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| Land
scarcity affects new ventures Dr. Perera, who is also head of the deregulation committee, said that this decision was taken due to the increasing scarcity of land, which has put a damper on potential industrialists setting up new business ventures. The delay in
allocating new land for industrial purposes was another reason.
Commenting on his role as the Chairman of the De-regulation committee, he said that they had now set about its implementation phase, but it was likely to meet with some opposition. “If de-regulation is to be a success in Sri Lanka, then the mindset of people must change to one of long term planning as opposed to short term gains.” Dr. Perera was of the view that if industry is to thrive in Sri Lanka, there lies a great need to develop the country’s infrastructure. He said that solving the transport problem was one way that Sri Lanka could improve productivity. “I cannot comprehend why people are opposed to a proper highway and a good railway system. Infrastructure development must come first, democracy can come later,” he said. Dr. Perera said that the IDB was heavily involved in finding three key requirements of industries, namely money, technology and contractual assignments. The IDB had stopped its own manufacturing programme, and instead has begun to sub-contract the orders it receives, to various industrialists. The IDB in return earns a small commission by providing the buyer with quality assurance. Speaking about
IDB support to industrialists, Dr. Perera said that the ‘Sahanaya’
loan scheme was one of its initiatives which was worked in tandem
with the Ministry of Enterprise Development, Industrial Policy and
Investment Promotion, through which five private sector banks would
be supplying industrialists with loans. Following last year’s recession, the IDB had to intervene on behalf of many industrialists who were facing imminent closure due to the non-payment of loans. The IDB had to negotiate with the banks to re schedule industrial loans, which would otherwise have resulted in land and machinery being sold through public auction. The IDB had also developed a business plan to help industrialists to obtain bank loans, Jayathilake said. “Many industrialists were unable to answer questions posed by banks on estimates and budgets. So we have designed a detailed financial report to help banks provide loans on the basis of the report, without having to question entrepreneurs.” Special emphasis has also been placed on improving entrepreneurial skills, in terms of financial risk management, marketing, and communication skills. Jayathilake said that the foundries were suffering from a severe shortage of aluminium, which form the raw materials for the industry. He said that the reason for such a situation was because the country’s aluminium production had found better value through exports. The IDB had to perform a rescue mission, by purchasing scrap metal from the Ceylon Transport Board, SLT and the CEB, in order to provide raw materials for the industry. Speaking on the IDB’s latest initiatives, Dr. Perera said that the focus had been directed towards revamping rice mills and improving the brick and tile industry. A project to make building blocks from clay and cement was also underway, which will reduce the price of building materials, he said. Profitable
synergies seen from Ishara, LOLC deal The two firms
have obvious synergies that are likely to benefit both, brokers
said. “The Orix Corporation in Japan is delighted that Ishara Traders has got involved, as it’s an organisation that can take care of the company.” He added: “There has been no resentment among the existing directors.” Ishara Nanayakkara
said: “We have no intention of disrupting the present management.
We only wish to offer every assistance in improving the company.” “The purchase of our stake in LOLC was a carefully thought out and committed investment and we see similar, potentially profitable expansion into related fields in our future plans,” said Nanayakkara. C.P. de Silva, chairman of LOLC, said that the future plans of the company included “continuously increasing and improving their business”. He said: “Ishara Traders has got synergies with LOLC”. Wickremasinghe said that Ishara Nanayakkara will be in a position to look into any existing issues with his expertise of thirty years in the motor vehicle trade, local contacts as well as strong contacts with Japan’s Orix Corporation. (RC) Vanik
defaults on debenture payments The company had informed the CSE that they were unable to pay the debenture holders the 15 percent interest, but offered to compensate them by converting their debentures and the interest due, for cumulative redeemable preference shares of Vanik. It proposed a conversion rate of one debenture to 10 cumulative redeemable preference shares of Rs. 10 each at a coupon rate of 15 percent per annum. However, the CSE has informed the company that the proposal was subject to shareholder approval. The company
had issued close to 9.4 million rupees worth of debentures, which
commanded a 15 percent interest, which were sold at Rs. 100 par
value. Carbon
trading exchange to be set up This will pave the way for foreign income generation and encourage private sector investments in climate friendly development activities, said Dr. B.M.S. Batagoda, Director of the Ministry of Environment. The aim of the CDM is to reduce carbon emissions in developing countries, which can be done at a comparatively lower cost, and sell carbon credits to developed countries who will use it to meet their commitment under the Kyoto protocol. The Kyoto protocol grants emission reduction targets to developed countries to bring down their carbon emissions at least by 5.2 percent of the 1990 level, he said. According to the draft policy, the private sector will play a key role in the implementation of carbon trading projects. Sri Lanka stands to benefit from additional opportunities to attract foreign investment through the trading of certified emission reductions, mainly in the areas of renewable energy, energy efficiency improvements, reforestation and afforestation. Sri Lanka hopes to price the carbon at $5 per tonne. “Our target is to sell around 200,000 tonnes a year, following which the prices will be adjusted according to how the market goes,” said Dr. Batagoda. “Our intention under this programme is to set up a partnership with the private sector to establish a carbon company which will be partly government owned and partly private.” The company will be managed by the private sector which will also market all the carbon within Sri Lanka to international markets. Previous attempts to set up private companies to market the carbon were rejected as “they were not prepared for this business,” Batagoda said. The private sector offered the credits at $1 per tonne. “We don’t want to fix a price but we want to get maximum benefit.” An Emissions Trading Exchange (ETX) will also be established under the Ministry of Commerce with private and public sector stakeholders and expertise. A coal power plant would generate 1,140 grammes of carbon for the production of 1KWH of energy, Dr. Batagoda said. By switching to natural gas there will be an emission of only 340g of carbon. The actual expense would be the switch from a coal to a natural gas power plant but the carbon saved could be marketed.The draft policy has established a National Expert Committee (NEC) consisting of representatives from some key ministries, universities, the private sector as well as two national experts. The NEC will evaluate CDM project proposals and make recommendations to the National CDM Authority in keeping with the policy. |
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