By Colombo Investors Eye Loss-Making SOEs as Government Moves Towards Stock Market Listings
The Sri Lankan government is set to restructure and potentially privatize several loss-making State-Owned Enterprises (SOEs), with plans to introduce them to the Colombo Stock Exchange (CSE). President Anura Kumara Dissanayake confirmed that his administration is conducting a study to determine how these enterprises can be merged, restructured, or partially privatized through a holding company model.
Speaking at the Colombo Economic Summit organized by the Ceylon Chamber of Commerce, President Dissanayake emphasized that the government is not approaching these entities with outdated perspectives. He acknowledged that some SOEs, particularly in the construction sector, had been necessary at their inception but are now redundant due to a well-developed private sector. The government is now evaluating which entities should be closed, merged, or restructured to improve efficiency.
“Multiple state institutions are operating within the same sector, leading to inefficiency. Therefore, these institutions must be consolidated to ensure better management and resource allocation,” the President stated.
Deputy Minister of Finance and Planning, Dr. Harshana Suriyapperuma, echoed these sentiments, explaining that the government sees SOEs not as a financial burden but as potential value generators. He outlined a strategy where certain SOEs would remain under government control while others would transition into hybrid ownership models, including public-private partnerships (PPP).
The financial performance of SOEs has shown significant improvement following reforms. According to Finance Ministry data, 52 SOEs reported a turnaround, moving from a collective loss of Rs. 740 billion in 2022 to a profit of Rs. 340 billion in 2023. This shift has strengthened investor interest in the restructuring process, with many anticipating new opportunities in an open and competitive market.
While final decisions are still pending, Colombo’s investment community is closely monitoring developments as the government moves forward with its restructuring plans. If executed effectively, these reforms could lead to a more sustainable and competitive economic environment in Sri Lanka.
