Mar 15, Colombo: The Finance Ministry of Sri Lanka government is set to sign Statements of Corporate Intent (SCI) with five selected state-owned business enterprises today aiming to enhance their contribution to the nation's Gross Domestic Product (GDP).
Cabinet of Ministers on February 28 approved the move proposed by the Minister of Finance Ravi Karunanayake.
The concept will be applied for public enterprises to encourage and facilitate to sustain those enterprises independently without depending on treasury.
It is expected to improve financial efficiency through improved corporate practices, introduce innovative financing, maintain strong and prudent financial management, offer exposure to competitiveness and international best-practices and create effective human resource management while enhancing public accountability.
Initially, five state owned business enterprises namely, the Ceylon Electricity Board, the Ceylon Petroleum Corporation, the National Water Supply and Drainage Board, Airport and Aviation Services Ltd and Sri Lanka Ports Authority which are strategically important enterprises for the government have been selected to sign this Statement of Corporate Intent.
The Statement of Corporate Intent (SCI) is a tripartite Memorandum of Understanding to be signed by Secretary to the Ministry of Finance, Secretary of relevant line Ministry and the Chairman on behalf of the Board of Directors of the respective state-owned business enterprises.
The SCI includes key performance indicators linked to Corporate Plan, Action Plan and Annual Budget of the state owned business enterprises for a period of three years stating from 2017. In addition, the impact of all non-commercial operations by the state owned business enterprises are also taken in to the account and included in the SCI.
The SCI will enable to contribute positively to the strategically important state owned business enterprises towards achieving Sri Lanka's economic goals by enhancing the contribution making to the GDP of the country.
"In achieving the set objectives of these SOBEs, the key expectations of the government are to encourage and to facilitate these SOBEs to improve the operational and financial efficiency through improved corporate practices, innovative financing, strong and prudent financial management, exposure to competitiveness and international best-practices and effective human resource management while enhancing public accountability," the Ministry said.
The SCI provides more transparent and accountable information stream to the real stakeholders.
The Ministry of Finance says, on the success of the implementation of this priority program, the government is expecting to extend this move to other state-owned enterprises as well. There are more than 350 state owned enterprises that can be identified as corporations, banks, academic institutions, statutory boards and public companies.