Draft legislation of Public Enterprise Development Act ready
View(s):Draft legislation of the Public Enterprise Development Act, providing for governance and efficiency for state owned institutions has been prepared by the Ministry of Public Enterprise Development, officials said. They said that the Act will facilitate the setting up of a Public Enterprise Development Board (Board) under which all State Owned Enterprises (SOEs) will be positioned. They said this draft, prepared in consultation with the Ministry of Finance, empower this particular board to make appointments to all state institutions. The proposed legislation has been modelled on the lines of Singapore’s Temasek model and Malaysia’s best practices.
Eran Wickramaratne, Deputy Minister Public Enterprise Development, told the Business Times that the draft is still at the stage of internal discussion. This proposed law will set up a mechanism for state-owned enterprises which will scrutinise their performance, governance along with these SOE’s human resource development. He added that this Act will look at creating ‘independence’ for the management at the SOE’s.
Another Ministry official said that unlike in the past, appointments to all state institutions under this board will be carried out in a transparent manner. “Strict guidelines on appointments to all state institutions will be set by this board,” the official said adding that the qualifications of board members at the SOE will be strictly perused.
According to him, the right skills and competencies to strengthen the capacity at board-level in the SOE will be a top priority. He said that all state enterprises will be monitored by the Board taking account of their objectives and nature of operations. According to him a performance target based on periodic reviews of their operational performance and financial reports will be carried out by this Board (according to certain clauses in the Act) and shall include statements of objectives, operations (with particular reference to the provisions of non- commercial services), financial assistance from Government, etc.
He also said the Board will have the power to hold, improve, manage, develop, alter, extend, equip, furnish, repair and maintain the SOE and the Act has provided for the Board to enter into any covenants or agreements in respect of the SOE. “The Board can sell or dispose of, turn to account or otherwise deal with any property vested in the public enterprise; to direct the board of a subsidiary where it has a controlling interest, by written notice to amend the statement of corporate intent to be consistent with that of the public enterprise.” The Minister added that this Act will implement the reforms to the SOE’s on a stage by stage basis. -(Duruthu)