Performance Report 2017

The Department of Public Enterprises (PED) was re-established in 2002 to improve the performance of State-Owned Enterprises (SOEs) through enhanced corporate governance by monitoring the performance of SOEs and establish finance control over Public Corporations under the Administer Part II of the Finance Act No 38 of 1971. State Owned Enterprises (SOEs) continue to play a significant role in the country’s economy with its presence in key sectors such as Ports, Energy, Banking, Insurance, Water etc. At present, out of 400 State Owned Enterprises (SOEs), 264 SOEs are monitored by the Department of Public Enterprises while 136 SOEs fall under the supervision of the Department of National Budget. Of the SOEs under the purview of the Department of Public Enterprises, 55 SOEs, have been identified as strategically important State-owned Business Enterprises (SOBEs) representing crucial sectors of the economy. SOBEs include Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC), Sri Lanka Ports Authority (SLPA) etc. During 2017, 55 SOBEs alone have recorded a total turnover of Rs. 1755.55 billion which is almost 13.22 percent of the Gross Domestic Product (GDP). Out of the 55 SOBEs 39 recorded a net profit amounting to Rs. 136 billion while 16 made net losses amounting to Rs. 87 billion during 2017. The total asset base of SOBEs grew by 13.6 percent in 2017 over 2016 and it accounted for almost 56.8 percent of the GDP. Although SOE’s occupy a significant space in the economy, it is by no means a reflection of its potential or capacity. In fact, the Return on Assets (ROA) amounting to only 0.64 percent of the 55 SOBE’s is a rough indication that the SOBE’s have not been performing to its full potential. The reasons for such performance ranges from lack of good governance practices including lack of a clear accountability mechanism, policy and legal framework to a weak supervisory role being played by institutions etc.