IMF seeks Govt to fast-track restructuring SriLankan Airlines

The International Monetary Fund (IMF) emphasised the need to fast-track the process of restructuring SriLankan Airlines, and to see more progress related to other state owned enterprises (SOEs).

 

In a virtual press conference, IMF Mission Chief for Sri Lanka Evan Papageorgiou said that the authorities concerned had undertaken steps in preparing a medium-term strategic plan to restore the operational viability of Sri Lankan Airlines and to resolve its legacy debt.

 

“We know that the current budget has set aside Rs. 20 billion rupees to pay off some of the debt of the airline. We are also aware that Sri Lankan Airlines has also hired a financial advisor to restructure its international bonds. But we think these need to pick up pace so we can have a good resolution of all these outstanding issues. In general, with SOEs, we think there is a way forward. We want to see more progress there,” he said.

 

He said there the government had committed in general from the beginning of the programme to strengthen governance of SOEs, to get to the bottom of their outstanding debt and resolving legacy debt.

 

The operation of SOEs without a burden to the state, containing risks from the guarantees issued to SOEs, refraining from foreign exchange borrowings by them, and making them more transparent are among conditions stipulated. Publication of audit reports of 52 SOEs in a timely manner is also highlighted.

 

“It is also important to ensure that consumers of services of these SOEs receive the best value for the price they pay. Obviously that relates to a wider range of SOEs, including also the electricity and the fuel sector. This is the same thing as you would expect from a private company. In other words, you would want SOEs run in the most efficient manner purely on a commercial basis and ensure that they are dependable and free of corruption,” he said.

 

Asserting that the growth is on the rebound, the reserve accumulation and structural reforms in progress, it is ‘very important’ to note also that debt restructuring is nearly complete and the government's commitment to programme objectives remains steadfast.

 

“However, we must also acknowledge the significant downside risks posed by global trade policy uncertainty. Should these risks materialise, we are prepared to work collaboratively with the authorities to assess their impact and formulate appropriate policy responses within the framework of the IMF-supported programme. The country's achievements under the ambitious reform agenda have been commendable,” he said.