Ceylon Chamber urges all political parties to support continuity of SOE reforms

Ceylon Chamber of Commerce Chairman Duminda Hulangamuwa 

• Says vital to prioritise and implement reforms related to SOEs, energy, and fiscal management, to ensure that the country does not revert to crisis
• Insists it is crucial all political parties focus on Sri Lanka’s long-term sustainability and avoid leveraging reform process for short term election gains
• Highlights importance of implementing market-based pricing and enhancing accountability within SOEs to prevent corruption and inefficiency
• Ceylon Chamber call comes after SLPP leader and former President Mahinda Rajapaksa urged interim Government to halt sale of SOEs until elections are concluded
• SRU last month said divestiture of initial 6 SOEs other than SriLankan Airlines will be concluded by August

The Ceylon Chamber of Commerce yesterday urged all political parties to support the continuity of State Owned Enterprises (SOE) reforms and the reform momentum, building on the economic stability achieved.

Issuing a statement, the Chamber stressed that it is vital to prioritise and implement the reforms related to SOEs, energy, and fiscal management, to ensure that the country does not revert to a crisis. It is crucial that all political parties focus on Sri Lanka’s long-term sustainability and avoid leveraging the reform process for short term election gains.

“SOE reforms will enhance the Government’s fiscal outlook through better performance, productivity and accountability,” the Ceylon Chamber said, adding “Historically, inefficiencies and a lack of accountability in SOEs have led to significant financial burdens on the Government, contributing to economic crises and the misallocation of resources.”

The Chamber also highlighted the importance of implementing market-based pricing and enhancing accountability within SOEs to prevent corruption and inefficiency. Effective reforms will ensure these enterprises are sustainable and competitive in the long run, reducing the risk of future economic turbulence.

 

“The Chamber calls on all political parties to constructively support these vital initiatives. Clear communication and public understanding are crucial to the success of these reforms. The Ceylon Chamber of Commerce remains committed to advocating policies that promote economic stability and growth, fostering a prosperous future for Sri Lanka,” the statement added.

The Ceylon Chamber’s statement was an apparent response to Sri Lanka Podujana Peramuna (SLPP) Leader and former President Mahinda Rajapaksa’s appeal to the Government last week to suspend the sale of SOEs until elections are concluded. (See https://www.ft.lk/top-story/Mahinda-calls-for-halt-of-SOE-sales-until-Presidential-poll/26-761727).

Rajapaksa alleged that the Government plans to sell certain national assets has given rise to widespread discontent and that since the current regime is a mere interim arrangement the divestiture of State assets now may not yield best outcomes. He also stressed any restructuring of SOEs should take place with maximum transparency.

The State Owned Enterprises Restructuring Unit (SRU) last month said the divestiture of the initial set of SOEs other than SriLankan Airlines will be concluded by August 2024. The timeline for SriLankan Airlines is likely to extend to end-September 2024.

In March 2023, the Cabinet of Ministers granted in-principle approval for the divestiture of shares held by the Government of Sri Lanka (GoSL) in Hotel Developers (Hilton Colombo), Canwill Holdings (Hyatt), Lanka Hospitals Corporation, Sri Lanka Telecom, SriLankan Airlines, Litro Gas, and Sri Lanka Insurance. Following GoSL’s procurement processes, Transaction Advisors (TA) were appointed for these entities.