Business Times

Government pledges that it will never privatize Sevanagala Sugar Co. again

By Bandula Sirimanna

The cash strapped Government has pledged that it has no intention to privatize the Sevanagala Sugar Co. regained by the state under the newly enacted Underperforming Enterprises and Underutilized Assets bill, amidst reports of an attempt to sell it to a foreign company.

Minister of Productivity Promotion Lakshman Seneviratne who is also a member of the Ministerial Sub Committee appointed by the president to monitor the progress of enterprises acquired by the state under the Underperforming Enterprises and Underutilized Assets bill, told the Business Times that there is no intention to sell Sevanagala to any foreign investors and the government is capable of maintaining the sugar production process.

Several employees of Sevangala Sugar Factory told the Business Times that the work at the factory would come to a standstill during the short season commencing from March owing to the failure to bring down spare parts for machinery for repairs and the chaos among employees due to transfers of some workers as well as the suspension of work of several other employees including the General Manager of the company. This has raised difficulties even to pay the salaries of the workers.

They said that a trade union leader is dictating terms to the newly appointed Chief Operations Officer and he is now controlling factory administration. They say that Keerthi Kotagama, the head of the CIC Agri Business Division who is in an advisory capacity to oversee the agricultural aspects of Sevanagala Sugar, is only handling the agriculture aspect of sugarcane cultivation , and this was a temporary arrangement of the government till the handing over of the factory to a prospective investor.

Residents and employees at Sevanagala Sugar factory said that representatives of a foreign investor company had arrived at Sevenagala on board a helicopter to inquire into the situation of the factory before making any commitment towards investing in the sugar industry in the area.

When asked about the helicopter visit by foreign investors, a highly perturbed Minister Seneviratne in turn asked the Business Times as to what is wrong in landing a helicopter at factory premises. He revealed that this incident is not related to any investment in Sevanagala factory and the people who arrived there were on a different mission. He categorically stated that the government will not privatize Sevanagala Sugar again.

When contacted by the Business Times, Competent Authority (CA) of Sevanagala Sugar, A. Pathinathan, District Secretary - Monaragala said that salaries of employees have already been paid using Treasury allocations. He said that the government will pay salaries of 456 employees and it is not their responsibility to pay salaries of workers attached to former owner, the Daya Group of companies.
He noted that work of the General Manager of the company and a few employees has been terminated and the government is not willing to employee persons who are above the retirement age. He said that the CEO and COO are fully in control of the factory administration and there is no trade union involvement in handling the work at the factory.

Daya Gamage, owner of Daya Group, told the Business Times that the Sevanagala factory operation is now in a mess. He said that the sugar industry will collapse soon due to bad administration. At least Rs. 80 million is needed to meet the salary bill of employees, he disclosed. Workers are not interested in work as they are now aware that the government will pay their wages. But he said that this situation cannot be continued by pumping money from the Treasury as there is no income generation from the sugar factory.

He noted that the government has also pillaged the valuable goods and equipments belonging to the industry. Even the industry’s cane growers had not been provided with the manure. This industry which was smoothly, steadily and profitably progressing has been plunged into total ruination within three months after the takeover by the government, he said.

On the other hand the land allocated to the Sevanagala project is state land and possessed by the Sri Lanka Sugar Company Ltd, therefore this land cannot be vested with the state, he said. He revealed that he is planning to enter the sugar industry in India in a big way, adding that he plans to invest US$50 million or more than Rs. 5 billion along with two other US and UK investors and launch a cane growing industry in Gorapur. The other two investors had joined Sevanagala Sugar Co. prior to making their investments. But now, all of them have decided to invest their monies in India, he said.

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