Inept procedures/Govt. officials stalling SOE restructuring
View(s):By Duruthu Edirimuni Chandrasekera,
Cumbersome processes and lethargy of state sector officials are stalling the state-owned enterprises (SOEs) restructuring for multiple reasons, sources said.
According to them most of these processes are stuck at project committees where government officials sit on the boards. “Especially the Hilton, Litro Gas, and Sri Lanka Telecom are stuck in the project committees,” a source close to the activity told the Business Times.
Certain officials at the Treasury also acknowledge this, saying that some teams in the Ministry of Finance are looking into this allegation. Some said that certain officials are sabotaging the Litro Gas restructuring process. They also pointed to the cumbersome valuation process of certain SOEs which can be done away with easily. “Already there have been multiple drafts on the valuation of entities such as Hilton and Lanka Hospitals the officials at the valuation meetings want to display their knowledge on valuations etc. and the whole thing gets dragged on,” one official noted.
Another source close to the restructuring process noted that one of the main reasons these projects are stuck at the committee level is because of the cumbersome procurement procedures that officials have to follow to the ‘T’. She said that government sector officials on these committees have to attend certain meetings each week. “They are tired of going to these meetings each week,” she added. These committees are inundated with complicated procurement processes and documentation and the restructuring exercise invariably gets stuck, the official added.
Noting that divesting the Hilton Colombo and Lanka Hospitals which are low-hanging fruits is taking too long, a second official said that the time lapsed since the State-Owned Enterprise Restructuring Unit (SOERU) was set up without any transactions being done, does not justify the restructuring process.
A private sector official close to the restructuring process noted that the money spent on the consultant etc is also wasted along with the effort.
However, the proponents of this procedure noted that due diligence has to be followed. “How many divestitures in the past were reverted after so many years by the Supreme Court due to processes that were not followed? It must be noted that not only restructuring but the SOERU is also involved in building confidence in Sri Lanka, especially investor confidence. This process is taking time because the due diligence is followed and they do not want to deviate from the said process because of the past bad experiences in restructuring,” an analyst said.
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