Sectors such as telecommunication, insurance, and some of the infrastructure sectors, which are crying out for private investments, are in for listing this year

Ramalingam Paskaralingam, government adviser

The changes were made in anticipation of more cash inflows as peace talks between the government and separatist Tamil Tigers to end the 18-year conflict civil war showed progress.

The level of foreign direct investment plunged to $80m last year from a record $231m in 2000 due to political instability, a major Tamil Tiger attack on the country's only international airport, and the global economic slowdown.

The government and Tamil Tigers, who are fighting for an independent state in the north and east, have signed a ceasefire and are due to start direct peace talks in June.

Privatisation plans

Up to 15% of Sri Lanka Telecom will be sold in a public offer in August, state-owned Sri Lanka Insurance will be privatised and Ceylon Petroleum, the sole importer and refiner of oil, is being restructured before it is broken up and sold off.

"Sectors such as telecommunication, insurance, and some of the infrastructure sectors, which are crying out for private investments, are in for listing this year," said Ramalingam Paskaralingam, a former finance secretary and adviser to the government on policy development and implementation.

Other areas targeted for private investment included the construction of roads, supply of water, and electricity production and distribution.

The Budget last month projected revenues of 21bn rupees ($218m) from state asset sales this year, up from 8.5bn rupees last year.

The Board of Investment of Sri Lanka have said it hoped to attract $300m in foreign investment this year.

Sri Lanka's economy contracted for the first time in half a century last year, showing a decline of 1.3%.