Finances
Like several state-owned enterprises in the country, Sri Lanka Railways regularly incurres large financial losses. It has not made a profit since 1943. As of May 2007, the railway makes a revenue of about three billion rupees, but requires a state subsidy of seven billion rupees to balance its budget.
It faces the challenge of addressing high operational and infrastructure costs, dealing with a Victorian-era network. The State has been the employer of first resort, which has caused the railway to be overstaffed. Priority needs to be attached to reallocating labour from less to more productive employment activities.
The railway also faces the need to rationalise underpriced fares. In April 2012, the Central Bank urged state-owed enterprises, including SLR, to adopt market pricing to reduce reliance on the government budget. It called for improved financial management and pricing to make the operation more financially viable.
Read more about this topic: Sri Lanka Railways, Issues