හම්බන්තොට වරාය චීනයට පැවරීමේදී වරාය අධිකාරිය නොසලකා හැරලා News Item …….Opinion not to be ignored
Posted on January 14th, 2017

Dr Sarath Obeysekera  Shipyard Operator

SLPA has been ignored when Hambantota was entrusted (to Chinese)………….

No wonder………. Sri Lanka Ports Authority have always been of Non Progressive thinking .In the past Serendib Flower Mill, Mahaweli Cement Bagging Factory, and later Tokyo  Cement , Prima Flower Storage SGT container Terminal, CICT ,Colombo Dockyard are all private investments in the Colombo Harbour. SLPA never wanted to allocate because they were not interested to develop the Harbour.When SAGT was promoted officials as well as unions were dead against .Work force is one of the most inefficient and most of the are involved in various corruptive practice, hence they do not like anyone else coming in .

Land in the Port were allocated to private investors were done by the Government intervention .Ministers in charge of Ports always had the problem with SLPA to agree to lease lands to these private investments. SLPA hierarchy and the Bureaucratic Officials have most of the time have  been of Non Progressive thinking .Managing Director of SLPA is the Chief Executive Officer according their act.  Lately Chairmen of SLPA have been dictating terms to officials. If the Chairman is appointed by the President, he tends to take rein   into his hands and Managing Directors loses control.

Minister of Ports is the most sought after Ministries among supporting politicians to any President .Because it is one of the most lucrative Ministries which governs PORTS.MAHAPOLA .SECRETARIAT OF MERCHANT SHIPPING ETC. They even hold some clout on Ocean outside harbour and even GalleFace.

Another example is Galle Harbour which   was  to be developed for various reasons .Government is  quite willing to develop the  harbour to attract Yachts and Leisure Crafts .Government proposed to have a Yacht Repair Yard to attract more and more yachts and gradually develop the harbour for tourism .They prepared a Master Plan which is quite clear about this .Japanese funds were sourced to build an out harbour breakwater to expand water basin .Then Politicians interfere and change the plans ,They do not want Jaica of Japan  to provide funds ,They prefer Indians to come and put up a Marina .Officials claim that plan to remove Navy and Fishery Harbour etc from the harbour is short sighted .If the break water is built It will boost Galle development

This is the exact situation with Hambantota, SLPA wants to keep all the harbours under their control because they want to be almighty. If government wants to develop the country, National Economic Policy should be established and all key Ministries should come under a forward thinking authoritarian President or a Prime Minister.

I am not sure whether 1500 acres should be given to Chinese, but giving Hambantota Port to be managed   by a private company is a worthwhile move if the deal is straight forward.

Government should appoint a private sector Ex CEO to be the government representative to the Board who should have vetoing powers for certain selected decisions taken by Chinese .Chinese should not use the port for Military purposes .Port rates to be charged from shipping companies in Hambantota to be in in par with Colombo and Galle to avoid undercutting.

Other condition government should impose is as follows .In the event Chinese Company intends to sub-let part of the harbour ,Government should approve the same with conditions that shares should be allocated to the State without diluting the shares in Hambantota  Harbour .

Third condition should be that any development in outer harbour Ocean of Hambantota should not be included in the main agreement except the harbour channel .In the event ant other Chinese company like Cosco or any other investor comes in to develop a Shipyard outside harbour ,state should have a different agreement .

Any future Bunkering Operation to be handed over to another subcontractor should also be reviewed and agreed so that state can attract more revenue.

Dr Sarath Obeysekera

Shipyard Operator

4 Responses to “හම්බන්තොට වරාය චීනයට පැවරීමේදී වරාය අධිකාරිය නොසලකා හැරලා News Item …….Opinion not to be ignored”

  1. S.Gonsal Says:

    Mahinda Loyalist Lokuwithana to be Given 100 Acres on 99 Year Lease at Annual Rent of Rs 100 Per Acre to Build Tyre Factory in Horana

    By Namini Wijedasa

    The Government, through the Ministry of Development Strategies, is drawing up a sweetheart deal for controversial Sri Lankan businessman Nandana Lokuwithana to build a tyre factory in Horana.

    Among other things, it will grant him a 99-year lease on 100 acres of land for an annual rent of just 100 rupees an acre.

    For his promised investment of US$75 million (Rs. 11.2 billion), Mr. Lokuwithana’s company is expected to receive an income tax holiday of 12 years after which a preferential rate of 15 percent will be levied, authoritative sources said. The Cabinet Committee on Economic Management (CCEM) has also sanctioned a massive discount on the lease premium owed to the Wagawatte property and is now pushing through other concessions.

    While the foundation stone for the Rigid Tyre Corporation (Pvt) Ltd. plant was laid on January 5, the final agreements are yet to be signed, these Cabinet sources said. Since October last year, the Development Strategies Ministry has been mooting a series of generous incentives for Mr. Lokuwithana, including a provision to lease out the sprawling property in Wagawatte at rates calculated by the Government’s Valuation Department.

