Sri Lanka Government signs Statement of Corporate Intent with 10 SOEs

(COLOMBO, LANKAPUVATH) –The Government Monday signed the Statement of Corporate Intent (SCIs) with ten selected State Owned Enterprises (SOEs) with a view to enhance the performance of these institutions.

The agreements were signed on 10th June at the “Randora” Auditorium of the Ministry of Finance.

The Department of Public Enterprises (PED) introduced the concept of SCI in 2017 with a view to enhance the performance of SOEs.

This concept was approved by the Cabinet of Ministers on 7th February 2017 and was initiated by signing SCIs with five Key SOEs; Ceylon Petroleum Corporation (CPC), Ceylon Electricity Board (CEB), Sri Lanka Ports Authority (SLPA), Airport and Aviation Services (Sri Lanka) Limited (AASL) and National Water Supply and Drainage Board (NWS&DB) on 15th March 2017.

Subsequently, followed by the approval of the Cabinet of Ministers, it was planned to sign SCIs with another 10 selected SOEs – Sri Lanka State Plantation Corporation, Urban Development Authority, Lanka Sathosa (Pvt) Ltd, Central Engineering Consultancy Bureau, State Timber Corporation, Kurunegala Plantation (Pvt) Ltd, State Pharmaceuticals Corporation, Milco (Pvt) Ltd, National Livestock Development Board and Geological Survey and Mines Bureau.

SCI is a tripartite Agreement, signed among the Secretary to the Ministry of Finance (MOF), Secretary of relevant line Ministry and the Chairman of the respective SOE on behalf of the Board of Directors with the mission of creating a platform for SOEs to operate in a commercially viable manner in order to achieve macroeconomic objectives of the country.

SCI possesses following objectives; to operate SOEs in a budgetary independent and commercially viable manner, to improve Corporate Governance Practices, to strengthen the Financial Management, to strengthen the Human resource management, to change the operational culture and reengineering the business process, to improve the transparency and accountability in operations, to ensure efficient and effective business operations and to generate reasonable Return on Investment.

Moreover, SCI contains key performance indicators linked to Corporate Plan, Action Plan and Annual Budget of the SOEs spread over three years’ time horizon. In addition, the impact of all noncommercial operations of the SOEs are also taken into account and included in the SCI.

The SCI would enable to contribute positively to the strategically important SOEs towards achieving Sri Lanka’s economic goals by enhancing the contribution making to the GDP of the country.

In achieving the set objectives of these SOEs, the key expectations of the government are to encourage and to facilitate these SOEs to improve the operational and financial efficiency through improved corporate practices, innovative financing, strong and prudent financial management, exposure to competitiveness and international best-practices and effective human resource management while enhancing public accountability.

The effectiveness of the SCI process will depend fundamentally on to what extent the SCI will be used as their own management tool by the selected SOEs and the Line Ministries. Progress of SCIs are monitored by PED and the PED submits a progress report to the Cabinet of Ministers periodically.

On the success of the implementation of this program, the government is expecting to extend this move for the other 400 SOEs as well by time to time, the Ministry of Finance said.

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