Public enterprises resurrection gets off the ground next year

APublic Enterprises Development Bill is to be presented in Parliament early next year to resurrect loss-making state-owned enterprises (SOE) and set up a Public Enterprise Board with top executives sourced from the private sector, a senior official of the Ministry of Public Enterprises Development told the Business Times.

The restructuring of SOEs would be done by way of a combination of restructuring and listing of non-strategic SOEs in the Colombo Stock Exchange (CSE) as well as selling some of those assets, he revealed.

The Public Enterprises Development Bill has been drafted by the Legal Draftsmen Department while laying out policy, legal and institutional obligations for contracting Public Private Partnerships and it would enable the government to attract investors to resurrect SOEs, he pointed out.

The new directors of the Public Enterprise Board comprising top officials of the public and private sectors, representatives of trade unions and professionals of the relevant fields will handle the managerial appointments of SOEs and the monitoring of the progress of the institutions constantly, he said adding that it will be set up following the model of Singapore’s Temasek and Malaysia’s best practices (Kaza model).

After setting up the board, all appointments for public enterprises will be carried out through this board. “They will make appointments for various boards, for example for SriLankan Airlines; they will hire the management board, not the ministry,” he added.

"The lack of a clear-cut policy directives with regard to management of public enterprises, failure to delegate decision-making to senior management, absence in commercial consideration in business decisions, political inter- ference in appointment of staff, failure to adopt practical guidelines for the selection and failure to adopt practical guidelines for appointment of management level officers have been identified as some of the key constraints to improve performance of public enterprises," a cabinet approved proposal revealed.

The cabinet has approved the proposal to adopt criteria on professional and management experience, maximum age limits, provisions for prevention of conflicts of interest, disqualifications, prepared by the committee appointed by the President in making recommendations for such appointments.