Financial Times

More state bodies to be restructured-PERC
Lanka Mineral Sands, the National Lotteries Board and the Sugar Cane Research Institute are among the government organisations being considered for appropriate restructuring by the Public Enterprises Reform Commission (PERC), its chairman Chrisantha Perera said.

PERC has also received Cabinet approval for divesting the State Timber Corporation and the Kahatagaha Graphite Mines, he said in an interview. "We're looking at a commercialising concept for the Sugar Cane Research Institute," Perera said. "We're also looking at the existing off-line operations of the National Lotteries Board and re-looking at the on-line lotteries concept."

These were among the 50 institutions sent to PERC by the government for restructuring. "We don't actually advertise the institutions we're in the process of restructuring till the Cabinet formally approves it," Perera explained, adding that this was to avoid unnecessary speculation. "We just got Cabinet clearance for 10 farms under the National Livestock Development Board with six on a management concept and four in the form of divesture," he said. "We're working on the 51 percent divestiture of Elkaduwa Plantations and are looking at the remaining seven cluster bus companies as a public - private sector partnership."

Perera said the government and the Indian Oil Corp were close to finalising the transaction for the 100 petrol sheds it acquired from the Ceylon Petroleum Corp and the one-third investment in the common user facility company that has the storage facilities. "We have come to a level where both parties are reasonably close to an acceptable price," he said. "When you start a negotiation process there's always a gulf - the one who is trying to sell will ask for the moon while the one who is trying to buy will try to have it as cheap as possible. That has narrowed to an extent and we can conclude the deal satisfactorily."

PERC is also in the process of identifying the third player in the petroleum retail business through an open competitive bidding process and business proposals from 22 parties are due by October 21.

Perera, who became PERC chairman in May, said the organisation, which had previously lost some staff, had now been reorganised and strengthened. "We're focusing on making PERC a very professionally run and managed institution. Not that it wasn't earlier. It always was. We're trying to strengthen that."

"We're trying to work through structured teams headed by a director, with a senior manager, a manager, and a concept called young professionals," Perera said. "We hope to have four such teams to handle transactions. We also have four consultants - three senior public servants and a senior private sector member."

Asked about the Ibis bus deal, Perera said that since there was a Supreme Court order PERC is unable to proceed with finalising the contract for the six cluster bus companies.

"Independent of that we started working on the balance seven bus companies with a reconstituted steering committee," he said. "We have the financial advisers in place and are looking to see how we can re-open the process in a sensible, transparent, clearly defined manner and call for expressions of interest."

If the court case regarding the other six companies is resolved by then, they too will be included with the aim of forming a public-private sector partnership for all 13 cluster bus companies.

"We also discussed alternatives if there are no possible takers for these clustered bus companies such as divesting them in smaller units," he said. "Ultimately we like to move from the current solely government owned bus services into a public - private sector partnership, an essential feature of which will be that the government owns the companies but divests a minority stake with management."

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