Sri Lanka’s profits and losses; a super profit making central bank is not good news

Apr 19, 2010 (LBO) - Two news items hit the headlines of media simultaneously last week. Both relate to the year 2009 and are sourced to the Central Bank Annual Report for the year. One is the news on the key state enterprises making colossal losses. The other is the news on Central Bank’s making unprecedented profits. State enterprises making losses is bad news. But, Central Bank’s making super profits, though it appears to be a good performance, is very bad news.

Public Enterprises Making Losses

The five big loss makers which were once categorised as the ˜biggest monsters’ by the Minister of Finance, plus the Sri Lankan Airlines, have made operating losses amounting to whopping Rs. 48.6 billion in 2009. The detailed distribution is alarming: Postal Rs 2.4 billion, CEB Rs 7.4 billion, CPC Rs 12.3 billion, SLTB including the government subsidy, Rs 9.3 billion, Railways Rs 4.8 billion and Sri Lankan Airline Rs 12.2 billion.

In addition, Mihin Air, government’s pet budget airline, has made an operating loss of Rs 930 million on top of its previous losses amounting to Rs 3 billion absorbed by the government earlier. These numbers just present the differe