    As such, he will only deposit around Rs 71 million upfront as a lease premium (a one-time payment) on the land and a nominal rent of Rs 10,000 per year or Rs 100 an acre annually. The property is part of the Board of Investment’s (BOI) Wagawatte Industrial Zone (WIZ). The Development Strategies Ministry has secured CCEM permission to have it leased out to Rigid Tyre Corporation for 99 years despite the BOi’s board permitting only 50-year leases.

    The BOI charges a premium of US$ 40,000 (Rs, 6 million) anacre for a 50-year lease of WIZ land, papers presented to the Cabinet reveal. Mr. Lokuwithana should, therefore, make a down payment of US$ 4 million or Rs. 600 million for his allotted 100 acres. But he will effectively receive a discount of more than 70 percent on the minimum lease premium when calculated on the basis of a 50-year lease. The loss to the BOI is greater if tabulated on the premise of a 99-year lease.

    The papers also state that the annual ground rent for an acre of WIZ land is US$ 3,850 (around Rs. 578,000) an acre. At Rs. 100, the CCEM has approved a discount of 99.98 percent on each acre for Mr. Lokuwithana. Both incentives were granted at the request of the investor, the Cabinet sources said.
    The BOI typically advertises available lands. When this was recently done for the Seethawaka Industrial Zone — where the lease premium is gazetted at US$ 60,000 an acre and the annual rent is US$ 4,325 an acre — the agency attracted an offer of US$110,000 as premium and US$ 5,200 as annual rent for an acre. That has now been accepted.

    And while the BOI’s powers to grant tax concessions were suspended in April 2016, the Development Strategies Ministry has arranged for waivers on the grounds that the application to manufacture tyres was lodged the previous month, in March. The company will also import project-related capital and construction items free of Customs duty during the four-year implementation period.

    Rigid Tyre Corporation proposes to set up an integrated tyre manufacturing facility in Horana and create 3,000 jobs, a statement from the company said. Cabinet sources said the company would export 60 percent of its products and release 40 percent locally. They also pointed out that the BOI usually allowed 10 percent into the domestic market, going up to 20 percent under exceptional circumstances.

    The company will use technology from Marangoni of Italy under a partnership agreement signed in September. The 100-acre land will be a “megacity for the tyre industry” with divisions for value addition of rubber, promotional literature states. There will be no joint venture company and the full financial contribution will be from Mr. Lokuwithana, who bought the Ceylon Steel Corporation and is reported to have business interests in Dubai.

    It is understood that the BOI’s board of directors had been against granting so many exceptions to a single investor, particularly as it would set a precedent. They were also concerned about giving up 100 of the 150 acres the BOI has in the area to Mr. Lokuwithana, leaving a mere 50 acres to promote among other investors. These objections were ignored.

    Mr. Lokuwithana also wants to use part of his 100-acre plot to build houses for employees. This, too, contravenes the prevailing policies of the BOI as no investor is permitted to accommodate staff on land granted by the investment promotion agency. However, moves are now afoot to delist the relevant section of the property — thus placing it outside BOI purview — to facilitate Mr. Lokuwithana’s request. Further incentives are under consideration.

    One reason for the delay in signing the final agreement is because 50 out of the 100 acres are still leased out to another company that has requested an alternative property due to issues it is facing on the land.

    Mr. Lokuwithana — who owns several businesses in the Middle East — is identified as a holder of offshore accounts in the “Panama Papers” released by the International Consortium of Investigative Journalists. He has often publicly expressed pride at having risen to the heights of affluence from “a modest background from the hinterlands of Medawachchiya”.

    He was widely identified as being a Rajapaksa loyalist and conduit, a claim he has not denied. Last year, President Maithripala Sirisena unveiled a life size statue of Goddess Pattini at the Nawagamuwa Purana Sri Maha Paththini Devalaya which was renovated with funding from Mr. Lokuwithana.

    Courtesy:Sunday Times

  2. Susantha Wijesinghe Says:

    Small correction DR.!!! 15,000 acres.

  3. S.Gonsal Says:

    IF “හම්බන්තොට වරාය චීනයට පැවරීමේදී වරාය අධිකාරිය නොසලකා හැරලා” IT IS GOOD.

    Because වරාය අධිකාරිය is under a PIG.
    100 Day stolen Governement had proper people to run it. The PIG sacked them and put wild pigs as CEO and down.

  4. Dilrook Says:

    I have to agree with the sentiments of Gonsal above with historical facts.

    SLPA has been very heavily politicised for a very long time. SLPA’s authority has been curtailed in Colombo South port too which is run by a Chinese company. Chinese operators don’t allow politicised trade unions or SLPA have their terms there. A very successful port operation which achieved the 2 million TEUs mark faster any regional port.

    Before Arjuna, ports and shipping was under Ashroff and Hakeem (among others). They too caused irreversible damage. The latter even struck down the Hambantota port project feasibility report in 2003!

    This is not the ideal but given our dysfunctional politics, it is the best for the country.

    Security forces still have access to these as they are our territory. We have to be contended with that.

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