PERC to come under PM
is considering revamping the controversy-ridden Public Enterprises
Reform Commission (PERC) and is to transfer the organisation to
the Ministry of Policy Development and Implementation under Prime
Minister Ranil Wickremesinghe.
It is also
likely that Chrisantha Perera, chairman of Forbes and Walker and
former chairman of the Sri Lanka Insurance Corporation, will be
the new chairman of PERC, which is in charge of restructuring and
privatizing state-owned corporations and businesses, informed sources
The move comes
after a series of criticisms levelled against the privatization
body, which is now under the Ministry of Economic Reforms, over
the way it has handled deals with local and foreign private sector
business groups in the privatization of state enterprises.
include failure by PERC officials to adhere to proper procedure
in privatization agreements, lack of transparency in these deals,
and reluctance among senior PERC officials to provide information
to the public despite repeated requests by the media.
The mass resignation
of several senior managers from PERC recently was interpreted as
an indication that something was wrong with the organization.
said the government had noted the criticisms made against PERC and
was concerned about the charges as they could tarnish its reputation.
The UNF government
under Wickremesinghe has made repeated assurances that it would
eliminate corruption and strive to be transparent.
controversy involving PERC was the privatization of six cluster
bus companies and the handover of a 39 percent stake in them to
the British Ibis consortium.
Wickremesinghe is closely monitoring the deal and the government
has put off signing the final agreement with Ibis because certain
outstanding matters, such as the granting of a government guarantee,
have not been finalised.
deal has been criticised for the way in which government procedures
were apparently violated and for lack of transparency.
probably the last such deal PERC will handle the way it is presented
constituted," one source said.
PERC also came
in for criticism in the privatisation of Sri Lanka Insurance Corporation
with one of the unsuccessful bidders, Janashakthi, complaining that
proper procedures had not been followed since they did not get back
their financial proposal unopened despite their rejection on the
grounds that the technical proposal was flawed.
deals under the previous People's Alliance government too were criticized
at the time.
thinking on revamping PERC is still at an early stage and decisions
on how it would be restructured are expected to be made shortly,
the sources said.
parties have alleged that the authorities, which handled the Ibis
bus transaction, extended several times the deadline for Ibis to
pay up and did not cash the bid bond when the consortium failed
to do so before the deadline as they should have done according
to PERC rules relating to the deal.
directors in DC mess?
at a Bartleet group company have been questioned by the Criminal
Investigations Department (CID) in connection with a fraud at another
company they have been managing that deals with dessicated coconut.
and I.G. Samarasinghe, directors at Unitrades Ltd, gave statements
at the CID office on Wednesday after being asked to report to the
CID chief, DIG
Lionel Gunatillake confirmed statements of the two were recorded
but denied there was political pressure involved in the case. "We
have recorded their statements which we will send to the Attorney
General for a ruling."
said, however, that some ministers attempted to influence the CID
out of concern that the two would be detained and produced in courts.
The probe follows
a complaint made in around March by Malinga Wickremesinghe, a London-based
Sri Lankan businessman, who owns Island Products, a Colombo firm
involved in DC exports.
lawyer for Wickremesinghe, said his client had complained to the
CID of a major fraud worth $ 8 million in the company involving
Jayatunga and Samarasinghe, also directors at Island Products.
years ago, Wickremesinghe entrusted the management of the company
to the two men. The London-based businessman was however responsible
for obtaining all the orders for the company.
- during a trip to Sri Lanka - discovered that export remittances
for 13 shipments made by the company had been directed to the account
of Unitrades Ltd. He then complained to the CID alleging a fraud
in the company.
when contacted by The Sunday Times FT, refused to comment on the
allegations or being questioned by the CID. Jayatunga was not available
Serious questions have been raised over the entry of Mundo
Gas, the Commerce's Ministry's official backing of this project
and doubts as to whether it has began distribution as claimed after
many months of promises and excuses.
Port and industry
officials dispute claims by Mundo that they are already distributing
LPG. The accusations came amidst recent media reports that a second
consignment of 80,000 tonnes of LPG was expected at the Galle Port
they talk of a second shipment when the first shipment has not been
released to the market?" questioned an industry source. The
source added that Mundo Gas has done nothing but mislead the public
with empty promises.
Mundo Gas has
allegedly declared to the Customs that the barge berthed at the
Galle Port was empty when it was brought in originally.
being raised in various quarters by port officials over the safety
of such a barge being berthed permanently and the feasibility of
transferring LPG to the filling plant through a flexible pipeline.
