-By LeN Political Correspondent
(Lanka-e-News -04.July.2025, 11.20 PM) From rusting buses languishing in depots to once-proud corporations reduced to cronyism and debt, Sri Lanka’s state-owned enterprises (SOEs) present a damning ledger of decades of political abuse, gross mismanagement, and financial haemorrhaging. A slow-motion collapse that began in 1978 has, after 45 years, finally driven the island nation to the brink of economic ruin.
Now, with the rise of the National People's Power (NPP) government, the books are finally being opened — and the rot is worse than anyone imagined.
When President J.R. Jayewardene ushered in his market liberalisation reforms in 1978, state enterprises were intended to coexist with private capital — not be left to rot. But rather than becoming leaner or more competitive, many SOEs became instruments of political patronage, dominated by underqualified cronies and manipulated for electoral gain.
“These entities were once the backbone of our economy — in transport, food, energy, construction,” said a senior official in the Ministry of Public Administration, speaking on condition of anonymity. “Now, they’re black holes of waste.”
The numbers are staggering. According to the Finance Ministry’s 2024 consolidated report, losses from underperforming SOEs are estimated to exceed Rs. 8 trillion over the past three decades — roughly equivalent to Sri Lanka’s total external debt before its default in 2022.
Yet beyond the macroeconomic implications lies a human story of ordinary Sri Lankans being made to pay for the sins of their political class.
One of the most vivid examples of state neglect is the Sri Lanka Transport Board (SLTB). Once hailed as the country’s principal mass transport provider, the SLTB today has hundreds of buses lying idle — many requiring only minor repairs to become operational.
During a recent unannounced inspection tour, the new SLTB Chairman discovered entire depots filled with decommissioned buses. “We found buses that simply needed brake pads, light repairs or tyres — and yet they were left to rust,” the Chairman told The Times. “Who benefited from ordering new buses when older ones could be repaired? That’s what we’re now investigating.”
Sources close to the probe allege that parts procurement has become a major conduit for kickbacks and fraud, with insiders benefitting from inflated tenders, ghost repairs, and systematic misreporting.
In the retail sector, the story is no less shameful. Sathosa — the state-run supermarket chain once aimed at protecting consumers from food inflation — has become a monument to corruption. Former insiders say the organisation was used repeatedly by politicians as a cash cow to fund election campaigns and favour networks of suppliers with opaque contracts.
A retired procurement manager told The Times, “I had to sign off on orders that never arrived. Entire truckloads of sugar or rice would disappear from the system. You question it — and you're sidelined.”
Likewise, the Building Materials Corporation (BMC), once responsible for supplying low-cost cement and materials to public housing projects, has effectively collapsed. Its warehouses today serve more as political party storage spaces than functioning supply hubs.
A particularly controversial case has emerged involving former Foreign Minister Ali Sabry, who, during his tenure, appointed his brother, Mohammed Uwais, as Chairman of the Ceylon Petroleum Corporation (CPC) — Sri Lanka’s main state oil distributor.
Uwais, a lawyer with no proven track record in public sector management or the energy industry, lasted barely three months. During his short stint, internal memos — reviewed by The Times — reveal organisational paralysis, indecision over key import contracts, and a near-standstill in refinery operations.
“The CPC became a joke,” said a former board member. “He couldn’t even chair a technical meeting. It was a disaster waiting to happen — and it did.”
NPP officials now say this is just the tip of the iceberg. A formal probe into politically motivated appointments to SOEs over the past 40 years has been launched. Already, dozens of files from the ministries of Energy, Commerce, and Public Enterprises have been reopened.
The NPP government, under increasing pressure to restore credibility to the state apparatus, has vowed to overhaul the entire governance structure of SOEs.
“We cannot keep throwing taxpayers' money into bottomless pits,” said the Finance Minister in a recent address to Parliament. “We are looking at a new audit mechanism — one that is entirely independent and transparent, similar to the Japanese model.”
In Japan, third-party audits of government-funded projects are routine, with oversight handled by certified private-sector accounting firms rather than political appointees. Results are published biannually and are subject to public and parliamentary scrutiny.
Sri Lankan policy reformers argue such an approach is essential if the country hopes to attract serious investment and regain public trust.
The NPP’s new Audit and Accountability Commission is expected to review all SOE appointments, expenditures, procurement contracts, and asset holdings dating back to 1978. Already, several high-profile figures — including ex-chairpersons and board members — have been called in for questioning.
There is also talk of asset recovery. “We are following the money,” said a government investigator. “Some of the looted funds ended up abroad, in property, luxury assets, and overseas bank accounts. We are working with international partners to trace and recover them.”
For many Sri Lankans, this moment of reckoning is long overdue. Decades of impunity have left deep scars — not just on the nation’s books, but on the national psyche.
“The damage is generational,” said a university economist. “We are now repaying debts on loans taken to fund corruption. It's why we’re bankrupt.”
Diplomats in Colombo, too, are taking note. Western development partners and multilateral lenders have called on the NPP to match its rhetoric with reform — and to ensure that the current anti-corruption drive does not become selective or politically expedient.
But for now, the mood in Colombo is one of cautious optimism. For the first time in decades, state corruption is being called out, names are being named, and the public is watching closely.
As one political analyst put it: “This isn’t just about buses, groceries or oil. It’s about justice — long delayed, but hopefully no longer denied.”
(The photo shows the Mahaweli Authority's largest machinery repair unit being destroyed.)
-By LeN Political Correspondent
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by (2025-07-04 23:08:37)
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