Attitudinal change, vital for development

By Ranil WIJAYAPALA

The State enterprises which were established in 1970s to boost the Lankan economy have become redundant in the early 1980s after the introduction of the open economy to Sri Lanka by President J.R. Jayewardene. From that era many of these Government enterprises started to collapse as they could not cope with the Open economy and become a burden to successive Governments. The Ministry of State Resource and Enterprise Development has been entrusted with the task of restructuring these government ventures into profit making bodies which can effectively contribute towards the national economy.

Dayasritha Thisera a politician hailing from Puttalam district who has climbed the ladder of politics to become a Minister at the last Cabinet reshuffle by President Mahinda Rajapaksa has taken over this task which was dragging on for the past few decades.

Minister Thisera says that his Ministry under the guidance of

President Mahinda Rajapaksa has taken effective measures to revive some of the enterprises which have been closed for years with the participation of the private sector.

The Sunday Observer interviewed Minister Dayasritha Thisera to learn how his Ministry has taken initiatives to revive those government enterprises. Following are the full excerpts of the interview the Sunday Observer had with Minister Dayasritha Thisera.

Q: Could you explain the main objective of establishing the Ministry of State Resource and Enterprise Development and to what extent the Ministry has achieved its goals?

A: If we look at the institutions under our Ministry, many of these institutions were started in 1970s and went bankrupt with the introduction of the open economy to the country. There are some institutions which have been closed due to the prevalence of terrorism in the country. Among these institutions there are profit making institutes and also institutes which are running at losses. Some institutions are running without either any losses or profits. Some factories and institutions have become non-operational due to heavy losses incurred. Therefore, the aim of our Ministry is to strengthen those institutions which are non operational at the moment and also those institutions which are running at losses. Our aim is to restructure those institutions and make them vibrant institutions which are positively contributing towards the national economy.

In this effort we have been successful in certain instances. If we take Embilipitiya Paper Mill, we have taken steps to start its operations after joining with a foreign investor after giving them the paper mill on lease basis. With regard to Kantale sugar factory we are now at the final stage of selecting the investor to start the factory after leasing it out to an investor. In addition to this we are also in the process of selecting investors for the Sri Lanka Rubber Manufacturing and Export Corporation in Mawanella. In all these procedures we have followed the stipulated procedures when calling bids for these institutions and selecting investors. We have completed those processes in a transparent manner from the date I have taken over this Ministry.

There are some institutions which have been closed due to the prevalence of terrorism in the country. Kankesanthurai Cement factory which was closed due to the terrorism prevailed there in the North also such an institute. Discussions are now on to start the factory by next year by forwarding it to the share market. At present we are maintaining Kankesanthurai cement factory without making the employees attached to it a burden to the government by starting a project to manufacture lamp posts, cement bricks. We are paying salaries of the workers through the income raised from that project.

Q:How much is the Government spending to maintain and to pay the salaries of the employees of these institutions billed for restructuring?

A: What is happening is we have to submit Cabinet papers on a monthly basis to pay the salaries of the workers attached to these institutions. Every three months we have to obtain Rs.750 to 800 million from the Treasury to pay salaries of the employees of these institutions. Therefore, what we intend to do is to maintain these institutions without becoming a burden to the Treasury and by leasing out these institutions to investors in transparent manner by obtaining the amount valued by the government.

Q: Restructuring of these institutions were begun somewhere in 1994 after People's Alliance Government came to power ending 17 years UNP regime. But still there is no permanent programme for this. Is this a failure on the part of successive Governments?

A: We have experienced a 30-year conflict situation in the country. Some factories we could not maintain due to the existence of war. The factories like Hingurana Sugar factory, Kantale sugar factory, Paranthan Chemical factory, Valachchenai paper mill we had to run under greatest difficulties. The Government made efforts to revive those factories. But we could not do that due to the war situation in the country. But after the end of war we are now making a fresh effort to restart those factories. I am happy to say many foreign investors are willing to invest many of these ventures after the end of war situation.

For instance an Australian company has been selected for the Embilipitiya paper mill. For sugar companies also we will be selecting some foreign companies.

If we select inefficient companies to run these factories and institutes, it will be a further burden on the Government. So we are careful enough to find investors who are capable enough to run these institutions. Otherwise it will be a waste of money.

