{"id":67717,"date":"2017-07-10T17:48:01","date_gmt":"2017-07-11T00:48:01","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=67717"},"modified":"2017-07-10T17:48:01","modified_gmt":"2017-07-11T00:48:01","slug":"yahapalana-and-the-economy-part-4","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2017\/07\/10\/yahapalana-and-the-economy-part-4\/","title":{"rendered":"YAHAPALANA AND THE ECONOMY Part 4"},"content":{"rendered":"

KAMALIKA\u00a0 PIERIS<\/em><\/span><\/h2>\n

Yahapalana government does not seem interested in developing the stock market. The stock market is\u00a0 in decline. The Securities\u00a0 and\u00a0 Exchange Commission (CSE) All Share Price Index (ASPI) which significantly outperformed major global indices such as the MSCI World, Dow Jones, FTSE100 and DAX during 2010-2013, dismissed however, as mostly pump and dump thanks to the stock market mafia,\u00a0 has seen a 10 per cent drop from 2015 to 2016.<\/p>\n

Stock brokers are directed to maintain a minimum\u00a0 shareholder\u2019s fund requirement of Rs. 100 million or 50 per cent of the firm\u2019s stated capital, whichever is higher. This will affect profits. The \u2018big\u2019 guys will welcome this, said critics..\u00a0\u00a0 Cash-flows are strapped by\u00a0\u00a0 the SEC\u2019s new rules in capital adequacy. Withholding Taxes (WHT) has been raised to 14 per cent from 10 per cent for debentures. Who will now in invest in debentures?\u201d stock brokers asked. The country\u2019s stock market is done for, they warn.<\/p>\n

Some stockbrokers are closing their outstation branches . About 12 branches were closed by March 2017.some companies are mulling pay cuts as well.. However, CSE officials said that since April 2017, the CSE has showed buoyancy. Some branches are on CSE premises which are subsidized by the CSE. Branches at Matara, Kandy, Kurunegala, Negombo and Jaffna are highly subsidized. They pay a minimal rent only and no utilities,\u201d a CSE official said, adding that now with retailers rejoining the CSE things may change for the better. Some Yahapalana\u00a0 manufacturing ventures have been a flat failure. Volkswagen\u2019s local agent Senok Automobiles headed by Noel Selvanayagam , announced\u00a0 in Sept 2015,\u00a0 that they\u00a0 had entered into an agreement with BOI for a multimillion dollar investment by Volkswagen, for which they were\u00a0\u00a0 given\u00a0 land in Kuliyapitiya. Selvanayagam\u00a0 obtained the necessary clearances from the various government authorities and\u00a0\u00a0 Senok started\u00a0 preparing the land for the plant.<\/p>\n

Yahapalana was jubilant. The Volkswagen plant would be a major leapfrog for the country in the right direction, said Yahapalana .\u00a0 It\u00a0 showed Lanka\u2019s growing attractiveness as a destination. \u00a0Volkswagen is currently the world leader in automobile manufacture, having overtaken Toyota of Japan. Volkswagen had\u00a0 attempted to set up a plant in Sri Lanka since 2008 but failed due to \u2018various\u2019 reasons.\u00a0 Yahapalana government\u00a0 had expressed\u00a0 an interest and spoken to the German Ambassador.<\/p>\n

Then it was announced that Volkswagen \u00a0is not coming to Kuliyapitiya. The excuse trotted out by Yahapalana government\u00a0 was that Volkswagen \u00a0soon after faced\u00a0 an issue regarding some of their diesel models in the US. This had cost\u00a0 Volkswagen US$ 18 billion in losses. But this was challenged. A spokesman for Volkswagen stated on TV there were never any plans for a Volkswagen\u00a0 investment in Sri Lanka. In Germany Volkswagen said they had no plans for Sri Lanka. Volkswagen \u00a0itself has never said it was coming The German Ambassador said that everywhere he goes he is asked about the Volkawagen factory. He said that neither the Volkswagen Company or the German embassy had anything to do with whatever was started in Kuliyapitiya.<\/p>\n

