The Ministry of Finance, Planning and Economic Development has said the liquidation of 33 selected State-Owned Enterprises (SOEs) is under way.

The process is overseen by a State-Owned Enterprise Reform unit set up under Cabinet approval in March, the ministry said in an update.

The ministry said that, in line with proposals in the 2026 Budget, the Treasury is also settling long-standing liabilities of selected state-owned enterprises. These cover Employees’ Provident Fund (EPF), Employees’ Trust Fund (ETF) and gratuity payments owed to staff.

A total of Rs. 5 billion was allocated for this purpose. Of that, Rs. 2.8 billion had been fully disbursed by the end of August 2026, the ministry said.

The ministry also reported on the performance of the larger state companies. It said 51 major SOEs recorded a combined profit of Rs. 259.3 billion in the first six months of 2026.

That is Rs. 31.5 billion more than the Rs. 227.8 billion combined profit recorded in the same period of 2025.

The ministry said the profit was earned despite severe second-quarter difficulties linked to conflicts in the Middle East. It listed rising raw material costs, supply chain disruptions and order cancellations as the main problems.

Background

State-owned enterprises include the loss-making and profitable firms that the government owns in sectors such as energy, transport, finance and manufacturing. For years, losses at several of them have been met from public funds, and reforming them has been a stated priority of Sri Lanka’s economic recovery programme, which is supported by the International Monetary Fund (IMF).

The EPF and ETF are retirement and savings schemes into which employers pay contributions for their workers. When an employer fails to pay in full, employees can be left waiting for money that is legally theirs. Gratuity is a lump sum paid to a worker on leaving a job after a qualifying period of service.

Liquidation is the legal process of winding up a company, selling its assets and settling what it owes. In the case of a state enterprise, it normally ends with the company ceasing to operate.

What it means

For current and former employees of the enterprises concerned, the Treasury payments are intended to clear unpaid EPF, ETF and gratuity dues. The ministry did not say which enterprises have received money so far, or how the remaining Rs. 2.2 billion will be paid out.

For taxpayers, the ministry’s figures describe the balance between the profits of the 51 larger enterprises and the cost of winding down others. The ministry did not name the 33 enterprises in its update.