Sri Lanka has announced yesterday that it has begun the privatization program required under the bailout agreement with the International Monetary Fund (IMF) and decided to sell a failed hotel project in the country. Government spokesperson Nalinda Jayatissa said the cabinet has agreed to resume the work started by the previous government to sell shares of “Canwill”, a 100% government-owned company established in 2011, which had been halted. The sale of Canwill marks the first privatization effort under the presidency of Anura Kumara Dissanayake, who describes himself as a Marxist.
Jayatissa told reporters that the company’s sale process will be handled by Deloitte, a professional services firm. The government said Canwill, which has been given $61 million in capital, needs at least an additional $120 million to complete its 47-story, 458-room beachfront hotel in Colombo. With no prospect of securing the funds needed to finish the project, the new government decided to sell the asset. The company also owns another property on the southern beach of Lanka.
The IMF provided a $2.9 billion loan to Sri Lanka in early 2023, after the country declared bankruptcy in April 2022, unable to pay its $46 billion foreign debt. The IMF loan conditions included reforming loss-making state-owned enterprises. Under the IMF bailout program, 52 state-owned companies that require spending from the state budget need to be reformed. During his presidential campaign, Dissanayake spoke against selling state assets. He had been saying that instead of selling companies, he would reform them and make them profitable. However, after coming to power, he has decided to continue the IMF program as it was previously.
