New company for state plantations
BY SANDUN A. JAYASEKERA
June 23, 2012
Ministry Secretary Willy Gamage said all of the 24 state ventures that come under the purview of the ministry would either be liquidated or privatised.
"The consultative committee appointed to look into the viability of these enterprises has recommended setting up a new company to manage state ventures and plantations that has some hope of being turned around. The others will be sold to the private sector or liquidated," Dr. Gamage said.
"After the initial data collection process it became evident that all three organizations -the JEDB, SLSPC and Elkaduwa Plantations -- are in a serious financial muddle and on the verge of a complete collapse," the committee said.
It said it was vital to implement immediate recovery measures to protect these national resources and source of livelihood of more than 74,000 people who depend solely on the sustainability of the plantations' sector.
The committee recommended that the JEDB and the SLSPC be amalgamated and function under a single Chairman and a Board of Directors with the new company given the responsibility to turn around selected estates with the available resources with the ultimate goal of floating an Initial Public Offering (IPO).
The new Company will be established under the Companies Act similar to the establishment of 23 RPCs in 1992. The remaining estates requiring high investments for development will be leased out to suitable entrepreneurs through a transparent process and based on a realistic market valuation.
The ministry said this would be undertaken by the State Resources Management Corporation (SRPC) similar to the restructuring of other state enterprises.
Statutory liabilities such as EPF, ETF and Gratuity would be paid according to a preidentified and mutually agreed plan that would avoid any disturbance to day to day business operations and tea factory development and obtaining international standards would be implemented.
Dr. Gamage said the newly set up SRPC would make an initial investment of Rs.500 million for the restructuring of other public enterprises.
He said the expected income was Rs.300 million a year and a sinking fund of Rs.200 million to be arranged with the Bank of Ceylon on a bank security provided by the SRMC.
Dr. Gamage said that individual and political pressure was mounting by the day from various quarters to grab the state lands and therefore tenders would be called soon for the leasing out of some 275,000 acres.
Source: Daily Mirror - Sri Lanka