to be a self-financing unit
industrial parks, hiring space to investors
The Board of
Investment (BOI), Sri Lanka's main state-owned, investment promotion
agency, is planning to launch a string of industrial parks complete
with industries, townships, housing and recreational activities
in an effort to turn the cash-strapped organisation into a self-financing
not getting (enough) money from the government Treasury. So we need
to look at ways of raising our own money to finance programmes,
BOI chairman Arjunna Mahendran told The Sunday Times FT.
The BOI is
using a model based on an old joint venture partnership between
the government and the DFCC where the agency took over a Fertiliser
Corporation complex and converted into an industrial estate.
to use that model and borrow from banks like the World Bank, etc.
using concessional money and start the industrial parks (with non-related
government funds), Mahendran said, adding that this is a major
departure from the current practice of relying on state funds to
drive the country's investment.
has invited an expert from the Jerong Town Corporation in Singapore
which has expertise in industrial estates and townships, as an advisor
to the project.
The BOI has to graduate into a financially autonomous entity.
In the past we have been just an industrial estate arm of the government.
We should graduate to be a self-sustaining, viable entity of our
own. Now that Sri Lanka's peace process has reached a positive stage
we can finance these projects instead of relying on the state,
the BOI chief added.
A public company
would be set up for this purpose and eventually listed in the Colombo
Stock Exchange to enable anyone to invest in it. The entire industrial
estate development activity would be funded by banks. The industrial
estates (or parks) will be modeled on the lines of what is available
in the Asian region like Singapore, China or Malaysia for instance.
There will be industrial infrastructure like good roads, telecommunications
and power plus townships that would have worker housing, schools,
hospitals and recreation facilities.
the mistakes we have made is that we haven't developed housing and
townships linked to industrial development in the past 10-15 years.
What we have are industrial estates. By creating towns, housing
and schools side by side with industry (like in China or Malaysia),
workers became part and parcel of the whole region, get married,
have children and have a sense of ownership in the complex. It becomes
a self-contained unit.
Prime Minister Ranil Wickremesinghe has identified the region between
Biyagama and Horana on the eastern side of the western province,
as the best location for these sites.
currently doing a feasibility study to find the best site. The BOI
will lease state land and develop these self-contained, mini cities.
It would be linked to new highways, the port and airport.
The BOI chief
said this plan forms the agency's broad vision for the next three
to five years. Our existing industrial estates are filling
up fast and we need land. This is top priority for the coming year
and we hope to start next year the first generation of industrial
seeks full ownership of agency
Ministry has rejected a bid by American President Line (APL) for
full ownership of its agency business here but the carrier is pressing
its case, citing proposed new investments and new services to be
introduced through the Colombo port.
APL has just
signed a terminal services agreement with the Sri Lanka Ports Authority
under which they will exclusively patronise Colombo's Jaya Container
Terminal for a period of two years.
Until the week
before last APL had one service at JCT and one at Queen Elizabeth
Quay operated by a consortium led by P&O Ports.
APL's bid for
full ownership of its agency had been supported by the Board of
Investment which has been pressing for the liberalisation of the
agency business and allowing full foreign ownership.
The move has
been resisted by the shipping agents, especially the Ceylon Association
of Ships' Agents, who feel it would result in a loss of foreign
exchange earned by the country.
lines can now own only up to 40 percent of the agency.
have also said full foreign ownership was not required since Sri
Lankans have the skills to provide the required services.
said they were still holding talks with the authorities on their
bid and had not given up hope.
owned and operated by Neptune Orient Lines of Singapore, is considering
new investments here and bringing in new services to Colombo port,
jitters hit Ceylon tea auction
Gulf war fears
hit the Colombo tea auction last week, dragging down prices of Low
Growns which are much in demand in the Middle East and brokers said
shipments could get affected if fighting does break out.
Commodities said the market for Low Growns was "substantially"
lower with less demand for the relatively large volume of 3.1 million
kg on offer.
the drop to tension in the Middle East where American forces are
being poured in for an attack on Iraq.
of being caught with large stocks in transit is hampering the movement
of tea," said Anil Cooke, senior vice president of Asia Siyaka.
"We could be hit severely." Shipments to Russia, the biggest
market for Ceylon tea, could also get affected if war breaks out
in the Gulf since they move via the Red Sea or across the borders
of other Middle East countries, he said.
November we exported 64 million kg to Russia, pushing India out
as the prime supplier, Cooke said.
a major breakthrough.
said shipments might not be disrupted that badly given the experience
of the 1991 Gulf war.
Keels said the trade would be closely watching developments in the
But they added:
The resilience demonstrated in the transfer of teas to consumers
from auction centres around the world in similar circumstances previously
should only encourage exporters.
Cooke of Asia
Siyaka said that even if shipments were not disrupted the costs
would rise, with war risk hull and freight insurance premiums, and
bunker surcharges being imposed.
would come out of the price of tea, he added.
crisis swept under the carpet
A former market
regulator last week warned that the crisis at the Securities and
Exchange Commission (SEC) will be swept under the carpet and nobody
held accountable. This issue (mark my words) will be swept
under the carpet. It will be delayed as long as possible till the
heat is off. Nobody will be held accountable for this situation,
noted Arittha Wikramanayake, a one-time SEC director general and
now a top corporate lawyer.
He said the
SEC would never be able to regulate the capital markets. The
entire credibility of the SEC is gone. They wont be able to
(effectively) prosecute anymore, he told a Colombo seminar
on insider dealing organised by Corporate Consultants Ltd.
called for an early resolution of this crisis and urged that the
public be quickly informed of the Attorney General's verdict, which
Finance Minister K.N. Choksy has said would end the matter. If
the Attorney General rules in favour of the SEC investigation, then
Michael Mack must go.
If the AG rules
in favour of the report submitted by a panel appointed by the commissioners,
then Dayanath Jayasuriya must go.
came amidst growing concern about delays on a decision in the SEC
insider trading fiasco against Mack, the SEC chairman now on leave
of absence, and two other former directors of Aitken Spence.
Silva, a lawyer and partner of Nithya Partners, said it was unfortunate
a business community that preached corporate governance was not
ask the question
why should directors resign when politicians
have been up to all kinds of corruption and not resigned? But in
this case it is the preacher (business community) that is not practising
what they preach.