For some other institutions also, we call bids of interest but since we did not get bidders willing to pay Government valuation for those institutions we decided to call bids again.

We have decided to give away those institutions only if the country is benefited from that. At the same time we should be able to pay compensations for the employees, their EPF, ETF arrears and gratuity when we are leasing out these institutions.

Therefore, there may be delays in the process of restructuring these institutions. That is not a failure on our part because we are trying to get the most suitable investors for these institutions.

Q: In some of these institutions which have been closed for years a large amount of resources belonging to these institutions are decaying for years. For instance at Kantale Sugar factory which has been closed for years there are lot of resources being decayed. Is there any plan from the Government to protect the assets and make use of them effectively until those institutions are restructured?

A: Our Ministry has taken every possible step to protect those resources after deploying security personnel. There are some machineries and equipment which have been destroyed due to closure of these factories for a long period. In the Kantale sugar factory the employees and security personnel are protecting its machineries and assets. Therefore, misplacement of these machineries has become less frequent. In some institutions some machinery have been misplaced and taken away by some personnel.

Therefore when we restart these factories the investors will have to bring new machineries to replace them. When we talk about Embilipitiya paper mill, once it started by the foreign investor it will be a boon for Embilipitiya area as it will give a value even for banana trees which are being felled in thousands when harvesting plantains and also hay stocks being collected there in Embilipitiya.

Q: What is the present situation in the government estates which are being managed by National Estate Development Board?

A: If we consider the estates' all the estates running at a loss are classified under our Ministry. Around 103 estates which came under the government have been given to private sector on lease basis. But those leasing agreements are not strong enough to properly manage them. Though there are 103 such estates we have to do supervision of many of these institutions.

The Government has to face many embarrassing situations as some of these estates which have been given on lease are not operating under them. They have leased out them to another parties.

We had to sometime trace them. For this we are now evolving some mechanisms. At the same time there are some estates which come under our purview which are running at losses. For them also we have to find new mechanisms. Some estates are not in a position to pay EPF and ETF for the employees. I am of the opinion that we should have a proper mechanism to strengthen the management of these estates to make them profit making estates.

Therefore, we have forwarded some of the estates running at losses for government valuation. After the valuation of these assets we will have to take a decision with regard to those factories also. Sometime we will have to give them on lease for private investors. If we are taking such decision we will do that in a proper and transparent manner under my leadership.

We will not allow those estates to be missing as it happened under previous Governments. President is always consulting us to follow transparent and proper procedures when leasing out these estates.

Q:When leasing out some of these estates the assets belonging to these estates have been exploited by the people who taking them on lease. Do you have any mechanism to avoid such instances in the future?

A: If we give those estates on lease we will take steps to retain our officials there in those estates.

We will sign agreements with them to take the workers and officials of these estates when leasing out them to the private sector.

We take stocks of the important trees, metal quarries, and bungalows when leasing them out to the private sector.

We will value all the assets and take precautionary measure not to allow them to misuse those assets. One estate in Hantana we visited very recently has been leased out at Rs.2000. It has a good bungalow also.

Such things have happened in the past. I am reluctant to talk about the past and conduct post mortems. If someone has made a mistake somewhere in the history we will have to take steps to rectify them and ensure such mistakes would not happen again in the future.

We are making this effort to restructure these government owned enterprises with the determination that we should complete this process without making any harm to the government assets.

Myself, My Deputy Minister and Ministry Secretary are doing our best to achieve that.

Q: One of the major reasons for turning these government institutions into loss making institutes is political interferences and also the barriers for them to compete with the private sector institutions.

What kind of programme do you have to tackle these situations in the institutions under your Ministry?

A: Actually we need such programs for these institutions. We should introduce modern technology into these institutions on par with the modern day requirements and enabling them to carry out their work efficiently.

At the same time we need to have drastic changes in the attitudes of the employees of these institutions. This should take place in the entire country. We observe that when people join the state sector institutions they used to work in a lethargic manner.

When they join the private sector they are willing to work even for more than 12 hours.

Therefore, we need to have an attitude change in the state sector employees whilst taking steps to remove all the barriers that would hinder their efforts to make these institutions more efficient ones.

