State Owned Enterprises (SOEs) cost the Sri Lanka economy Rs. 107.1bn in 2012. The total loss for the 55 SOEs is a 49% increase on the 2011 figure, and a staggering 432% increase on 2005, when the companies contributed a profit of Rs. 32.3 billion. According to the Treasury annual report released on Monday, banking and financial institutions have made profit, but “other large enterprises” have failed, despite significant investment from the government. The report recommends that ”expansions in the state enterprises should be supported with various reforms such as allowing greater commercial freedom, ensuring the appointment of competent managerial staff and improving corporate best practices and accountability through the boards of directors and senior management personnel.”
Treasury secretary Dr. P. B. Jayasundera also said that the government needs to stop making political appointments and instead appoint quality candidates to run SOEs. “These officials should be removed and replaced by competent officials”, he insisted. “The Treasury is not the appointing authority. It is up to the government to take this matter seriously. Policy makers need to put party politics aside and assume the role of custodian. These SOEs have the potential to reap good profits. We need officials who will put the interest of the country first.”