Government imposes cost-cutting measures on SOEs
The cash-strapped government has cut the monthly allowances and other facilities of chairmen and directors of 422 State Owned Enterprises (SOE) while issuing guidelines for streamlining public sector administration.
Payment of allowances and providing transport facilities to Chairmen, Executive and Non-Executive Directors and observers are amended with effect from January 1, 2020.
This was stipulated in a Public Enterprise Department circular issued by Treasury Secretary S.R. Attygalle recently. According to this, the Chairman of any SOE could only draw a monthly allowance of Rs.100,000 per month and other allowances and he will be entitled to use only one official vehicle with a fuel allowance equivalent to 150 litres per month.
The previous limit of this monthly allowance was in the region of Rs.100,000 to Rs. 125,000 plus telephone allowance, vehicle allowance, fuel allowance, driver allowance, entertainment allowance and many other allowances.
Other allowances work out to at least an additional Rs.75,000 per month, official data revealed.
Board members of SOEs have been barred from using official vehicles other than for the purpose of attending board meetings.
They are entitled to a monthly allowance of Rs. 25,000 regardless of the number of board meetings held within the month. Earlier they were paid Rs.10,000 per sitting at a board meeting irrespective of the number of meetings per month.
However allowances specified in this circular will not apply for some SOEs and those amounts will be decided by the Minister and Secretary of the line ministry and Board of directors of the relevant institutions considering the competitive market rates paid by similar institutions.
These institutions are state owned banks, SriLankan Airlines, Sri Lanka Telecom, Sri Lanka Insurance Corporation, Associated Newspapers Ltd, and Thomas De La Rue Lanka Ltd etc.
Chairmen and board of directors of most of these state owned entities are yet to be appointed, trade union leaders said adding that the new programmes cannot be implemented under the present set up.
These institutions are functioning virtually headless, they complained.
“Appointment of working directors (a common practice earlier) has been prohibited while all Chairmen and the Board of Directors must make a comprehensive assessment of the operations of the entities at the outset specially related to the operational status, human resources and financial position,” the circular stipulated.
SOEs have been directed to pay particular attention to rationalise and control the expenditure relating to advertising, marketing and promotional budgets with special control over fuel, electricity, communications, travel, use of vehicles, purchase of office equipment, furniture and other office facilities.
All procurements must be undertaken having followed the due procedures and all SOEs must have a procurement plan approved by the Board of Directors.