SOEs Restructuring Unit to study and make recommendation on SriLankan Airlines
The State-Owned Enterprises Restructuring Unit, established under the Ministry of Finance will be assigned to study the methodology of restructuring the national carrier SriLankan Airlines and make recommendations to the Cabinet of Ministers.
This action has been taken following a revelation made by President Ranil Wickremasunghe that the Government was looking at raising $ 3-4 billion via sale of certain State-Owned Enterprises (SOEs) to boost foreign reserves.
He told the AGM of the Sri Lanka Tea Factory Owners Association on Sunday that a big public sector did not help Sri Lanka to grow fast, and the Government was looking at restructuring SOEs. .
The new unit, established under the Ministry of Finance, Economic Stabilization & National Policies, will be assigned to study the methodology of restructuring the national carrier SriLankan Airlines and make recommendations to the Cabinet of Ministers, the government said .
At its meeting held on Monday (Oct. 31), the Cabinet of Ministers decided to handover the responsibility of studying the methodology of restructuring SriLankan Airlines and making recommendations to the said unit.
The decision was reached after taking into consideration the resolutions furnished by the Minister of Port, Shipping & Aviation.
The government stated that it has recognized the need to restructure SriLankan Airlines and its subsidiary companies by handing over a considerable amount of shares and the management of the entity of SriLankan Airlines to investors selected through a transparent procurement process.
In an attempt to improve the overall performance of the State Owned Enterprises (SOEs), action has been taken to towards the establishment of a new unit to restructure troubled Government-operated agencies.
The move was an immediate realization of a proposal from the recently approved mini-Budget, for which the Government allocated a total of Rs. 200 million for the implementation of it.
It was proposed to re-activate the Statement of Corporate Intent (SCI) process for 50 key SOEs, excluding the Ceylon Electricity Board (CEB), the Ceylon Petroleum Corporation (CPC), and the national carrier— SriLankan Airlines, as they are under different efforts to restructure to closely monitor the set targets.
The objective of the new unit is to help to identify ways to reduce the financial burden on the Treasury and to provide necessary guidance and support in the restructuring process of the SOEs.
“The performance of State-owned commercial enterprises has not been satisfactory for a long time and some SOEs are incurring losses due to various reasons,” a statement of weekly Cabinet Decisions issued by the Government Information Department noted.
It also added that this situation has led to severe pressure on the Treasury, and thus an alternative mechanism should be introduced for the efficient and effective functioning of Government-operated businesses