumara Dissanayake, as the Minister of Finance, stated: “A key requirement to reduce future financial risk emanating from SOEs is to improve SOE governance. Towards this end, a holding company under the full control of the Government will be established, under which selected SOEs are held as subsidiaries with a view to improve governance, financial discipline, and operational efficiency.”