News
Significant contraction in profitability of SOE sector in first half of 2025
Eighteen out of 52 major state-owned enterprises (SOEs) have incurred losses in the first six months of 2025, worsening fiscal pressures on the government and taxpayers, according to the Mid-Year Fiscal Report released by the Ministry of Finance.
The report has revealed a significant contraction in the profitability of the SOE sector. During the first half of 2024, the 52 entities collectively posted profits of Rs. 280.7 billion. In contrast, their combined profit for the corresponding period in 2025 has dropped to Rs. 227.8 billion—a decline of more than Rs. 52 billion.
Among the largest loss-makers are the Ceylon Electricity Board (CEB), SriLankan Airlines and the Lanka Sugar Company, all of which have recorded steep reversals compared to previous years. The CEB has posted a pre-tax loss of Rs. 13.2 billion as at 30 June 2025, a dramatic fall from profits of Rs. 144 billion in 2024 and Rs. 57.6 billion in 2023.
SriLankan Airlines has also suffered a sharp downturn, recording a pre-tax loss of Rs. 12 billion between April and June alone. The airline’s cumulative losses now stand at a staggering Rs. 628 billion. Its equity position has deteriorated to a negative Rs. 415 billion, while total liabilities have risen to Rs. 606.7 billion.
A BBC report cited by the Finance Ministry attributes the airline’s continuing losses to inadequate revenue diversification and heavy debt-servicing obligations.
The Cabinet has already approved restructuring of long-overdue debt amounting to USD 210 million and Rs. 31.4 billion, to be serviced with Treasury involvement.
Meanwhile, Lanka Sugar Company Limited has recorded a pre-tax loss of Rs. 2.6 billion as at 30 June, compared to a loss of Rs. 1.9 billion in 2024 and a profit of Rs. 2.8 billion in 2023, reflecting further deterioration in performance.
Presenting the 2026 Budget, President Anura Kumara Dissanayake said political interference, weak financial discipline and patronage-based recruitment had turned several state entities into “a heavy burden on the economy.” He noted that a number of institutions had failed to pay bank loans, taxes or employee EPF/ETF contributions. The government has already allocated Rs. 11 billion to settle overdue employee benefits and outstanding taxes.
The President said the government would shut down institutions with no commercial, regulatory or administrative value, merge agencies performing overlapping functions and reorganise those that have diverged from their core mandates.
SOEs currently in the red include the CEB, SriLankan Airlines, Lanka Sugar Company, State Engineering Corporation, Lanka Sathosa, Hotel Developers (Lanka) Ltd, State Development and Construction Corporation, Sri Lanka Rupavahini Corporation, State Timber Corporation, ITN, SLBC, State Printing Corporation, Ceylon Fisheries Harbour Corporation, National Livestock Development Board, Janatha Estate Development Board, Sri Lanka State Plantation Corporation, Sri Lanka Cashew Corporation and the Ceylon Fisheries Corporation.
A number of institutions—among them Lanka Sugar Pvt Ltd, the Janatha Estate Development Board, SLSPC, SLRC, Ceylon Fisheries Corporation, NLDB, Elkaduwa Plantations Ltd, SLBC, North Sea Ltd and Lanka Ceramics JV Corporation—have been unable to meet EPF/ETF and tax obligations and now require direct Treasury support.
Despite the pressures, the Finance Ministry notes that several major SOEs have posted stronger results. State banks have reported a combined profitability increase of Rs. 65.5 billion in the first half of the year, while the Sri Lanka Ports Authority, National Water Supply and Drainage Board and Employees’ Trust Fund Board have also improved their performance.
The government has already begun the process of closing 33 inactive institutions by 2026 and restructuring others in line with new efficiency and governance targets.
News
War-linked power crunch pushes Lanka to four-day week
(AFP ) Millions of Sri Lankans enjoyed a government-ordered extra day off on Wednesday as the island nation battles an energy crisis triggered by the Middle East war.
Rail and bus stations were largely deserted as most state institutions, schools and universities shifted to a four-day working week.
“I am really enjoying the mid-week break because it is a fully paid holiday,” said housing ministry official Prarthana Perera, 40.
Her office, like many government departments in Battaramulla — the capital’s main administrative hub — was closed.
Banks operated on shorter hours, while many private firms introduced work-from-home arrangements, industry bodies said, urging members to help curb energy use.
Sri Lanka has already raised fuel prices by a third since the United States and Israel began bombing Iran, triggering retaliatory attacks that have disrupted global energy supplies.
About half of Sri Lanka’s electricity is generated by coal and diesel.
