The main Opposition United National Party has demanded that the Sri Lankan government withdraw a Bill aimed at taking over under-performing companies, and has warned that the passage of the Bill will sound the death knell for foreign direct investment in the country.

The ‘Revival of Underperforming Enterprises and Underutilised Assets Bill' provides for taking over any underperforming or underutilised company, on, among other counts, if it had received tax breaks, got its land from the government (through out-right sale or on preferential terms) or if the company was prejudicial to the Sri Lankan economy. UNP says that all foreign companies operating in Sri Lanka will technically come into the purview of the Bill, notwithstanding a Constitutional guarantee on FDI.

The “urgent” Bill is expected to the presented in Parliament on November 9, and will aid the government in taking over assets of 37 companies that have been listed in two schedules. “The Bill is politically motivated and, one of the aims is to choke funding to the opposition parties. This will take away economic freedom from the people and is violates the Constitution,” alleged UNP senior leader Mangala Samaraweera. The UNP will oppose the Bill but with the ruling UPFA having two-thirds majority in the House, the Opposition is in no position to stop the passage of the Bill.

UNP parliamentarian and economist Harsha de Silva described the Bill as a way to circumvent the legal process and said there was no provision for appeal in the Bill. Hence, if there was any incorrect inclusion of a company under one of the two schedules, then there was nothing that the affected party could do. This was so because the Constitution could not be subjected to judicial review. “If we continue like this, we will lose all credibility with local and foreign investors… The mere availing oneself of Board of Investment tax benefits will bring a company under the provisions of the Bill,” he said.