Business
It’s high time Sri Lanka brought SOE privatisation to the policy table: Advocata
Sri Lanka is already in one of the worst economic crises in its history. Experts warn that deep economic reforms are essential.
Reforming SOE’s can curb further losses, which add to the fiscal deficit.
The Cumulative losses of the 55 SOEs from 2006-2020 was a staggering 1.2 trillion.
Disposing of State Owned Enterprises which are a burden on the public finances, is the crucial need of the hour.
Immediate privatisation of large State Owned Enterprises, will build international investor confidence.
“Some big government enterprises are not responsive to our needs. And because they’re not responsive, you will go home today and you will have a blackout of one hour, because they are load shedding during peak hours ,” says Prof. Rohan Samarajiva, a veteran policy expert and an advisor of the Advocata Institute.
He made these comments at Advocata’s recent press briefing, organised to highlight the urgency of carrying out reforms to State Owned Enterprises (SOE).
“The basic issue is that we, in this country, are suffering from a twin deficit. We need to get started on addressing the core problem”, further stressed professor Rohan Samarajiva.
According to Prof. Samarajiva privatising a globally visible, yet loss making SOEs such as SriLankan Airlines is the best solution to create confidence among investors that Sri Lanka is serious about reforms.
Sri Lanka’s SOEs are a serious burden on public finances. With the economic crisis reaching a tipping point, it is becoming increasingly impossible to keep these loss making enterprises afloat. The continuation to do so, at the expense of the taxpayer can have serious consequences to the economic trajectory of the nation.
Advocata Institute’s research team has identified that the cumulative losses of the 55 SOEs from 2006-2020 is a staggering 1.2 trillion. The combined loss per day of the Ceylon Petroleum Corporation, The Ceylon Electricity Board , Sri Lanka Airlines, Sathosa and the National Water Supply and Drainage Board is about LKR 384,479,189, according to data for the year 2019. This is at the backdrop, where the country is wading through a serious debt crisis with questions surrounding our ability to meet forthcoming debt obligations.
The briefing brought together a panel of industry experts who raised alarm bells on why Sri Lanka cannot afford to be complacent about State Owned Enterprise reforms anymore.
Prof. Rohan Samarajiva, further explained the seriousness of this issue along with how privatisation can achieve positive outcomes for the country.
“In 1997, Sri Lanka Telecom was making losses and providing bad services. Today, after privatisation, it is providing us with good services and employment and double of what they were earning. It is also providing the government with a dividend which generated billions to the government”. He highlighted that the country has no other alternative to prevent the hemorrhaging losses of State Owned Enterprises apart from privatisation.
“Privatisation is not a one size fits all model, it is different in different countries and sectors – as seen in the telecommunication industry in Sri Lanka – with a good regulator, we can have competition, leading to greater efficiency and making technology accessible to the common public” commented Ms. Anarkali Moonesinghe, Advisor to the Advocata Institute.
She further elaborated that possible avenues for privatisation that can be considered include listing of State Owned Enterprises in the stock exchange. According to Ms. Moonesinghe, “our stock market could use large capital companies that are owned by the government today. It not only gives people ownership but also broadens ownership by giving the average person an opportunity to become a direct stakeholder to these enterprises. This can be a better option than attaching the person through taxpayer money or having your EPF/ETF being taken into these enterprises”, thereby describing the merits of listing.
Dr. Sarath Rajaptirana, Advocata’s Academic Chair, said that the present crisis makes two choices available to us, which is “reform or perish ”. He highlighted the urgency of implementing structural reforms. He further commented that the key issue with State Owned Enterprises lies in productivity.
” For over 30 years, Sri Lanka’s total factor productivity was less than 1%,.This is in severe contrast to countries such as South Korea and Vietnam, where a jump in productivity is experienced today which we were never able to maintain . If you want permanent change in the GDP rate, you need to have productivity increase” said Dr. Rajaptirana.
The Ceylon Electricity Board (CEB) has announced an international call for proposals to develop two 50 MW wind farm facilities in Mullikulam on a Build, Own & Operate (BOO) basis. The initiative aims to bolster Sri Lanka’s renewable energy capacity, aligning with the government’s strategy to increase the share of clean energy in the national grid.
The bidding process, launched on behalf of the Cabinet Appointed Negotiating Committee, invites local and international project proponents to finance, design construct and maintain the wind farms under a 20-year agreement. The deadline for proposal submissions is June 12, 2025.
