Deep dive into SOE financials: MVR 4b for companies
During the first seven months of this year, MVR 2.8 billion has been allocated to government companies from the subsidy budget.
There are 23 government-owned companies and the annual budget requires expenditure to run these companies. However, the expenditure figures are very high.
According to statistics obtained from the Finance Ministry under the Right to Information Act, the budget has paid MVR 4 billion to companies in the seven months since the government took office.
Most of the expenditures have been incurred by the companies to reduce the prices of goods and services they sell and as capital to run the companies.
1.4 billion as capital for companies
The government has provided a total of MVR 1.4 billion as capital to 21 companies. The five companies with the highest amount of capital are:
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Fahi Dhiriulhun Corporation - MVR 380.4 million
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Fenaka - MVR 192 million
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Fund Management Corporation - MVR 190 million
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RDC - MVR 119.6 million
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HDC - MVR 85 million
The next companies that have been given capital are:
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WAMCO - MVR 59 million
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MMPRC - MVR 59.4 million
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Regional Airports - MVR 60 million
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Addu International Airport Company - MVR 54.3 million
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SME Bank - MVR 20 million
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MITDC - MVR 9 million
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Business Centre Corporation - MVR 8 million
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Kahdhoo Airport Company - MVR 7.5 million
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Tradenet - MVR 6.3 million
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Aasandha - MVR 6 million
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Post Limited - MVR 10.8 million
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Sports Corporation - MVR 3 million
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Hajj Corporation - MVR 3 million
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PSM - MVR 82 million
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Fund Management Corporation - MVR 38 million
Most of the subsidies allocated in the state budget to reduce the prices of oil, basic food items and services have to be paid through government companies.
During the first seven months of this year, MVR 2.8 billion has been allocated to government companies from the subsidy budget. The subsidised companies are:
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Oil and sugar, flour, rice subsidy to STO - MVR 1.2 billion
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Electricity price reduction to Fenaka - MVR 597 million
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HDC to reduce rent of shelter flats - MVR 433 million
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Fishermen subsidy to MIFCO - MVR 273 million
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Ferry and bus MTCC for service subsidy - MVR 143 million
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STELCO to reduce electricity prices - MVR 90.5 million
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WAMCO to reduce waste disposal services - MVR 18.2 billion
The budget has released MVR 4 billion to companies during the seven months of this government, including capital and subsidies.
A finance ministry official said the huge expenditure incurred by the companies is a huge burden on the budget. The official said the move puts a burden on the weakened financial situation.
"Companies are going to spend a lot of money. The leakage is very big. Therefore, the government is taking steps to reduce the cost of companies," the official said.
The government has already decided to liquidate some companies and merge others to reduce costs.Some companies are also cutting staff. It is not yet clear how much cost it saves.
