• Dr. Harshana Suriyapperuma discloses multiple plans for SOEs
• Says ‘core’ of the public sector is efficient, yet getting to core is difficult

Amidst the announcement of plans to abandon the privatisation of several loss-making state-owned enterprises (SOEs), including SriLankan Airlines, while still dealing with a massive annual expenditure and a comparatively lower revenue collection, Finance and Planning Deputy Minister Dr. Harshana Suriyapperuma stated that the government does not view SOEs as a burden to the country.

“Our strategy is a balanced one. We do not view SOEs as a burden but rather as potential value creators. Some SOEs will continue under government ownership, while others will be privatised or transitioned into hybrid ownership models such as public-private-people (PPP) partnerships,” Suriyapperuma said.

He disclosed this during the last session of the Sri Lanka Economic Summit, a two-day event that was conducted by the Ceylon Chamber of Commerce (CCC), last evening (29).

“Our objective is to assess well-governed state entities and explore whether their value can be expanded through private-sector investment. Some SOEs may already be profitable but may not have fully realised their potential in terms of operational scale, profitability, or market expansion.”

Answering the question about the overpopulated state staff sector, Suriyapperuma said that they recognise that streamlining the workforce is a difficult task, but have taken initial steps.

“For example, we have suspended new public sector recruitment as a first step. My personal experience suggests that when we reach the core of the public service, efficiency improves. However, getting to that core is a challenge because of the excessive layers of bureaucracy that exist. Documents are often passed around multiple departments, creating unnecessary delays. Addressing these inefficiencies is a complex issue, but one that must be tackled.”

According to the Finance Ministry, 52 SOEs in Sri Lanka recorded a financial turnaround, shifting from a collective loss of Rs. 740 billion in 2022 to a profit of Rs. 340 billion in 2023 following the implementation of key reforms.

On the other hand, the government announced that it has abandoned plans to privatise the loss-making national carrier, SriLankan Airlines. According to the Ministry of Finance, while the national airline reported an operating profit for the period from April 2022 to March 2023, its accumulated debt remains at $ 1.2 billion.

Under the previous privatisation plan, the government intended to retain a 51% stake in the airline while selling the remaining 49% to investors.

This is not the first SOE the Government has decided not to privatise but also several other enterprises including the privatisation of the National Livestock Development Board (NLDB) and Milco Ltd.