Sri Lanka is preparing to divest and restructure state-owned enterprises (SOEs) under a planned legal framework, Deputy Minister of Finance and Planning Anil Jayantha said.
He was speaking at an industry forum hosted by the Securities and Exchange Commission of Sri Lanka and the Colombo Stock Exchange (CSE). Jayantha said a dedicated committee has been appointed to review public enterprises and draw up restructuring strategies.
Of the 527 entities tagged as state enterprises, only a select few are genuine commercial businesses, he said. Many of the others perform administrative functions under specific statutory criteria.
“Some of these SOEs really we can divest, sometimes we may have to merge,” Jayantha said.
He said the state has no interest in basic business operations such as trading or running hotels, and would prefer to focus on regulation and economic facilitation. The government will keep ownership in strategic utility sectors such as energy, he said, to prevent manipulation by private markets.
Background
State-owned enterprises cover a wide range of bodies in Sri Lanka, from utilities and banks to commercial companies and institutions that carry out administrative work. The figure of 527 entities tagged as state enterprises shows how broad the category is, and Jayantha’s remarks suggest that the label covers bodies with very different purposes.
Jayantha said commercial state enterprises and state banks would be moved away from traditional bureaucratic controls towards competitive corporate models. Under the proposed holding structure, state companies would receive managerial autonomy so they can respond to market conditions.
“New SOE Act would facilitate, would allow separate management so they can be reorganised under one umbrella. So, those organisations would be incorporated as limited liability companies,” he said.
He added that reformed entities could be listed on the stock exchange to attract private and foreign investment.
What it means
For the public, the plan points to changes in how some state-run services and businesses are managed, and potentially in who owns them. Jayantha said the government would keep control of strategic utilities, so energy would stay in state hands.
The timing is not settled. Authorities had initially aimed for Parliament to pass the new law by the end of this year, but Jayantha said that schedule could slip because of backlogs at the Legal Draftsman’s Department.
“First, we need to get it cleared from the Legal Draftsman’s Department; if that is the case, at least we can submit to the Parliament, maybe that could be next year,” he said.
He said administrative reforms take time, and that moving steadily would build sound institutional foundations for Sri Lanka’s economic transformation. Until the bill is drafted and presented to Parliament, the detail of which entities would be sold, merged or incorporated remains to be set out.
