Bureau set up to close 'white elephant' institutions also consumed 350 million rupees

A special unit tasked with closing or restructuring 32 loss-making state-owned enterprises in Sri Lanka has incurred significant expenses without delivering on its goals, according to a recent report from the National Audit Office.

The unit, initially established in 2023, has reportedly spent around 350 million Sri Lankan rupees ($9.5 million) on its operations and consultancy services. Between 2023 and 2025, approximately 160 million rupees were allocated for the unit's maintenance, while consultants were paid a substantial 193 million rupees.

Despite these expenditures, the unit has failed to meet its intended objectives. Its mandate was initially set to be completed by December 31, 2024. However, following cabinet approval on November 4, 2025, the unit's name was changed to the State Enterprise Reform Unit, and its functions were reassigned under the Ministry of Finance, Economic Development, and Public Administration.

Consultancy services for these restructuring efforts were engaged through two contracted foreign firms. These findings are detailed in the audit report included in the Ministry of Finance's 2025 annual report, highlighting concerns over the effectiveness and financial management of the state enterprise reform initiative.