Sri Lanka’s State owned enterprises (SOES) will be re-structured in multiple ways and work on the sale of Sri Lanka Telecom has started, State Minister of Finance Ranjith Siyambalapitiya announced.

In 2021, a sum of Rs 367 billion s had had been given by the Treasury to maintain the 430 entities and the restructuring process is still not materialized he said adding that it will be a priority this year

The total loss of the key 52 SOEs was Rs. 726.9 billion for the first eight months of 2022 of which 31 SOEs recorded a profit before tax of Rs. 134.9 billion and the balance, 21 SOEs reported a net loss of Rs. 861.7 billion.

Notably, 99 percent of the total loss has been generated by three SOEs namely, CPC, CEB, and Sri Lankan Airlines (SLA) totaling a cumulative loss of Rs. 854.5 billion from these entities.

These three entities have been loss making for years which has resulted from debt overhang warranting cost reflective pricing for CPC and CEB and restructuring of SLA to mitigate large fiscal risks. The levy/ dividend collection dropped to about Rs. 17.8 billion in the first eight months of 2022 due to the contraction of the economy.

The government has already devised seven models for state enterprises that will be re-structured as soon as possible

Among these models are changing the structure into separate entities and managing them,-consolidating enterprises engaged in similar activities, keeping state management but giving operations to the private sector.

The other restructuring models are giving management to private sector and keeping ownership with the state,leasing parts of entity or as a whole,selling down a stake of 49 percent or less and transferring full ownership to another entity on a transparent mechanism

The SOE re-structuring unit had already started work on Sri Lanka Telecom, which was listed in the budget for 2023 for sale, but the model had not been decided, he said.

SLT is a publicly listed company in which the Treasury has a 49.5 percent stake and Global Telecommunications Holdings NV, a part of Malaysia’s Maxis group, has a 44.9 percent stake.The method of sell-down on SLT has not been decided, he said.

The business operations of State-Owned Enterprises (SOEs) have been disrupted during the first eight months of 2022 due to the supply chain disturbances stemming from the difficult economic situation in the country.

The unprecedented pressure exerted by the large rupee depreciation has become one of the contributors to the notable losses of the SOEs. The fiscal risks on the guaranteed debt of SOEs were also notably inclined during the first eight months of 2022.

Two state banks have been highly exposed to the credit risks on SOEs’ borrowings exerting pressure on banking operations. As such, a proactive and well informed balance sheet restructuring strategy for key SOEs needs to be implemented expeditiously to mitigate the fiscal risks to the government finances.

The difficult economic conditions of the country warranted much needed SOE reforms while mitigating the additional burden on the limited fiscal space. As such, energy prices including fuel and electricity have been adjusted to reduce the losses of Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB).

Meanwhile, a special unit has been set up to identify the methods for minimizing the financial burden shouldered by the General Treasury while enhancing the performance of SOEs more efficiently and productively.

The Sri Lankan Government has decided to import eggs to meet the demand in the market.

The decision was taken during a Cabinet meeting held today.A proposal was put forward to import eggs and the proposal was approved.

Bakery owners had said last week that there was a serious shortage of eggs in the market.

The shortage was as a result of poultry associations refusing to sell eggs at Rs. 55 in the market.An egg was being sold at Rs. 60-70 in some places.

As a result, the Government had decided to import eggs and sell an egg at Rs. 55 or less.

The daily production of eggs had dropped to 3.5 million from eight million, All-Island Poultry Farmers’ Association Chairman, Ajith Gunasekara, said adding that farmers were not starving the market.

“We can only keep an egg for 14 or 15 days. After that they get rotten. The egg production has dropped. It’s impossible to produce eggs at the controlled price,” he said.

Meanwhile, the National Animal Farmers’ Union Convener, Sujeewa Dhammika, said that it was impossible to sell an egg at 55 rupees.

“We don’t want to increase prices. However, the cost of feed has gone through the roof. A lot of farmers have closed shop. They have also sold their chicken for meat. Most people can’t afford to buy parent chickens, so the industry is on the verge of collapse,” he said.

Dhammika alleged that during the Christmas and New Year season, Sri Lankans, on average, consumed about 200 million eggs.

“Some sections want to make the local production collapse and import eggs. Even if they have a two-rupee profit from an egg, they can make 400 million rupees in a few weeks. That’s what’s going on,” he said.

Meanwhile, Minister of Agriculture, Mahinda Amaraweera said that there the poultry industry was on the verge of collapse. The Cabinet would discuss the matter soon and take steps to ensure that the industry would remain afloat, he said.

The All Ceylon Bakery Owners’ Association has called upon President Ranil Wickremesinghe in writing yesterday not to allow the All-island Egg Producers’ Association to sell eggs at exorbitant prices to consumers, said the Bakery Owners’ Association’s Chairman N.K. Jayawardena.

The All Ceylon Bakery Association Members have sought President Wickremesinghe’s intervention to import eggs from India. He added that they called upon the Government to take steps to ensure that the consumers can buy eggs between Rs. 18 to Rs 20.

He said although the Government has said that the price of an egg should be about Rs. 43 for a white egg and Rs. 45 for a brown egg, there was no indication that the egg producers would reduce the prices. The supermarket shelves now have Rs. 70 per-egg cartons, he said.

Egg producers have problems feeding their poultry stocks due to higher animal feed costs. Jayawardena said, “Even with all their problems, they can still sell an egg at Rs 30 (retail) and yet make profits”.