Budget 2023 proposes restructuring most fiscally significant state-owned enterprises

• Sri Lanka Telecom, Colombo Hilton, Waters Edge, Sri Lanka Insurance Corporation and SriLankan Airlines to be restructured

In an effort to strengthen the revenue position of the country, the government would initiate the restructuring of some of the profit-making state-owned enterprises, President Ranil Wickremesinghe said. 

Measures would be taken to restructure Sri Lanka Telecom, Colombo Hilton, Waters Edge, Sri Lanka Insurance Corporation and SriLankan Airlines, Wickremesinghe told Parliament yesterday, presenting Budget 2023. 

Other than the debt-laden national carrier that continues to be a burden to the national economy, the remaining four SoEs are profit-making. 

According to the proposals presented, the proceeds following the restructuring of the SoEs and their subsidiaries will be used to firm up the foreign exchange reserves of the country and to strengthen the rupee. “The strategic interventions will be made to SoEs, with the anticipation of achieving economies of scale and other benefits. Therefore, I propose to line up the similar nature of businesses by way of backward, forward or horizontal integration,” Wickremesinghe said in his capacity as the Finance Minister.

The urgency of restructuring the most fiscally significant SOEs was reiterated several times during the last six months. As proposed in the interim budget, a unit has already been established at the Finance Ministry, with the specific task of restructuring SOEs. 

The successful restructuring of the SOEs will help bring about improved operational performance, increased access to alternative sources of financing through domestic and international capital markets, financing for infrastructure development, reduced fiscal burden of SOEs and reduced corruption and improved transparency.