Loss making government institutions total 250, Total losses incurred 600 Billion Rupees - Eran Wickremarathne
Dec 11, 2016
Deputy Minister for State Enterprise Development Eran Wickremaratne says that within the 2014 fiscal year the total losses incurred from the loss making state institutions amounts to 600 Billion Rupees. According to the minister there are more than 250 loss making government institutions in the country at present. Pointing out that there could be no common solutions to change this situations since these loss making institutions are scattered on a vast area from aviation to plantation industries, the deputy minister says that the main reasons for these titanic loses are the results of continuous undue political interventions and the poor management.
When listing down the loss making government institution the Ceylon Electricity Board (CEB) is among the top ranks of the list. According to reports the losses incurred by CEB amounts to Rs.13303 Million. But recently it has been surpassed by Srilankan Airlines with its colossal Rs. 16,181 Million loss. While the Sri Lanka Transport Board (SLTB) has incurred Rs. 9407 losses, the controversial Mihin Lanka airlines has also managed to add a loss of Rs. 1187 Million loss into the bargain. Among the loss making institutions are the Agriculture Insurance Board with Rs. 1941 Million losses, the state Plantation Corp with Rs. 237 Million losses, the Sri Lanka Rupawahini Corp (SLRC) with Rs. 182 Million losses, the National Paper company with Rs. 209 Million losses, The Cooperative Wholesale Enterprises Corporation (CWE) with Rs. 293 Million losses, and the Gal Oya Plantation Corp with Rs. 234 Million losses. There are many other institutions in the list that have recorded continuous losses.
The treasury has not yet allocated funds to cover the losses incurred by these individual institutions. However, observations have started to look into the reasons as to why these institutions continue to make losses. Apart from the common causes such as mismanagement and political interventions, the overall inefficiencies of the staff, poor management, constant interruptions in productions due to financial problems and salary issues, the increasing gap between the income and expenses have also been identified as issues that have to be resolved. The 2016 Budget has proposed various suggestions to restructure these institutions to minimize losses and the calculation of overall losses is still going on.
According to these proposed legislations a special board would be appointed to oversee the state enterprises which would have the authority to appoint directors for other state institutions. Everyone would be allowed to propose names for these appointments. The board shall select the fit and proper personnel to hold the position and the government is intending to form the procedure in a similar fashion to the independent commissions’ structure governed by the constitutional council. The government believes that this would effectively minimize the undue political interventions upon the administration of these institutions.
Pointing out that the government has been able to decrease the rate of lossmaking in these institutions, Mr. Wickremeratne says that Srilankan Airlines has been converted into a regional Airline service. According to the deputy minister, Srilankan Airlines have been able to cut down its continuous losses due to these changes. The government is also focused on the fraudulent activities that had taken place in these institutions during the previous regime, the deputy minister said.
The treasury has not yet allocated funds to cover the losses incurred by these individual institutions. However, observations have started to look into the reasons as to why these institutions continue to make losses. Apart from the common causes such as mismanagement and political interventions, the overall inefficiencies of the staff, poor management, constant interruptions in productions due to financial problems and salary issues, the increasing gap between the income and expenses have also been identified as issues that have to be resolved. The 2016 Budget has proposed various suggestions to restructure these institutions to minimize losses and the calculation of overall losses is still going on.
According to these proposed legislations a special board would be appointed to oversee the state enterprises which would have the authority to appoint directors for other state institutions. Everyone would be allowed to propose names for these appointments. The board shall select the fit and proper personnel to hold the position and the government is intending to form the procedure in a similar fashion to the independent commissions’ structure governed by the constitutional council. The government believes that this would effectively minimize the undue political interventions upon the administration of these institutions.
Pointing out that the government has been able to decrease the rate of lossmaking in these institutions, Mr. Wickremeratne says that Srilankan Airlines has been converted into a regional Airline service. According to the deputy minister, Srilankan Airlines have been able to cut down its continuous losses due to these changes. The government is also focused on the fraudulent activities that had taken place in these institutions during the previous regime, the deputy minister said.