A senior electrical engineer at the CEB, speaking on the significance of the project, told The Island Financial Review: “This initiative is a crucial step towards achieving Sri Lanka’s renewable energy goals. Wind power is a key component of our strategy to reduce reliance on fossil fuels and enhance energy security.”
According to the CEB, interested parties can obtain the Request for Proposal (RFP) document by paying a non-refundable fee of Rs. 300,000 (or USD 1,035 for foreign applicants). The RFP provides comprehensive details on project requirements and evaluation criteria.
“Given the global shift towards clean energy, we expect strong interest from both local and international developers. This project not only supports our sustainability targets but also creates investment opportunities in Sri Lanka’s energy sector, the engineer added.
The wind farm project is part of a broader initiative to achieve 70% renewable energy generation by 2030, a key target set by the Ministry of Energy. Experts believe that projects like these will play a vital role in stabilizing electricity supply and reducing carbon emissions.
by Ifham Nizam
LOLC once again emerges as the “People’s Financial Services Brand of the Year”, securing the prestigious title bestowed at the SLIM Kantar People’s Choice Awards 2025 for an unparalleled ninth consecutive year. This recognition, conferred through a comprehensive consumer research, reflects the brand’s firm connection with the Sri Lankan people and its consistent leadership in financial services.
Unlike many industry awards, the SLIM Kantar People’s Choice Awards is determined by independent consumer research conducted by Kantar, a global leader in brand insights. Instead of relying on a judging panel, this recognition is purely based on public perception, brand recall, and customer loyalty, making it one of the most authentic measures of a brand’s standing. Securing this title for ninth consecutive years highlights LOLC’s deep-rooted connection with its customers and its ability to evolve with their changing needs while maintaining a firm commitment to excellence.
Kapila Jayawardena-
Group Managing
Director/CEO of LOLC
Holdings PLC
LOLC’s continued success is driven by its assurance to financial empowerment, innovation, and inclusiveness. It has redefined accessibility to financial services by reaching underserved communities and pioneering digital transformation. Beyond its core financial solutions, LOLC is a brand that stands with the people, for the people, embodying resilience and hope through the years. In times of crisis, be it economic hardships or global disruptions, LOLC has remained a pillar of strength, stepping in when the nation needed it most. This deep-rooted connection with the people is what truly sets LOLC apart. The company has also been recognized for initiatives that create real social impact, such as the Divi Saviya Humanitarian Project, which uplifts vulnerable communities through sustainable support.
Orient Finance PLC has reported an outstanding financial performance for the nine-month period ended December 31, 2024, showcasing significant growth in key financial indicators compared to the corresponding period in 2023.
The Company recorded a remarkable 161% increase in profit after tax, reaching Rs. 254.6 million compared to Rs. 97.6 million in the same period of the previous year. Net interest income surged by 37%, amounting to Rs. 1.66 billion from Rs. 1.21 billion, demonstrating strong portfolio growth and enhanced operational efficiencies.
Total assets expanded by 28%, rising to Rs. 25.3 billion, while loans and receivables increased by 36% to Rs. 19.76 billion. The Company’s deposit base grew to Rs. 15.12 billion, marking a 19% increase, reflecting continued customer confidence. Meanwhile, total equity improved by 12%, standing at Rs. 3.86 billion.
Earnings per share (EPS) grew 163% to Rs. 1.21, up from Rs. 0.46, while net assets per share (NAPS) rose by 12% to Rs. 18.27.
For the month of December 2024, Orient Finance reported a Cost-to-Income Ratio of 68%, reflecting continued efforts towards cost management amidst challenging market conditions. The Gross Non-Performing Loan (NPL) Ratio stood at 9.62%, while the Provision Cover was maintained at a healthy 65.37%, demonstrating company’s prudent approach to credit risk management. As the quarter ended 31st December 2024, Orient Finance’s Tier 1 Capital Ratio stood at 13.14%, with the Total Capital Ratio recorded at 13.16%, both remaining comfortably above the minimum regulatory requirements.
Commenting on the results, Rajendra Theagarajah, Chairman of Orient Finance PLC, stated, “These exceptional results underscore our commitment to sustainable growth and operational excellence. Our focus on innovation and customer-centric financial solutions has strengthened our position in the market. As we continue to evolve, we remain dedicated to offering innovative financial products that meet the diverse needs of our customers while driving long-term shareholder value.”
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