New public enterprise law in the offing

by Rukshana Rizwie

A new Public Enterprise Act has been proposed by the Prime Minister's Office in a concerted effort to reign in State-owned-enterprise (SOE) under a government owned investment company. Authoritative sources said the draft bill is being reviewed by technocrats in a bid to reform the bloated behemoths under the guise of an overhaul.

Sources added that a market-minded approach may work in favour of the economy, if operational politics is reined in. "There are many aspects of the bill that favour the introduction of a new entity through a parliamentary act, but opposition from within may defeat the purpose." The section pertaining to SOE's in the 2016 Appropriation Bill envisioned reforms that reflect a Singaporean approach, where a State-owned assets management holding company such as Temasek or Malaysia's Khazanah, which would focus on long-term returns than deal with operational details.

Chairman, Strategic Enterprise management Agency, Asoka Abeygunawardena said the SOEs should be brought under the purview of one entity, both recognized by all stakeholders and would require accountability from all SOEs.

"This dream of a bold market reform has been there for years," said Dharshana Senanayake, Director General, Department of Project Management and Monitoring, which comes under the purview of the Ministry of National Policies and Economic Affairs. Senanayake said, there is concerted effort by the higher echelons of the government to inject a dose of discipline and promote better corporate governance.

Earlier this week, the National Policy and Economic Affairs Ministry Secretary, M.I.M. Rafeek, issued a circular to all Ministry Secretaries, calling for a report on their organizational Key Performance Indicators (KPIs) for the first quarter of the year ending in April. "This time, I will be sending letters to heads of boards at the SOEs," Senanayake said. What's different this time? "A format," she said."We want to ensure that everyone tows the same line.

So we're sending them two requests: One is to report back to us with their respective KPIs by mid February and an action plan which is KPI-oriented but not impractically ambitious." She added that the issue was not about formulating the KPIs but sticking to them and achieving goals that are practical. The response, according to Senanayake, has been verbosely positive though she is yet to experience reciprocity on paper.

The Strategic Enterprise Management Agency (SEMA) was set up in May 2004 by former president Chandrika Kumaratunga in response to the privatization of debilitated State-owned Strategic Enterprises (SoSEs). SEMA still comes directly under the President with a mandate that has remained unchanged since its inception.

"The mandate has not changed, but the validity of this entity which is also meant to manage and oversee the SOEs is in question," a top source at the entity noted.