An official appointed by Lloyd's Shipping is also said to have inspected
the barge and is yet to submit a report on its conformance to International
Maritime Organization (IMO) safety codes.
Many port officials
declined to speak on the record about the operations of Mundo, giving
rise to suspicions of a cover-up.
in the LPG industry, LAUGFS Lanka Gas, is closely monitoring the
situation as it has obtained an injunction preventing other operators
refilling their cylinders. The notice has been duly conveyed by
the Commercial High Court to Mundo Gas, according to W.K.H. Wegapitiya,
Chairman of LAUGFS, who has threatened action through courts if
the company goes against the said injunction.
Janaka Sugathadasa of the Department of Internal Trade, asked about
the legality of his public statement permitting consumers the multiple
use of cylinders marketed by Shell or LAUGFS, said it was "perfectly
legal" and that any party wishing to dispute this may take
the matter to court. He also questioned the ownership of cylinders
other LPG operators have laid claims to.
Shell Gas Lanka said it planned legal action against other operators
who refill their cylinders and raised concerns of safety standards.
source also said the highly-publicised launch ceremony by Mundo
Gas at the Galle Port two weeks ago was a farce. The ceremony was
meant to pacify the 60 or so dealers who have each paid a deposit
of Rs. 1 million and are pressurising Mundo, and also to please
government politicians. The cylinders used for the ceremonial handover
are said to have been empty.
the possibility of Mundo Gas operating a filling plant when the
machinery that has been imported is yet to be installed.
Mundo Gas chairman
Ariyaseela Wickramanayake was not available for comment and another
senior company official in Galle declined to comment.
buyers accused of exploitation
Demand for Ceylon
tea surged at the Colombo auction last week indicating an end to
the low prices and unsold volumes caused by the Iraq war crisis
which producers alleged had been exploited by some buyers to buy
their teas at cheap rates.
There was wide
participation by most Middle Eastern buyers as well as Russia and
other CIS countries, said Niraj de Mel, CEO of the Tea Association
of Sri Lanka.In many catalogues more then 95 percent of the teas
were sold, brokers John Keells managing director Lalith Ramanayake
senior vice president of brokers, Asia Siyaka Commodities, described
it as "an excellent sale" but said these prices were yet
lower than pre-crisis levels.Producers accused some big buyers of
exploiting the crisis by not bidding at the auction and buying teas
as out lots at much cheaper rates. "We sold because we were
strapped for cash and needed money to pay New Year advances,"
said one source.
Traders' Association chairman, Mahen Dayananda dismissed the allegations.
"To the best of my knowledge buyers did not exploit the situation
but had to put off orders due to uncertainty in the Middle East
and lack of money."
airport to close, new hub at Aluthgama
is considering closing down the Ratmalana airport to make way for
a housing project and building an entirely new domestic civil aviation
hub near Aluthgama.
Aviation Authority of Sri Lanka chairman, Hemasiri Fernando said
a feasibility study for the project, mooted by Prime Minister Ranil
Wickremesinghe, is to begin shortly.
greenfield airport has been located near Aluthgama, in the Mathugama
electorate, because of its proximity to tourist resorts on the west
coast as well as the new southern highway that is being built, he
is to have connecting flights between the proposed airport at Aluthgama
and the Katunayake International Airport," he said. "It
will cut down travel time for tourists. Also, the proposed new airport
will be five minutes from the new southern highway intersection."
highway is expected to be ready by the time the new domestic airport
is built near Aluthgama, speeding up travel time to and from Colombo.
trips from the Katunayake international airport to tourist resorts
are considered to be one of the key impediments to the development
The new domestic
civil aviation hub and the new network of highways that are planned
are expected to cut down travel time significantly.
about 4,000 hectares of land is required for the project, which
is to be funded with foreign aid.
Minister Ranil Wickremesinghe wants to close down the Ratmalana
airport where land is very valuable and convert it into a housing
project," Fernando said.
government's thinking, the air force bases at Ratmalana and Katunayake
could also be shifted to the new site near Aluthgama.
airport at Katunayake is also slated for expansion with a second
runway and new terminal building under consideration as part of
long-term modernisation plans for which the existing airbase would
have to be shifted.
said the government was planning to investigate a site at Wellawaya
for the proposed second international airport.
meet the urgent requirement for an alternative runway to the one
at Katunayake to handle international flights in case of emergency
such as bad weather. The alternative runway has to be in a different
climatic zone, preferably in the dry zone.
airlines now use south Indian airports as their alternative runway
but this means planes have to carry excess fuel, making it a more