Mar 01, 2017 (LBO) –Sri Lanka will introduce key performance indicators to five state owned enterprises (SOEs) operating in the island for a period of three years commencing this year, a cabinet proposal states.
Enhancing oversight and financial discipline of SOEs was a major concern raised by the IMF in order to grant the Extended Fund Facility.
Accordingly, CEB, CPC, National Water Supply Board, Airport & Aviation Services and Sri Lanka Ports Authority will be subjected to the new process.
As per the cabinet proposal, a new concept of Statement of Corporate Intent (SCI) will be introduced on a pilot basis for these major enterprises.
It is expected to enhance performance and increase monitoring capacity of public enterprises, line ministries and ministry of finance.
The key strategy would be encouraging and facilitating these SOEs to be self-efficient through improved corporate practices, management reforms, innovative financing, strong and prudent financial management, exposure to competitiveness and international best practices and effective human resource management while enhancing public accountability.
A technical mission had been appointed by IMF to advice authorities on the development and completion of SCIs for these respective five SOEs.
“The mission had several discussions with the officials of relevant ministries during 2015 and 2016,” the finance minister said in a cabinet note.
“The last meeting with the mission was held on 8th December 2016. Respective SOEs have already submitted draft SCI documents which have been prepared based on various assumptions and with KPIs.”
SCI is a tripartite MOU to be signed by Treasury Secretary, Secretary of relevant line ministry and chairman of respective SOE.
Statement of Corporate Intent or SCI includes four main key performance indicators:
Target for each Key Performance Indicator (KPI) for next 3 years
Forecast for the financial impact of all noncommercial goods and services
Detailed budget and financial forecast for next 3 years
Capital investment plan