Govt to bring in key strategies, reforms to revive SOEs | Daily News

Govt to bring in key strategies, reforms to revive SOEs

Dematagoda railway yard
Dematagoda railway yard

The Government will soon implement key reforms and strategies to revive State-Owned Enterprises (SOEs) while maintaining its policy decision to discontinue privatization.

These strategies and reforms will aim at enhancing the productivity level of the SOEs through various mechanisms including professionalization of SOEs board of management, close monitoring, operating with proper strategic directions to convert the SOEs towards commercially sound and financially independent ventures in the medium term, top Treasury sources told ‘Daily News’ yesterday.

In this backdrop, the Department of Public Enterprises with new leadership have now focused on key policy priorities including the followings in order to create more productivity and furtherance of development initiations through the wider SOE sector. They include calling upon a medium-term strategic plan from the Chairman and Board of Directors of each SOE, identifying the possible business growth strategies, including business mergers, amalgamations and business process reengineering, where necessary and make them actionable to get the maximum return for the public investments.

These strategies will bring in necessary amendments to the Schemes of Recruitments (SORs) for the identified key positions of strategically important SOEs focusing on recruiting industry expertise and professionals to improve the operational efficiency and prudent decision making.

The strategies also review the strategic plan and give the specific targets with robust Key Performance Indicators (KPIs) to each SOE. Proper capacity enhancement programs will be introduced for the boards of directors and senior management collaborating with professional bodies.

Strong monitoring mechanisms will be established for all SOEs at the Treasury level and the Line Ministry level. However, implementation of these strategies is being concerned on the COVID-19 tensions; these initiatives are in the pipeline with gradual adaptation with the recovery of the business environment back to normal.

Anyway, the importance of state presence in business is being highly experienced in the social distancing phenomena in terms of providing an uninterrupted public service delivery without considering entity-specific financial constraints, especially in health, transport, energy, banking, aviation and retail sector.

The State-Owned Banks particularly played a vital role in implementing the credit relief scheme introduced by the government to support those businesses hit by the COVID-19 pandemic.

Further, the government will make continuous financing support to the SOE sector by way of budgetary support, Treasury guarantees, refinancing with an aim to revitalize the economy under the global financial distress. Nonetheless, all the SOEs should look at their value chain to identify the risks emerged on COVID- 19 pandemic and to come up with new strategic moves to reshape their business models in line with the opportunities created and challenges faced under pandemic conditions.