In a decisive move to enhance the profitability of state-owned companies, the government has announced a series of measures aimed at reducing reliance on government financial support for these entities. This announcement follows a Cabinet meeting where a paper presented by the Ministry of Finance was thoroughly discussed.
Principal Secretary to the President on Public Policy, Abdulla Nazim, elaborated on the government’s strategy to reform state-owned companies. A key aspect of this strategy involves revising the classification system for these companies and establishing specific Key Performance Indicators (KPIs) for each entity. These measures are intended to foster a more performance-oriented culture, encouraging improvements in operational efficiency and financial health.
A significant step in this reform is the three-month timeframe set for identifying the future operational models of various state-owned companies. This process will categorise companies into those that will be nationalised, those to operate under public-private partnerships, and those to be opened for Initial Public Offerings (IPOs) through share sales. Additionally, companies have been given a three-month period to implement necessary changes to strengthen their management structures, including the enhancement of sub-committees for audit, nominations, and remuneration.
The Cabinet has also resolved to establish specific criteria for the provision of subsidies to state-owned companies, aiming to streamline and strengthen the process of subsidy allocation and capital infusion. Moreover, actions against underperforming companies have been discussed, with plans to bolster their operations and provide cash flow adjustments. These companies will be given a deadline of six months into the next year to demonstrate significant performance improvements, with the possibility of initiating stringent measures if required.
Nazim further revealed that the government intends to introduce robust regulations within the next three months to reinforce these strategies. In a related development, the government has decided to establish a new company to support the implementation of its infrastructure development projects. This move aims to alleviate the workload currently shouldered by the Maldives Transport and Contracting Company (MTCC) and to facilitate more efficient project execution.
These reforms are part of a broader initiative to strengthen corporate governance, reflecting a key aspect of the President’s agenda. With these measures, the government aims to usher in a new era of financial sustainability and operational excellence for state-owned enterprises in the Maldives.