Srilankan: Govt.’s litmus test for SOE restructuring?

The fate of the ailing national carrier, Sri Lankan Airlines, will be decided soon as the airline has now become a litmus test for the government to prove its commitment towards restructuring of loss making state-owned enterprises (SOES)— one of the key conditions of the ongoing three-year programme Sri Lanka has with the International Monetary Fund (IMF).

Mirror Business reliably learns that IMF has requested the government to immediately take appropriate measures to correct the course of the loss-making, debt-laden airline before the release of further funding under the Extended Fund Facility (EFF).

Although Sri Lanka has a number of loss-making SOES, Srilankan Airlines is said to have been chosen as a test case of sorts.

Mirror Business also learns that it has been pointed out to the government that the solvency and credit rating of the two main state banks, who are the key funders of the airline, should be protected as anything that negatively affects the two banks will have an adverse impact on the balance sheet of the government.

The IMF’S request has prompted the government to set up a special ministerial committee, which includes Finance and Mass Media Minster Mangala Samaraweera, Special Assignments Minister Sarath Amunugama, Transport and Civil Aviation Minister Nimal Siripala de Silva, Public Enterprise Development Minister Kabir Hashim and Development Strategies and International Trade Minister Malik Samarawickrama. The committee is headed by Prime Minister Ranil Wickremesinghe.