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State enterprises to be made lucrative ventures:
Country-oriented policies vital for sustainable development
By L.S. Ananda KANNANGARA
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Dr. Willie Gamage
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Sri Lanka should pursue country-oriented policies to achieve
sustainable development, said State Resources and Enterprise Development
Ministry Secretary Dr. Willie Gamage.
In an interview with the Sunday Observer he said that his ministry
transformed many unprofitable State enterprises to revenue generating
entities through structural changes.
Excerpts of the interview:
Q: The Ministry of State Resources and Enterprise Development
will launch a program to transform unprofitable State institutions to
profit-making ventures. Could you elaborate?
A: The 26 State institutions under this ministry fall into
three categories such as profit-making, those that could be transformed
into profit-making ventures - and those still running at a loss.
The loss-making institutions have to be revitalised differently
profit-making institutions such as mineral sand have to be made into
lucrative ventures. Mineral sands in the sand beds are found abundantly
along the Eastern Coast.
The Lanka Mineral Sand Company earned a profit of Rs. 1.2 billion
last year and Rs. 601 million was remitted to the Treasury.
We have allocated Rs. 400 million to import new machinery to further
develop the industry.
Q: What is the current State of the Eppawala Phosphate Company
and Paranthan Chemicals Company.
A: At present only 46,000 metric tonnes are being produced
annually. At this rate of operation the resource base would be
sufficient for over 1,400 years.
We should accelerate the production and make use of the deposit to
bolster our economy.
Q: The government spent Rs. 30 billion for fertilizer subsidy
last year. Could we not make use of the Eppawala phosphate deposit in
the manufacture of fertilizer locally?
A: For paddy cultivation we should go for super phosphate. We
manufacture only rock phosphate for coconut cultivation.
There is a court decision not to privatise the phosphate project.
However discussions are being held with a Japanese company to obtain
the capital and the technical know-how to produce single super phosphate
for paddy cultivation initially 110,000 metric tonnes will be produced
per month.
Even at that scale the resource base will be sufficient for another
80 years. A tonne of imported fertilizer costs Rs. 25,000 while it could
be produced locally for around Rs,. 15,000.
Q: The KKS Cement Factory was another lucrative business
venture. Today, the demand for cement is rapidly increasing. Do you have
any development plans for KKS Cement Factory.
A: The KKS Cement Factory is a huge enterprise with massive
raw material specially the clinker deposits in the peninsula.
Many including foreign companies are inserted in its redevelopment.
The factory will be developed by the government. The resource needs
to be exploited carefully and systematically.
The factory could also be used for cement packaging which efficiently
cater to the development activities in the peninsula, government owned
Lanka Cement Company and Cement Corporation have so far met the local
demand successfully.
Q: Janatha Estates Development Board (JEDB) and Sri Lanka
State Plantations Corporation (SCSPC) incurred losses under the State
management. Could you explain really what went wrong?
A: Lands acquired by the government under Land Reforms Law No.
1 of 1972 was initially vested Land Reform Commissions. They were
subsequently vested in the JEDB and SLSPC. Most of the land vested in
the JEDB and the SLSPC were agricultural land and JEDB and SLSPC managed
the plantations as profitable ventures until mid 1980s. Since late
1980s.
Since late 1980s these organisations began to incur losses to a
variety of reasons such as poor management, inefficiency, corruption.
Some Estates being leased out.
Consequently, the Treasury had to provide disbursements to pay staff
salaries and their EPF and ETF contributions and to maintain the JEDB
and SLSPC.
Later the JEDB and SLSPC lands were transferred to Regional Planation
Companies (RPC) on a 99 year lease.
Most of the profitable and highly productive JEDB and SLSPC tea
estates were alienated leaving the less profitable and less productive
mid country tea lands causing further losses and increased the burden to
the Treasury.
Q: The Strategic Enterprise Management Agency (SEMA) took
drastic steps to change the situation could you explain?
A: As a strategic policy initiative SEMA introduced the
plantation Asset Management Business model for the sustainable
commercial development of the State Plantations by identifying a set of
high return business resources for development rather than continuing as
a traditional planation management business model. This helped reduce
the losses in JEDB and SLSPC.
Q: Paranthan Chemicals Corporation was destroyed by the
terrorists some time ago. What is its present position.
A: At present the factory is in Kalutara and it is functioning
well. We have already located a 50-acre land in Paranthan.
A large chemical factory with the collaboration of the private sector
is in the pipeline.
Q: Sri Lanka's aim is to become self-sufficient and become the
'Wonder of Asia'. How does your ministry work toward goal?
A: With the resources available, it is possible for our
country to be the 'Wonder of Asia'.
The availability of capital and professionals at managerial and
operational levels are vital for prosperity. |
