38 state firms swallow over Rs.100 bln in tax moneyView(s):
The performance of most of Sri Lanka’s 74 State- owned Business Enterprises (SOBEs) continues to reflect operational deficiencies eating up more than Rs. 100 billion of tax payers’ money per annum, government officials said.
Some 38 SOBEs depend on the Treasury for both capital and recurrent expenditure and such financial assistance has amounted to Rs. 102 billion in 2010, 2011 and 2012, a senior official of the Finance Ministry said. The performance of these entities has been affected due to the limited capacity to adjust output prices to reflect market conditions and profitability and inadequate competencies in corporate management, he disclosed.
Other operational deficiencies are the lack of proper business models with a long term vision, and the inability to separate the business focus from welfare objectives and development.
The government is pursuing various initiatives including re-structuring and changing management of some of these entities to make them viable in the next two to three years, the official said.
There are a total of 74 SOBEs and all are required to contribute at least 30 per cent of profits or 15 per cent of its equity to the Treasury annually in accordance with the government’s policy. Accordingly the SOBEs should have at least contributed Rs.100 billion to the government, he said. However the government received only around Rs. 34 bilion in 2012 as dividends and levies from 36 SOBEs only, he revealed.
Most of these companies compete with the private sector except in petroleum (refinery), power, water, lotteries, aviation (airport) and minerals.
Out of the 74 SOBEs, 27 are enterprises engaged in residual businesses left with the state after privatisation of major activities prior to 2005.
These state enterprises play a dominant role in banking, insurance, power and energy, water, ports, aviation, commuter transport, media, lottery, pharmaceuticals, fertilizer, hotels, construction, mineral and trading sectors, etc.
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