ECONOMYNEXT – Sri Lanka’s state enterprises operate in a competitive environment and sector regulators should be independent, Deputy Minister Eran Wickremeratne said.
"The various modalities available for public sector reform range from performance contracts, management contracts, private competition (liberalization), and public-private partnerships, to privatization," Wikramaratne told the Sri Lanka Economics Association.
"For example, the concept of performance contracts as a strategy for public enterprise reform in Sri Lanka is one that should be explored.
"The essence of performance contracts is to institutionalize effective incentive structures and processes that reward managers and employees for improvements in efficiency, productivity and consumer service."
Critics say Sri Lanka’s ousted regime showed why politicians are reluctant to privatize state enterprises and it was called in a ‘bitter pill’.
More than government department SOEs with more financial independence are cash cows to stuff henchmen as directors and during recent years as advisors with high salaries and vehicle and generally shovel money to the party support machinery.
Critics say in addition to SOEs independent regulatory institutions especially those that are separately funded from the industry and are cash-rich like the telecom regulator is held directly by the President, and is they have also been been milked.
At the moment probes are ongoing in the case of telecom and stock market regulators.
Meanwhile Wickremeratne said regulatory agencies should come under direct parliamentary oversight.
"Currently, regulators’ operational independence and accountability is sub-optimal, with most of these entities reporting to a Line Minister, he said.
"In reality, regulators should come under Parliamentary oversight."