Sri Lanka’s state-owned enterprises (SOEs) could either remain under state ownership or be privatized, according to Peter Breuer, International Monetary Fund (IMF) Mission Chief for Sri Lanka. His statement comes as the new government, led by President Anura Kumara Dissanayake, resists privatization efforts initiated by the previous administration.
The ruling National People’s Power (NPP) government aims to reduce corruption and enhance efficiency to curb losses instead of immediate divestment, officials said. Breuer emphasized the importance of prudent SOE management to prevent financial burdens on taxpayers, highlighting that state ownership or privatization are both viable options as long as fiscal risks are mitigated.
The government has already halted the restructuring of SriLankan Airlines and insists that privatization will only be considered if other measures fail. Transparency is a key aspect of the IMF-backed restructuring program, with commitments to publish audited financial statements for the 52 largest SOEs.
Cost-reflective pricing for essential services like fuel and electricity remains a priority, and the IMF stresses the need for efficient, corruption-free operations to ensure consumers receive fair value. The restructuring of SOEs is considered as critical as debt restructuring, given the long-standing financial mismanagement in state institutions.
The previous government under Ranil Wickremesinghe had initiated bids for several major SOEs, including Hotel Developers Lanka Ltd, Lanka Hospitals Corporation PLC, and Sri Lanka Telecom PLC. The current government, however, maintains that privatization will be a secondary option if efficiency reforms do not yield the desired results.