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Thursday June 8th, 2023

Muditha Peiris on the Importance of Public Sector Reforms in Sri Lanka

Muditha Peiris Chairman and CEO of Litro Gas

The Chairman and CEO of Litro Gas shares insights on infusing professionalism and accountability into Sri Lanka’s public sector and positioning Litro Gas as a driver of innovation and productivity and an enabler of a sustainable economy.

Muditha Peiris, Chairman and CEO of Litro Gas, emphasizes the importance of public sector reform, especially in StateOwned Enterprises (SOEs), to lead the change in increasing efficiency, productivity, and transparency. In this interview, Peiris discusses the critical components of public sector reforms, such as infusing professionalism and accountability, to improve the efficiency and effectiveness of the public sector in delivering services to the public. He shares his thoughts on the challenges of aligning people and changing mindsets and outlines his approach to building trust and confidence among his team. He also shares his outlook for the economy and envisions the future economic model of Sri Lanka as one that fosters innovation to create competitive platforms to compete and create markets. Peiris also shares his vision for the future, on how Litro is placing people, the planet and profit at its core as it drives industry, enterprise, and innovation to increase national productivity.

As the focus on public sector reforms, especially SOEs is of vital importance if Sri Lanka is to sustain a transformation of the economy, what are your thoughts on public sector reforms including infusing professionalism and accountability?

Public sector reforms are essential for a country to enhance its economic growth and development. In Sri Lanka, State-Owned Enterprises (SOEs) play a significant role in the country’s economy. Therefore, it is crucial to reform the public sector, especially SOEs, to lead the change in increasing efficiency, productivity, and transparency. More importantly, this is required to rebuild the trust and confidence the people of the nation had in the system and that forms the backbone to serve the people of this nation. Whilst it is true SOEs serve all citizens, it is equally true that income is unequally distributed, and therefore there is an onus on SOEs to play their part efficiently for there are segments of society that depend on it for survival. State support, however, is not a defensive position. SOEs must equally play a pivotal role in spearheading effectiveness in national transformation for the competitiveness of the nation.

To achieve such a state, one of the critical components of public sector reforms is infusing professionalism and accountability into the public sector. Professionalism ensures that public sector employees have the necessary skills and knowledge to perform their duties efficiently and effectively. Accountability, on the other hand, ensures that public sector officials are responsible and answerable for their actions and decisions. By infusing professionalism and accountability, the public sector can improve its efficiency and effectiveness in delivering services to the public. It can also increase public trust and confidence in the government, leading to a more transparent and accountable public sector.

In Sri Lanka, the government has taken steps to reform the public sector and improve professionalism and accountability. For example, the government has implemented a performance management system, which includes performance agreements for senior public officials. The system aims to hold officials accountable for their performance and ensure that they meet specific targets. Moreover, the government has established the National Procurement Commission to oversee public procurement and ensure transparency and accountability. The Commission has the power to investigate and take action against any irregularities in the procurement process.

If the system delivers the right people, with the right know-how and ability to transform the industry, Sri Lanka as you say has a bright future. We have within the system the right minds and expertise to do great things. More is needed in terms of SOE public transformation, but we have a start, and I am hopeful for the future.

As the Chairman of one of the critical SOEs in the country, how would you support any reform programmes? How do you envision transforming Litro into a role model for the public sector and SOEs?

We take everything on its merit. Transformation and change management are not easy. There are several levels to it and we are dealing with people, emotions, fears and legacy thinking.

Where LITRO is concerned a lot has been done. Beginning from building a strong sense of identity and pride in the company, to recognizing the best minds and building strong teams that have the ability to deliver at a very high level. Building a thinking culture, a transformation culture, a result-oriented culture, all this must coexist within a system of quick decision-making, flexibility to respond and yet embrace control and transparency-based best practices. This is easier said than done, but we are doing well in building such a balance and culture.

What are the biggest challenges to aligning people and changing mindsets? What is your approach?

