State-owned enterprises suffered unimaginable Rs. 460 bn loss in 2016 – WB Country Director

More than SL’s annual health budget



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 Dr. Idah Pswarayi-Riddihough


By Steve A. Morrell


Expressing concern over unproductive government-run institutions devouring billions of rupees, World Bank Country Director for Sri Lanka and the Maldives, Dr. Idah Pswarayi–Ridihough says that with a staggering Rs. 460 billion loss suffered by around 400 State-owned enterprises in 2016, the government is "contributing more to its public sector enterprise than receiving from it".


The stupendous losses State Owned Enterprises (SOEs) incurred during this period far exceeded Sri Lanka’s Rs. 380 billion annual health budget, she said. "These losses continue; they have still not been tackled effectively".


Dr. Pswarayi–Ridihough was the keynote speaker at the launch of the Handbook on Good Governance for Chairmen and Boards of Directors of Public Enterprises, at Chartered Accountants (CA) Sri Lanka, last week.


Speaker Karu Jayasuriya was the chief guest at the event


These losses these SOEs continue to suffer impact on fiscal costs and fiscal risks. Many of these institutions have reported significant persistent operating losses. Nett transfers from the government to bail out these public enterprises were an unimaginable 460 billion rupees, she pointed out.


Public enterprises represent a major part of Sri Lanka’s public sector institutions. Therefore, their governance is of paramount importance, she stressed.


The total turnover of 55 SOEs totalled 1.5 Trillion rupees or some 13 percent of GDP in 2016. The World Bank, with government counterparts sought a citizens’ perspective on public enterprises. The results of an opinion survey launched showed many Sri Lankans were critical of the performance of public enterprises, Pswarayi–Ridihough said.


"Around 38 percent of those surveyed complained these institutions performed poorly. In addition, another 36 percent opined that the quality of services was very poor", she said.


Some of the key factors attributed to the poor performance of these government-run institutions were political interference, the need for better corporate governance, lack of transparency and improving performance monitoring and evaluation, the World Bank Country Director noted.


"We fully support the efforts of Parliament, Government, Human Resource Development Council and civil society to improve governance and performance of public enterprises. Ultimately, what is needed is better service delivered at value for money", she stressed.


Good governance translates into credible and trustworthy institutions built on principles of transparency and accountability. Additionally, answerability, if service is not delivered in a timely and efficient manner, Pswarayi–Ridihough noted.


Cross country studies show the negative impact of corruption on growth and investment. Sri Lanka has made important progress in strengthening the country’s governance framework with the 19th Amendment to the Constitution. This document provides for more independent accountability of institutions, she continued.


The Human Resource Development Council, Auditor General, Information and Procurement Commission and the Right to Information are all progressive steps conducive towards the environment to improve transparency and accountability, she said.


President, CA Sri Lanka, Jagath Perera, made the introductory speech.


 
 
 
 
 
 
 
 
 
 
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