Experts said that it has been obvious that Volkswagen \u00a0would not be coming here since it was already based in India. Why should Volkswagen invest in Sri Lanka when they have a plant in India,\u00a0 which is capable of producing 200,000 vehicles per annum. Further,\u00a0 Volkswagen has now changed to the manufacture of European cars.<\/p>\n

The project was immediately dubbed Hoaxwagen\u201d. Under the excuse of Volkswagen, it was said,\u00a0 Yahapalana had handed over valuable\u00a0 land to Noel Selvanayagam, president of Senok automobiles. He had also, it was alleged, secured a range of\u00a0\u00a0 concessions from the government. The plant was renamed Western Automobile\u201d .\u00a0\u00a0 Senok Automobiles\u00a0 then signed \u00a0an amended agreement with BOI, in Jan 2017 in which the Kuliyapitiya land was given on a freehold basis to the newly created \u2018 Western Automobile Assembly\u2019 for a proposed vehicle assembly plant.\u00a0There was no reference to Volkswagen.<\/p>\n

At no point at the foundation laying ceremony had there been any mention of the plant being for Volkswagen . At the ground breaking ceremony neither the\u00a0 German ambassador nor a representative from Volkswagen\u00a0 was present. Media noted that the logo created\u00a0 by Western Automobile resembled the logo for Volkswagen . Western Automobile will eventually turn out 10,000 to 15,000 diesel cars of 1000 cc to 2000 per year. Initially, with a modest capacity to turn out 500 units, it will only serve the domestic market for the first three years said supporters.<\/p>\n

It was \u00a0reported that Italian tire giant Maragoni of Italy would invest in the rigid tyre project\u00a0 at Wagawatta, Horana , described as Sri Lanka largest integrated tire project\u2019. The Wagawatta Horana tire factory would export mostly to Europe and would provide 3000 jobs.\u00a0 The massive 100 acres\u00a0 for Wagawatta was\u00a0 approved\u00a0 by cabinet on a proposal by Malik Samarawickrema, Minister for\u00a0 Development strategies and International trade .BOI was giving it a ten year tax holiday. But Maragoni promptly distanced itself from\u00a0 the project.\u00a0\u00a0\u00a0 There was no such linkup and no such contract has been signed with BOI,\u00a0 Maragoni said. The \u00a0tyre plant was \u00a0suspended.<\/p>\n

Plans are underway, said the media,\u00a0 to build a sugar factory at a 149 hectare land in Dehigama and Akiriyan Kumbura divisions in close proximity to the Nilgala reserve in Moneragala. The Rajapaksa government\u00a0 had in 2007 planned to hand over of 62,500 acres in the area to a British company, apparently Booker Tate. But the local promoters of the project had\u00a0 denied claims that land was being given to a British company. They said the company was providing technical know-how and other support. The same name of Booker Tate British consultancy firm has transpired once again after more than nine years in the latest move to resurrect the project by the present government, said the media. The local agent of this project is I.M.S. Holdings, the same company that was involved in the project\u00a0 earlier. A Thailand company affiliated to Booker Tate has stepped in this time as foreign collaborator to invest over US$110 million to establish the sugar factory in Moneragala, sources \u00a0said. \u00a0 –\u00a0<\/strong><\/p>\n

In July 2015\u00a0 the BOI signed an agreement with MG Sugars Lanka to revive the\u00a0 Kantalai sugar Factory. The company, a partnership between Bangalore-based Shri Prabulingeshwar Sugars Chemicals Ltd and Singapore\u2019s SLI Development Pte Ltd, had agreed to invest US$100 million. The company had\u00a0 conducted a $2 million feasibility study on the project through a German Company Bosh. It planned to process 500,000 metric tons of sugarcane within 18 months after re-launching the factory providing benefits for 25,000 farmer families in the area. The total number of direct employment generation would be around 1,220. Yahapalana has released 65,000 acres in Rideemaliyadda for the factory. The land was handed over to the Board of Investment (BOI) to proceed with the project,<\/p>\n

