Even as the state-appointed competent authority prepared to offer the Sri Lanka Exhibition and Convention Centre (SLECC) to its former owners on new terms, the government ran into further trouble in the troubled Revival of Underperforming Enterprises andUnder-utilized Assets Act with Lanka Tractors saying its land is not owned by the state but by a public company.
The company also threatened to resort to international abitration in three months if the matter was not resolved by then. Lanka Tractors, in a letter to Treasury Secretary Dr P.B. Jayasundera, says a majority stake in the former state-owned company was sold to the private sector and the state has no stake and thus cannot re-possess land it doesn’t own.
This is the third such issue the government is facing over, what lawyers say, is a badly-crafted Act. Pelwatte has objected to the take-over on the grounds that its lease agreement doesn’t fall within the ambit of this law while Chalmers Granaries was never vested or alienated by the state.
The Lanka Tractors letter says, “a controlling interest, and management of, the public company know as Lanka Tractors Limited, the owners of the two properties referred to in the schedule, was purchased by a consortium of foreign and local investors, following the said sale which the Hon. Dr. Amunugama, Minister of Enterprise Development and Investment Promotion, described in a letter to His Excellency the President as having being conducted in the ‘most transparent and competitive manner’.”
According to the letter, these properties were not owned by the government or a government agency “within a period of 20 years before prior to the date of the coming into operation of this Act since it belonged to a public company incorporated under the Companies Act on 20 September 1991.”
Last week, competent authorities appointed for 37 enterprises that were taken over met in Colombo and discussed modalities and guidelines that will be followed in accordance with the new law. The Cabinet appointed Ministerial Sub Committee and an Officials’ Committee consisting of six officials to ensure the overall monitoring of the process also attended.
At the meeting, a decision was taken to renegotiate the deal with the investors of SLECC introducing new terms and conditions and to hand back the property to them as it is a viable venture, official sources said. It has also been decided to hand over the lands in and around Colombo to the Urban Development Authority. Other properties will be offered to prospective local or foreign investors through a competitive bidding process with Request for Proposals (RFPs) which will begin next week.
The 9-acre Chalmers Granaries land will be blocked out and offered to investors to carry out the development plan devised by the UDA.
SLECC in Colombo's D R Wijewardene Mawatha is owned by Pico, a Singapore-based event management firm that has operations in 33 countries.
Its Sri Lanka unit, Intertrade Lanka (Pvt) Ltd, has a 25-year build operate transfer (BOT) contract with the Board of Investment of which 17 years has expired. The 0.839 hectares of land was leased from the UDA in 1994.
Lanka Tractors pointed out that the inclusion of their property in the schedule constitutes an infringement of the terms and conditions of the agreement between the governments of UK, Northern Ireland and Sri Lanka for the promotion and protection of investments and entitles the investors from the UK to refer the matter for she settlement of investment disputes, Washington DC USA. |
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