Tuesday, 22 October 2019 07:24

Treasury takes tough stance on state-owned enterprises

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Sri Lanka’s State-owned Enterprises (SOEs) numbering 422 will be reinvigorated under the Statement of Corporate Intent (SCI) mechanism now in full operation.

The SCI mechanism is aimed at enhancing the operational, financial and service delivery performances of the SOEs within the agreed period in line with the macroeconomic policy framework of the government.

SCI is a tripartite agreement, signed by the Secretary to the Ministry of Finance (MOF), Secretary of the relevant line Ministry and the Chairman of the respective SOE on behalf of the Board of Directors with the mission of creating a platform for SOEs to operate in a commercially viable manner.

Initially SCI agreements have been signed with 05 SOEs on March 15, 2017 and subsequently another eight (08) SCI agreements were signed with SOEs on June 10, 2019. The SCIs are expected to be gradually introduced to other SOEs as well.

The SCI concept needs to be strengthened by establishing systems and procedures for its better implementation and achievement of the expected outcome of the project, Treasury Secretary Dr. R.H.S. Samaratunga stated in a Public Enterprises Circular recently.

Accordingly the Treasury has issued a guideline in order to facilitate and monitor the SCI process.

It will provide clarity to SOEs regarding the expectations with respect to the role and responsibilities of stakeholders directly involved in the process. Performance focus of SOEs should be anchored on profitability, ideally self-funding and minimise their reliance on fiscal support.

(LI)

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