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SLPP Leader and former President Mahinda Rajapaksa
Sri Lanka Podujana Peramuna (SLPP) Leader and former President Mahinda Rajapaksa yesterday urged the current regime to postpone all moves to sell national assets and state-owned enterprises until a new Government is formed following the Presidential election.
Issuing a statement, Rajapaksa said the Government’s plans to sell off certain national assets and State-owned enterprises (SOEs) have given rise to discontent among trade unions, political parties and the general public.
He pointed out that the current Government is an interim arrangement, established to govern the country for the remainder of former President Gotabaya Rajapaksa’s term. Rajapaksa said even those advocating for privatisation should recognise that hastily divesting state-owned assets during this period may not yield the best outcomes for the country.
With the next Presidential election just a few months away, the former President therefore proposed a postponement of all efforts to sell state-owned assets or enterprises. This delay, he suggested, would help alleviate widespread discontent over the Government’s divestiture initiatives. Instead, he recommended that the new government elected after the Presidential election handle these matters according to their electoral mandate.
Recalling his tenure as President from 2005 to 2015, Rajapaksa highlighted that he did not privatise any state-owned enterprise.
“In fact, my Government actually re-acquired some state-owned enterprises such as the Insurance Corporation, and Lanka Hospitals that had been sold off by the previous Government and these enterprises continue to make profits for the State to date,” he said.
The former President said his Government had a pragmatic approach towards state-owned assets and enterprises if a state-owned enterprise was making profits and providing a good service to the public.
He said a Government may make strategic decisions to manage prices of goods or services instead of opting for privatisation. “We had no difficulty in paying off our debts or meeting the costs of the subsidies we maintained and nobody even spoke of privatisation when I was President,” he noted.
The former President warned that the divestiture of certain sectors can have far-reaching consequences for the country especially when foreign parties are involved. He said therefore it is an issue that has to be approached with caution.
Rajapaksa stressed that any restructuring of state-owned enterprises should take place with maximum transparency, according to a national plan, in a manner consistent with national security and in consultation with the employees.
He suggested that when Government properties or enterprises are underutilised or performing poorly, involving the private sector could be a strategic move to revitalise them. Similarly, if a profitable state-owned enterprise requires additional investment for expansion, and Government funding is insufficient, offering shares in exchange for private investment could be a viable solution. Additionally, he proposed that when an investor is willing to establish a new enterprise, granting shares in the venture to the investor could create a new state asset.
He observed that certain political parties advocate for a rigid approach to privatisation, aiming to privatise virtually all possible entities. He noted that many trade unions exhibit a similarly dogmatic stance, vehemently opposing any private sector involvement in state-owned enterprises. The former President cautioned against both extremes, highlighting their detrimental impact on the country.
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.
