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| Sunday, 12 March 2006 |
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BOI not a one-stop shop for investors by Gamini Warushamana The Board of Investment (BOI), the prime investment promotion organisation in the country is not a one-stop shop for investors as the President and the cabinet has to intervene to solve investment issues. Minister of Enterprise Development and Investment Promotion Rohitha Bogollagama told a media briefing that issues relating to vital projects valued at nearly US$ 80 million were solved by the cabinet sub committee chaired by President Mahinda Rajapakse at the first committee meeting held on March 3. The projects were held up for several years due to red tape at various government agencies including non allocation of land and approvals left pending. The Minister said the land issue was settled for 200 beds, Jeewaka Seoul Hospital project and two acres of land were allocated at the Open University at Nawala. The project is a US$ 25 million investment. The committee has also allocated two acres of land to Virtusa (Pvt) Ltd for a software development and training centre near the HSBC call centre in Rajagiriya. The US$ 20 million project will provide 3000 jobs for IT engineers. Approval has also been granted to commence work on Hotel Swanee at Beruwela, a US$ 12.5 million investment of Banyan Tree Hotel and Resort, Singapore. The Canal commuter transit project of International Waterways (Pvt) Ltd was also settled at the committee meeting. Investors said that they were waiting for four years to get the land clearance. The project will be implemented in three stages and a boat service will be started from the Parliamentary road Kotte to Wellawatte with eight jetties, operating 16 boats thereby reducing the travelling time between the two destinations to 24 minutes compared to the one and a half hours at present. The design and product development centre of Brandix Apparel is another project cleared by the committee. The US$ 5 million project will improve the value addition of the highly internationally competitive industry, investors said. The committee has also decided to increase private/public partnership in hydro power generation from 10 MW to 50 MW. Investors said that this will increase the hydro power generation in the country by 150 MW in the next 10 years. The master plan prepared 20 years ago is pending approval. The Sunday Observer on several occasions highlighted bureaucratic red tape in the BOI and relevant government agencies with problems faced by the investors. When the long delay in approval of US$ 300 million US and Canadian investment in power project was published, BOI officials denied the allegations. Investors had to canvass support to obtain approval. Thereafter former President Chandrika Bandaranaike Kumaratunga appointed a high-powered committee to settle investment issues during the last days of her tenure. Today again President Rajapakse and the Minister have to intervene to settle investment issues. President Rajapakse, Minister Bogollagama and the new management of the BOI have realised the situation and Minister Bogollagama said that the President has ordered the implementation of the newly approved projects and has warned that any government agency failure will be considered a severe lapse. At the same time investors will have to start their projects within three months. The BOI has not been successful in attracting the targeted FDI to the country or providing facilities for investors. Bureaucratic bottlenecks in the relevant ministries and agencies are the main reasons, but the BOI itself is responsible to a great extent for the inefficiencies in the system. There is a wide gap between agreements signed and projects implemented. Minister Bogollagama said that steps have been taken to minimise the gap with immediate effect. At present before the agreements are signed the investors have to show their capital or assets and projects have to be implemented within three months from the agreed date. Should they fail the agreements will be cancelled, the Minister said. BOI Chairman, Prof. Lakshman R. Watawala said that the minimum foreign investment approved by the BOI has been increased to US$ 250,000 from US$ 50,000. Minister Bogollagama said that all these efforts are being taken to achieve the US$ 1,000 million target in 2006 against US$ 280 million received in 2005. The government expects mega investments in power, telecommunication, real estate and IT sectors during the year. The US$ 400 million coal power project of National Thermal Power Corporation, India, in Trincomalee, Dialog Telekom US$ 150 million, Tritel US$ 50 million, Havelock City housing projects, 300 rural factories, FTZs in Matara and Puttalam are on the list of investments anticipated. |
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