JVP Leader and Chief Opposition Whip Anura Kumara Dissanayake vehemently opposed in Parliament, the proposal to grant 65,000 acres in Rideemaliyadda to a foreign company to start a sugar factory. Moving an Adjournment Motion in the House, the MP urged the government not to proceed with the proposed Uva-Wellassa Sugar Industry project, highlighting its detrimental impact on the environment, archaeological heritage and the lives of the people of the area.<\/p>\n

This project was abruptly halted by the previous Rajapaksa regime in 2007 following vigorous protests of residents and environmentalists, he said. The project is now restarted, with plans to cultivate sugarcane in around 62,500 acres of fertile land in Maduru oya reserve area instead of lands from Nilgala, Gal oya and Maduru oya reserves which were proposed in the 2007 project. The proposed strip of land is located in between Nilgala and Maduru oya reserves. About seven archaeological sites are located in that area. The proposed project damages the entire eco-system and aggravates the human-elephant conflict. We demand a comprehensive Environmental Impact Assessment (EIA) covering the whole area of this project,\u201d he said. .<\/p>\n

Dissanayake \u00a0said the project was aimed at producing 80,000 metric tonnes of sugar, adding that it requires 2.8 million litres of water on the first day of its operation. How are you going to get this water? Is it from Maduru Oya? This is a very large factory. Even if we join Hingurana, Kantalai, Sevanagala and Pelawatte sugar factories together, the extent of land would be less than 40,000 acres, but this factory has an extent of 65,000 acres,\u201d he said. Dissanayake said the Government was going to distribute 5 acres each for 7,500 farmers with the condition of cultivating only sugar cane, adding that this would in turn make them laborers of the factory. He called on the Government to stop this project and follow an environmental friendly development approach when utilizing those lands.<\/p>\n

John Murphy, \u00a0President of the Coca Cola Company Asia Pacific Group \u00a0<\/em> and Irial Finan,\u00a0\u00a0 Executive Vice President, met\u00a0 Finance Minister\u00a0Ravi Karunanayake. They said\u00a0 that\u00a0Sri Lanka could be developed as a production hub to re-export Coca Cola products to India.\u00a0India has the highest demand for Coca Cola products in the South Asian region. Sri Lanka could benefit from the arrangement by earning huge amounts of foreign exchange, even while generating jobs \u00a0for the youth. The Coca cola officials had discussed with Ravi \u00a0Karunanayake about the use of Sri Lanka natural water resources and tea related products to manufacture Coca Cola\u00a0 and re-export the\u00a0 products.<\/p>\n

EPDP leader Parliamentarian Douglas Devananda \u00a0pointed out that this Coca Cola factory would further reduce the island’s already diminishing natural water sources .Coca Cola Company was attempting to set up its largest manufacturing plant in the South Asian region in Sri Lanka to supply to its largest market in the region which is India. Devananda said that currently the Coca Cola was facing serious criticism in India. He added that there were around 57 Coca Cola plants in India and they were charged with violation of the water usage limits. That is why\u00a0 the Coca Cola Company was planning to set up its manufacturing plant in Sri Lanka and use our water sources. \u00a0<\/em>( Concluded)<\/p>\n","protected":false},"excerpt":{"rendered":"

KAMALIKA\u00a0 PIERIS Yahapalana government does not seem interested in developing the stock market. The stock market is\u00a0 in decline. The Securities\u00a0 and\u00a0 Exchange Commission (CSE) All Share Price Index (ASPI) which significantly outperformed major global indices such as the MSCI World, Dow Jones, FTSE100 and DAX during 2010-2013, dismissed however, as mostly pump and dump […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[104],"tags":[],"class_list":["post-67717","post","type-post","status-publish","format-standard","hentry","category-kamalika-pieris"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/67717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=67717"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/67717\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=67717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=67717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=67717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}