Trust. Trust the people you lead. Know their apprehensions, Let them be a part of the solution and reward success. Most importantly, keep the lines of communication open, keep trust and confidence at a level they believe and provide all the training and support needed to make this transformation possible.

What is your outlook for the economy and what do you envision the new economic model to look like?

There is no silver bullet for overnight transformation. One step at a time, but with the right policies and intent in place Sri Lanka is unstoppable. We are blessed with certain national capabilities and resources that have the capacity to create markets, but these resources and energies must be focused upon and used with vision.

What does the future economic model look like?

Sri Lanka must foster innovation. It is only by creating markets, brands and efficiency in support services through Innovation that Sri Lanka can create competitive platforms to compete and create markets. The most successful nations provide the world with unique solutions or aspirations in the form of brands. We can grow to be a low-cost producer or offshore hub for services, but these do not provide long-term sustainability. The key is to create brands, innovate and create markets.

What were the main challenges faced by Litro prior to assuming office as its Chairman and how did these challenges impact the company’s operations?

At the point of my being appointed, the nation was already in a state of chaos with gas shortages and a grieved public that was unable to feed their children. This situation did come about due to a national monetary crisis, but Litro previously was a very profitable entity. In my first stint as Chairman, we grew market penetration on the island to nearly all households and profitable. When I was brought back this had completely evaporated, leaving Litro dependent on the government for support. This was brought about not only by wrongful policy on pricing and wrong leadership but also mismanagement of the company and inefficiency in its procurement process of gas. The combination of all this resulted in the national crisis and Litro falling from being a sustainable business with reserve, to a bankrupt state entity by 2022.

How did Litro overcome the shortage of foreign currency (US dollars) at the national level that crippled purchasing power for the company?

We understood the market and knew the math of fixing the problem. The issue was we now had lost credibility with suppliers for credit procurement and were short of funds to purchase the necessary gas on our own. The first thing was to get gas into households and so we set out a strategy and put together a document that convinced the World Bank our model was sustainable. This opened the door for World Bank funds by way of loans being granted at a time no international loans were being given. The negotiation process was our first success.

Putting in place a pricing formula that was a win-win for the people of the nation who had already suffered much and for Litro, ensured we had a market-led approach that served the need of the hour. This together with other measures of innovating distribution channels, supporting traditional channels and putting in place a market-led procurement system, helped Litro not only bring back normalcy to the market but also repay the loan taken from the World Bank within the year.

Beyond recovering from its challenges, what is Litro’s vision for the future?

As a SOE our mission is to serve the nation. The well-being of the nation and every Sri Lankan drives all that we do at Litro. Having fixed the problems of the past, we felt it was time to play a more transformative role in the rise and sustenance of our people. Prosperous people serve our National Growth agenda and are self-feeding to our own efforts as well. We currently focus on three areas of National Transformation.

The first is the Economy. Here is where Litro is working with the community to help foster greater productivity and industry through the use of gas to help boost national productivity. This includes working with Sri Lanka’s big industries as well as the massively important SME sector.

The second is Society. Recognizing the importance of education and being informed, we combined education and safety as a pillar to build a more informed society that is capable of taking care of itself when the need arises.

Finally, we focus on the Environment so that Sri Lanka can breathe easier for years to come. We are doing our part to help reduce the global carbon footprint, but most importantly we are working to preserve Sri Lanka’s rich biodiversity and forests for future generations. Litro is not just about today and now. It is about Sri Lanka’s future and this means transforming Sri Lanka at a multi-layered level so that the benefits are felt. We do this by focusing on Profit, People, and Planet equally. Within this itself several opportunities to drive “The Next Sri Lanka Opportunities” exist. These range from entrepreneurship to innovation of our customers and even market opportunities such as being a centre for carbon offsetting in the future for global companies. Whilst doing all this, our primary focus at this time is on how we use gas to drive industry, enterprise, and innovation to increase national productivity. To help fuel the Next Sri Lankan Opportunity.