The cabinet has set a target of cutting electricity consumption by 25 percent, ordering street lamps switched off and asking civil servants to use table fans instead of power-hungry air conditioners.
Shipping executive Varuna Perera welcomed the day off but was uncertain of its impact.
“It will not be effective in the long term,” Perera said. “But the government will have a breather for a couple of weeks, to save some energy.”
Environmental lawyer Ravindranath Dabare was more sceptical, arguing the move would have limited impact as those needing government services would have to travel on other days.
“We can’t close hospitals… the doctors and health officials can’t work from home,” Dabare said.
The influential Chamber of Commerce said it had urged members to follow government guidelines or adopt remote work where possible, if
“business continuity can be effectively maintained”.
And Sri Lanka’s leading technology firm WSO2 made working from home mandatory for its 500 employees on Tuesdays and Thursdays.
“This is our way of contributing to the national cause,” WSO2 spokeswoman Zaithoon Bin-Ahamed told AFP.
Media Minister Nalinda Jayatissa said the government had yet to assess the impact of the energy-saving measures, but expected broad compliance.
Sri Lanka has been running coal and diesel power plants at full capacity to meet electricity demand.
President Anura Kumara Dissanayake urged electric vehicle owners not to charge their cars overnight, as they would add a surge to an already strained grid.
He asked motorists instead to plug in during the day, when excess solar power is available.
Officials said the country’s diesel stocks are sufficient to last until mid-May, while petrol could last a week longer.
The government is seeking oil supplies from Russia and hopes to tap Iran for crude oil, Jayatissa said.
Political commentator Kusal Perera said the crisis also presented scope to boost productivity across the state sector.
“They must use this opportunity to have a national dialogue on improving productivity,” he told AFP. “We have to address the inefficiency in the public sector.”
By Amal JAYASINGHE
News
Lanka to swelter through April and May, Met Dept warns
Sri Lanka is set to experience continued hot weather conditions until May, the Department of Meteorology has warned.
Additional Director General of Meteorology Ajith Wijemanna said the current heatwave is expected to ease only slightly once the southwest monsoon sets in toward the latter part of May.
Wijemanna explained that the island is currently in the first inter-monsoon period, characterised by low wind speeds and shifting wind directions, which contribute to rising temperatures. Reduced cloud cover and the sun’s direct position over the country are causing increased heating of land and sea, generating heat waves and warmer atmospheric conditions.
He cautioned that the hottest period of the day will be between 11:00 a.m. and 4:00 p.m., urging the public to limit outdoor activities during these hours.
Authorities also advised drinking plenty of water, wearing light-colored clothing, and avoiding prolonged exposure to direct sunlight, particularly for children and the elderly.The Meteorology Department further noted that rainfall may remain limited in the coming months, with drier conditions possible due to climate variability.
News
Pathfinder Foundation launches Proposal for a National Security Strategy for Sri Lanka
The Pathfinder Foundation launched a proposal for a National Security Strategy for Sri Lanka—2026, emphasising the urgent need for a comprehensive and state-led national security framework.
The proposed strategy contends that an effective National Security Strategy (NSS) must be based on a robust National Security Policy, which provides the long-term framework for protecting the country’s sovereignty, stability, and development in an increasingly uncertain global environment. The Pathfinder Foundation’s initiative, developed through consultations with academics, retired military officers, legal experts, and policy specialists, seeks to stimulate national discussion and support the formulation of an official state policy. The launch event was attended by those involved in preparing this proposal, heads of local think tanks, and media representatives.
Chairman of the Pathfinder Foundation, Amb. (Retd.) Bernard Goonetilleke, in his presentation of the report, emphasised that many major and middle powers, including the United States, China, the Russian Federation, the United Kingdom, Germany, Sweden, and Japan, have developed formal national security strategies. He pointed out that several South Asian and Southeast Asian countries, including India, Pakistan, Bangladesh, Nepal, Malaysia, Thailand, and Singapore, also rely on NSS, whereas Sri Lanka still lacks a single, officially adopted National Security Policy (NSP) or a National Security Strategy to guide long-term strategic planning.
The report highlights key strategic priorities across several sectors, including good governance, internal security, cybersecurity, energy and food security, health security, human capital development, and environmental protection. It also employs the internationally recognised DIME framework (Diplomacy, Information, Military, and Economy) to guide the coordinated use of national power in advancing Sri Lanka’s interests. Among its main institutional recommendations are establishing a fully legislated National Security Council, creating a National Security Secretariat, and officially appointing a National Security Advisor to coordinate policy and implementation across the government.
The full text of the report is available https://pathfinderfoundation.org/publications, and your comments a/ welcome via pm@pathfinderfoundation.org
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