Sri Lanka Railways goes under the restructuring hammer

Sri Lanka Railways is set to be restructured considering different models including turning it to an Authority or managing the train service under a public private partnership.

The aim is to provide a better convenient and efficient transport service for commuters in accordance with the government’s IMF dictated policy of state institution reforms.

This A-grade Government department has to be transformed into a profitable venture by streamlining operations and enhancing efficiency to ensure a better service delivery, Transport Minister Bandula Gunawardena told the Business Times.

He noted that maintaining a state entity is a burden for the country and the only option to make the

Department a profitable venture was to transform Sri Lanka Railways into an Authority.

Mr. Gunawardena said the country should get rid of official bureaucracy of the department and introduce a system which operates under a board of directors.

It will ensure job security of employees numbering around 17,000 and their pension would be safeguarded, he elaborated adding that the Department restructure should be similar to partial privatisation like the Sri Lanka Ports Authority (SLPA) and Sri Lanka Telecom.

The minister said that if the Department is not transformed into an authority (statutory body), it will have to be sold to a private investor.

An expert committee has been appointed to obtain necessary recommendations for a complete restructure and improvement of Sri Lanka Railway’s service.

The chairman of committee appointed to put forward proposals for the restructuring of Sri Lanka Railways K.D.S. Ruwanchandra said an interim report will be sent to the Cabinet of ministers next month.

The committee will consider proposals to cover the operating loss of Sri Lanka Railways and ways and means of providing an efficient service.

The committee also comprises a group of university lecturers, Mr. Ruwanchandra said adding that special attention will be paid to their opinions when preparing proposals of restructuring.

The committee will put forward proposals to tackle the operating loss of Sri Lanka Railways and provide an efficient service.

Although the revenue of the Railways Department was Rs. 2.6 billion in 2022, Rs.7.7 billion was spent on overtime allowances and salaries with a loss of Rs.12.43 billion, Finance Ministry data shows.

It has earned an income of Rs. 2.7 billion in 2021 incurring a loss of Rs.10 billion. The salary and overtime payment alone was Rs.9.3 billion during the year.

The Department has been running at substantial losses in the 10 year period of 2010-2020 accumulating a loss of Rs. 331 billion.

It maintains 1561km of rail tracks and operates 72 locomotives, 78 power sets, 565 carriages and the signaling network with a workforce of 17,634.

The Department owns around 14,000 acres of land in the island, with 9,000 acres allocated to yards and tracks.