New Act will woo foreign investors - Siyambalapitiya

The Under-performing Enterprises and Under-utilised Act will not discourage foreign investors, because this is relevant only to the 37 ventures listed in the Act.

Other countries too take similar decisions to make better use of economic assets. This is a good signal for foreign investors and Sri Lanka today needs responsible foreign investors.

Today the business climate in Sri Lanka has improved and we need to attract new responsible investors. The Government will not hold these properties or run them after acquisition and they will be handed over to new investors, local, foreign or in collaboration following transparent procedures, Minister of Telecommunications and Information, Ranjith Siyambalapitiya told the Sunday Observer.

The Government will introduce in laws to acquire valuable land around 15,000He. from under-performing plantation companies, he said.

Commenting on the Revival of the Act, Siyambalapitiya said that private sector entrepreneurs should not panic over this Act and it will not be used to acquire private properties in the future. This Act is only to acquire or revive the 37 listed private companies. Although the government wants to acquire over 15,000He estate lands in the plantation sector the government cannot use this Act to acquire these lands.

Some plantation companies have abandoned these valuable arable lands and thousands of workers have lost their jobs and the government cannot ignore these valuable economic assets idling. The Government will take action regarding these lands separately, he said.

Responding to views of Opposition political parties regarding the Act, he said that all 37 properties listed in the Act as under-performing enterprises and under-utilised assets are privatised government ventures or private institutions that have obtained government assistance such as BOI facilities. They were privatised with the objective of increasing productivity, increasing salaries of workers and increasing the contribution to the national economy.

They were running at a loss under State management. However, most of the properties listed here have not achieved the expected performance and they were continuing to run at a loss been idling or have been used for other purposes. For instance the two sugar companies listed here produced 65,000 MT of sugar annually before it was privatised and it was 12 percent of the local market demand.

Today production has decreased to 30,000 MT and they only produce four percent of the country’s requirement. However, some companies are earning profits producing other products but were not providing the expected benefits to the economy at the time of privatisation.

Among the companies listed here are manufacturing facilities and valuable land in the EPZs and lands in the metropolitan areas which are idling over decades. Some companies have been closed without even paying compensation to workers.

Siyambalapitiya said that owners of these ventures too have an opportunity to come up with a proposal to relaunch the ventures.

If they come with a proposal that can make these ventures profitable with new investment or in collaboration with new investors, government will consider it. The government will pay compensation/invested money for the properties within six months.

The Government will not fragment the lands belonging to the sugar companies and distribute it to the people. Our objective is achieving the best returns from them and we hope that good investors will realise the value of these economic assets and come with good proposals, he said.

GW