Governance Issues in the State-Owned Business Enterprises in Sri Lanka

Sri Lanka is characterised with a fairly large public service which represents a considerable portion of GDP. In 2022, the total loss incurred by Sri Lankan SOBEs is Rs. 744.7 billion , which was a major reason for the fiscal deficit. Highest losses made by CPC and CEB where the combined losses have increased to more than 1.5 percent of GDP. Despite many other issues, governance issues have been affected significantly for the poor performance of CPC and CEB. One of the solutions is to privatise the two entities since Sri Lankan experience with privatization has proven increased performance in terms of productivity, efficiency and effectiveness. However, according to the current government policy, privatization is not possible. Therefore, in this article reformation of the two SOBEs is suggested which needs further research.