Q: The excessive number of workers in these institutions is also another vital factor for the downfall of some government enterprises?

A: I agree that this is also another factor for the downfall of these institutions. But as a government, we cannot remove all these employees at once.

That is why we are taking steps to maintain these workers by introducing new programs. In the tiles and brick manufacturing factories we have more than 760 employees. At Embilipitiya paper mill there are 203 workers.

At Kantale sugar factory there are around 80 workers. We have to pay the salaries of these workers obtaining funds from the Treasury. In Salusala also there are around 280 workers. Out of them around 80 people are actually engaged in their work and others are raising their salaries whilst at home.

This is the actual situation of these government institutions. Therefore, we should take firm decision with regard to them.

It is with that objective in our mind we are working towards restructuring these institutions. Even the Opposition Members are telling us to at least to lease these institutions and reduce the burden on the Government. Therefore, the most suitable thing is to lease out the institutions which cannot be maintained by the government and to maintain the institutions which are affordable and essential for the government. Our aim is to work along with the private sector.

We have to keep 51 per cent of the shares with the Government and to give 49 per cent to the private sector.

This is also not sufficient since we have to pay EPF and ETF arrears of the workers, their gratuity payments, and even pay compensations for the employees. We have to shoulder heavy burden on our part.

Therefore we can 51:49 ratio when the institute becomes a profit making body.

This is not a situation that has arisen after 1994 or after year 2000.

This has resulted due to mistakes done by various regimes. So, we have to work not to repeat those mistakes again by taking proper decisions and making them which are not burden to the country and its economy and generate more jobs.

Q: Under this program will there be any change in the policy stipulated by the Mahinda Chinthana program and its extended version with regard to privatization of Government institutions?

A: We are not selling any of these government properties to the private sector. What we are going to do is to keep the properties under the government control and hand over the management of these institutions to the private sector and raise tax money to the government without making them burden to the national economy.

I assure that any of the government institution under any Ministry will not be sold to the private sector under the leadership of President Mahinda Rajapaksa.

Q: On October 8, elections will be held for vital Local Government bodies including the Colombo Municipal Council. The Opposition is saying that they will win the Colombo Municipal Council. The President is also saying that they will convince the UNP voters towards the UPFA. What is your opinion on this situation?

A: I am also of the opinion that Government can take the people of Colombo towards the UPFA side because the country is now undergoing a fast development process under President Mahinda Rajapaksa. If we think of the past there was a slow development process in the country. If we take Colombo city there is a massive development process taking place. The Government is expecting to provide houses even for those squatters. It has already begun.

The Government is continuing with a programme to uplift the living standard of the people living in those shanties. The UNP is continuing with a false propaganda to mislead the people. The Government has evicted some of the squatters but they have been given alternative places. They will be given permanent residences when implementing the housing scheme for the Colombo citizen. As the Government we have to remove all these squatters and develop the city. It has to be started from somewhere. Unauthorised structures are unauthorised whether it is built in my land or your land.

We have to remove them and make the city clean and beautiful. The Government will definitely provide them a house instead of their temporary structures and win the election despite false propaganda by the UNP.

Q: How will the existing peaceful situation and the removal of the emergency regulation contribute for the development of enterprises in Sri Lanka ?

A: The end of the war and removal of emergency will make a big impact on the country's development process. With the end of the war the country returned to normal activities. Roads were cleared and the barriers were removed.

The country is undergoing a fast development process. There was a scarcity of cement in the country recently because there was huge demand for cement due to the large number of construction work carrying out in the country.

Roads are being carpeted. There was a concept that terrorism cannot be defeated. But terrorism was defeated by Sri Lanka under the President Mahinda Rajapaksa regime. So the investors have confidence on our country. Now we have a normal situation in the country.

We are facing all these false allegation levelled against us in an effective manner. So we have a very good future for the development of the country. We will be able to find even oil resources in this country very soon.

Once we get that asset also the speed of development will be accelerated. But at the same time we should be mindful about the international conspiracies to thwart our effort s develop our country.

We have to face them as a one nation. I am confident that we can face all these challenges and develop this country as investors have lot of confident on the performances of our country. They think that Sri Lanka is the best country for their investments. So President Mahinda Rajapaksa will be able to achieve that challenge also by any means to develop this country.