COLOMBO: Sri Lanka would use the stock market infrastructure to sell down stakes in state-owned enterprises, which will enhance transparency, after political consensus has been achieved within the ruling coalition, Deputy State Enterprises Minister Eran Wickramaratne said. “Actually, we have set in place the process to market some of these institutions that are completely owned by the government,” Wickramaratne said. “We may want to release shares in stages, and hold on to a portion of it.” Wickramaratne said a formula to give shares to longstanding employees is also being considered.
Sri Lanka’s Prime Minister Ranil Wickremesinghe and Finance Minister Ravi Karunanayake has said repeatedly that ‘non-strategic’ SOE including hotels and hospitals will be sold. Such selloffs can fast-track domestic and foreign direct investment, and signal that Sri Lanka has changed tack from the policies followed by the Rajapaksa administration, economic analysts say. Critics say the current administration is now bogged down in Rajapaksa era policies of price controls, mis-using and expanding state enterprises, and had also slapped retrospective taxes, harming the investment environment the same way expropriation did in the last regime.
Meanwhile, Wickramaratne said political consensus within the coalition was key to taking the process forward. “As the next step, a political decision will have to be made as to the special situation (involving the coalition government) as well as to the timing,” he said. “That is a political decision. We will obviously reach an agreement.” Sri Lanka’s Colombo Stock Exchange already has a mechanism to sell ‘all-or-nothing’ stakes. The state also controls several listed companies or has large stakes in them, such as Lanka hospitals.
