ECONOMYNEXT – Sri Lanka has about 80 state commercial entities that need not be in state hands based on several criteria, Director General of State Enterprise Restructuring Unit, Suresh Shah said.
There are about 130 commercial state-owned enterprises (SOEs) in Sri Lanka out of which 15 are non-operational and have to be closed.
There were another 80 commercial entities that did not meet the conventional arguments for being kept in state hands.
These include: having a natural monopoly, having a public service function or being an essential service.
The SOEs could arguably perform better in private hands.
There are about 20 which could remain under government control for various reasons, but could be candidates for public private partnerships, Shah said.
Treasury Secretary Mahinda Siriwardana said India has privatized ports and airlines which some consider should be in state hands.
Privatized firms in the past had expanded and also paid more taxes to the government.
If a privatized firm fails, its shareholders lose money, however the losses of an SOE is ‘socialized’ critics say.
The losses of a public private partnership, which is not based on pure risk capital, depending on how it is structured, could also end up being ‘socialized’ analysts say. (Colombo/Sept06/2023)