SOE reforms must continue or debt restructuring advantages may be lost

State owned enterprises reforms must continue without interruptions or the benefits that were obtained from the debt restructuring process would be useless, Chief Executive Officer of Advocata Institute Dhananath Fernando said at ‘Unlocking Economic Potential: Why Debt Restructuring Alone Won’t Suffice without SOE Reforms’ event yesterday.

He said that the government annually has to pump in billions to keep these institutions up and it is not viable to continue this traditional process. “The economy cannot grow like this and the process should not stop due to elections.”

Fernando also said that the government is also seen engaging in several ‘unwanted businesses which they can forgo. He said that the government by doing and engaging in ‘uncalled for businesses’ 52 institutions have suffered annual losses amounting over Rs. 6.6 billion.

“Why should the government engage in business when they anyway get a share of profits from all businesses done in Sri Lanka by way of 30% tax,” he asked. He said that some of the huge loss making State entities say that they made profits but actually this was because the government pumped in huge amounts of handouts to them.

For example he said, “The Water Board made a net profit of LKR 5.2 billion in 2023 as opposed to a loss of LKR 2.7 billion in 2022. However, the General Treasury contributed LKR 28 billion as equity for the repayment of loans of the local and foreign funded projects in 2023. SriLankan said they made a profit before tax of LKR 7.3 billion in the year 2023/24 as opposed to a loss after tax of LKR 73.6 billion in 2022/23. However, in March 2024, the government decided to take over 210 million in dollar loans and 41.4 billion in rupee loans taken by the airline from the State run Bank of Ceylon and People’s Bank.” (SS)

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