While the commitment of the government to improve the infrastructure base of the country is commendable, financially viable institutions, effective regulations, proper pricing and precise targeting are essential to maintain the sustainability of services provided, the 2011 Annual Report of the Central Bank stated. In this context, it noted that the recent fuel price adjustments followed by electricity tariff and transport fare adjustments were steps in the right direction.
“Such price revisions are essential to correct adverse macro-economic implications caused by the heavy losses incurred by the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB) due to the sale of their products at prices below cost. At the same time, it is important for other State Owned Enterprises (SOEs) providing infrastructure such as Sri Lanka Railways, Sri Lanka Transport Board, Postal Service, SriLankan Airlines, National Water Supply and Drainage Board to ensure the financial viability by improving financial management and pricing,” the Annual Report stated reiterating that less dependence of these entities on the government budget and the banking system to finance their operating losses is important to avoid the likely macroeconomic implications.
Last week, The Nation had exclusively reported that seven of Sri Lanka’s largest State Owned Enterprises had incurred a combined loss of a staggering Rs.151.5 billion in 2011 with state run entities CPC, CEB and SriLankan Airlines suffering a total loss of Rs.138.6 billion.
Meanwhile, the Annual Report stated that in 2011, policy measures were initiated by the government to improve the performance of SOEs to increase their return on investment through the development of an economically feasible cost reflective pricing structure and thereby reducing the reliance on the Government budget.
“SOEs are also expected to explore innovative Public-Private Partnership (PPP) strategies and attract private investments to catalyse the development process,” the Annual Report further highlighted.
“Such price revisions are essential to correct adverse macro-economic implications caused by the heavy losses incurred by the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB) due to the sale of their products at prices below cost. At the same time, it is important for other State Owned Enterprises (SOEs) providing infrastructure such as Sri Lanka Railways, Sri Lanka Transport Board, Postal Service, SriLankan Airlines, National Water Supply and Drainage Board to ensure the financial viability by improving financial management and pricing,” the Annual Report stated reiterating that less dependence of these entities on the government budget and the banking system to finance their operating losses is important to avoid the likely macroeconomic implications.
Last week, The Nation had exclusively reported that seven of Sri Lanka’s largest State Owned Enterprises had incurred a combined loss of a staggering Rs.151.5 billion in 2011 with state run entities CPC, CEB and SriLankan Airlines suffering a total loss of Rs.138.6 billion.
Meanwhile, the Annual Report stated that in 2011, policy measures were initiated by the government to improve the performance of SOEs to increase their return on investment through the development of an economically feasible cost reflective pricing structure and thereby reducing the reliance on the Government budget.
“SOEs are also expected to explore innovative Public-Private Partnership (PPP) strategies and attract private investments to catalyse the development process,” the Annual Report further highlighted.
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