Board of Investment Chairman/Director General Jayampathi Bandaranayake has sent the following letter:
“I write with reference to the article titled “BOI applications not processed,” which appeared in The Business Times last week. There are however some factual errors in your article which can create misleading perceptions and this response is to alert you to them.
I am also concerned that an unfavorable impression of this institution may be created in the minds of particularly the foreign investors as a result of such articles. This can potentially be detrimental to national interests as the BOI is charged with an important and economically vital role of facilitating investments, particularly Foreign Direct Investments to the country.
You may also be aware that the total FDI received by the country over the last 5 years was $ 3,344 million averaging $ 667 million per annum. This comparatively low level of investments was obviously influenced by the unsettled conditions that prevailed in this country over this same period. The task of the BOI is now to facilitate substantially higher levels of investment commencing from this year. The country is well on its way to realize investments well in excess of $1000 million commencing from 2011.
This achievement is not due to any special efficiency improvement of the BOI but can only be explained on account of the settled investment environment of the country. The challenge for the BOI therefore is to improve its operational capabilities to facilitate flows of investments of a much higher order than had been the case. The BOI targets are aimed to facilitate FDIs amounting to 5 % of GDP in a relatively short period of 3 to 4 years where annually figures would be around 2 to 3 billion US dollars.
It is against this background that organizational changes have been introduced and which was the subject of a press release by the BOI and carried by your newspaper recently. I repeat that the changes are ongoing and are being progressed to the satisfaction of the Board of the BOI. These changes are being done in full consultation and with the consent of the vast majority of the staff of the BOI who accept that substantial process changes are vital for them to contribute effectively.
Your article is particularly unfortunate as it is misleading and an incorrect portrayal of reality. Your newspaper stated as follows:
1. “ Amidst all the restructuring chaos at the country’s premier investment promotion agency, the Board of Investment (BOI), new investment applications have not been processed for more than two months,” according to BOI staff.
This is incorrect as all applications have been approved or rejected in line with the new investment policy frame work outlined in the budget 2011 which was approved by parliament. There were 93 applications pending at the time of the change and the respective sector teams are in contact with the applicants.
1. “We cannot process any applications as the new incentives for the prospective investors are not ‘clear’ ”, an employee told the Business Times. Further the same employee has stated “there is more confusion in three departments-Promotions, Investments and Monitoring which are amalgamated in a bid to focus on the nine thrust sectors”
It is possible that comprehension by a few employees may be less than satisfactory and the wider purposes of the reorganization, is also to help their understanding and learning through the mechanism of sector teams. This will enable the weaker members of the sector teams (such as the employee who appears to be your source of information) to be helped and coached by the seniors and fellow members of the team to understand the new investment policies and practices.
2. Your article also referred to employees of the affected department being given leave for “cutting, chopping and demolishing partitioning on that floor earlier this week was seen as a health hazard by the management”.
It is inevitable that the physical relocation of offices will cause some disturbance to the routine. Where it was determined that employees were inconvenienced, they were requested to take leave over a 2-day period. This affected less than 10 employees.
3. It is also reported that it was as a result of directions from higher authorities that the BOI is reducing its office space from 9 floors to 5 floors. I wish to deny any such direction as the Board and the teams of management of the BOI are empowered and are competent to make its own decision on the use of resources. In accordance with this duty the board and the team of management of the BOI will minimize the inefficient use of its resources in every sphere of its activities as this is deemed a waste of public funds.
No decision has been taken as to the number of floors that the BOI will eventually use as it is being reviewed on an ongoing basis. The key determinant is that the incurring of an annual opportunity cost well in excess of Rs 150 million per annum to house around 300 employees is excessive and will be suitably reduced.
All institutions have to change and change substantially if we are to progress as a nation and the BOI is no exception. In the process of any reorganizational change there will undoubtedly be some areas for improvement as not every aspect of the process can be flawless. This is a reality, but not doing what is vital to be done in fear of criticism (as in this instance) does not fit within the values that I personally wish to see in place in the BOI.”