July 23, 2010 (LBO ) – Sri Lanka will set up a state company to develop joint ventures and lease assets of other failed state companies with a capital of 100 million rupees, without ‘privatizing’ them, a government minister said. The State Resources Management Corporation will make better use of state assets which are uneconomical, minister Keheliya Rambukwelle said.
Analysts say Sri Lanka’s state has lost billions of rupees trying to do business with people’s money. Last year just seven state enterprises, including those with monopoly protection, lost more than 50 billion rupees, or around one percent of gross domestic product.
But the new company will manage mostly smaller firms. The government now had 107 fully government owned corporations and 146 other commercial ventures.
The state also owned residual stakes in 23 state plantations. Plantations were originally built by foreign and local people, but were appropriated by the state and made to run losses and salaries were paid with monthly Treasury supplements.
In the 1990s they were later sold to the private sector and now pay an annual rent on land leases in addition to taxes on profits.
The firms were estimated to have around 800 billion rupees in