Government to pump money into Mihin, CPC

MihinThe new government plans to restructure loss making State Owned Enterprises (SOEs), including Mihin Lanka, to be self financed without depending on the General treasury.

At present Sri Lanka has around 245 public Corporations, institutions and the boards classified as SOEs of which 55 have been identified by the government as the strategically important enterprises which are engaged in commercial, industrial and financial activities.

Finance minister Ravi Karunanayake said that as part of the government’s plan to restructure these strategic SOEs, actions have been taken to make  SriLankan Airlines, Mihin Lanka, Ceylon Petroleum Corporation and the Water Board to be self financed with the capital infusion by the general treasury .

Under this major restructuring programme the government will make a capital infusion of Rs 65 billion to the Water Board, Rs 100 billion to the Ceylon Petroleum Corp, US Dollar 125 million to SriLankan Airlines and US Dollar 25 million to Mihin Lanka in the year 2015 by way of Treasury bonds.

Many of the SOEs were making losses for the last several years.  Commercial operations of energy, aviation and commuter transport and plantation clusters have ended up with losses. CPC has an accumulated debt of Rs 234 billion while CEB ‘s corresponding value of Rs 57 billion. Sri Lankan airlines debt is running at Rs 124 billion.

The new government has taken a policy decision that the institutions of economic and strategic importance should be independent in their own affairs because it is unfair for the general treasury to pump tax payers’ money to maintain those at loss making institutions.

The major setback identified in these institutions were operational inefficiency resulting in poor financial performance, Poor product quality and supply shortages, Inability to mobilize resources to meet large investments to expand capacity and improve quality and  Excessive dependence on transfers or credit guarantees from the government causing a heavy burden on the budget.

Therefore, Mr Karunanayake said that the government’s Economic Sub Committee headed by the Prime Minister Ranil Wickremasinghe  after having studied the importance of these major SOEs has approved the capital infusion to make them self financed within the next three years.

“These Institutions are strategically important to the economy and highly sensitive to the behavior of all its stake holders including the general public. So while the government maintains them as SOEs will make capital infusion to make them autonomy in their service providing “said the Minister Mr Karunanayake.

6 COMMENTS

  1. Government change in last January was a big blow to Sri Lankan economy. Even though Rajapaksa may have been corrupt, the development was unbelievably good for Sri Lanka. Now the country is governed by “puppets of West” therefore we can only expect decisions such as pumping money, not ways to generate funds. Unfortunately Sri Lanka is in wrong hands now.

    • [development was unbelievably good ]

      You said it Drashan development of MR and his band of thieves wealth is breath-taking. They made to look Gadhafi of Libya, Marcos of Philippines, Suharto Indonesia, Mobutu Sese Seko of Zaire, Sani Abacha of Nigeria looked like new born babies. And for the development of the country one highway already sinking in some parts, Empty Int: Air Port Humbantota bigger & better than Dubai only to be used for cargo of ethanol smuggling, Solid As a rock Asia’s number one shipping port at Humbantota that is not deep enough, Mahinda ( Mihin) worlds number one airline, well that’s enough I got writers cramp.

  2. Ravi Karunanayakam.. you are an incompetent finance minister. you are behind the treasury bill scandal and money laundry allegation with crooks like Jailed Ravi Rajarathnam. you do not have a credibility and skill set to do the job. please leave please don’t change your name and become a politician as Sinhalese person. you dont like to show the world you are tamil. are you ashamed of it. you leave you are a lie.

  3. It is really appreciative, Govt. is going to restructure all the Govt. and semi.Govt. sectors by allocating funds. It is very necessary to appoint the correct and qualified personnel to the top management and give them the entire responsibility to bring in profits. They should be given all the powers to manage the affairs without any interference and I am sure the expected targets can be achieved.. All the Best Mr. Hon. Minister.

  4. Pump money to expedite Moragahakanda project which is already stalled with political situation. Let us send the water of central hills irrigating the lands in the North. Ravi, you just eager to spent money for “White Elephants” in its last hour, spent money wisely identifying the priorities, which the last regime fail to recognized.

  5. During the last elections the UNP said that Mihin Lanka is the Air Line of Mahinda Rajapakse and that they will close it down because it is making huge losses. Why do they now want to pump money to it to keep it going? Is it because Mihin is another money spinner to Ranil & Ravi or is it because that was another lie uttered by them against MR?

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