Growing criticism from within the country and outside has made the Sri Lankan government clarify on its law to take over loss making private industries which have availed of some government concession.
The vocal United National Party has attributed motives to the hurried enactment of the Revival of Underperforming Enterprises and Underutilized Assets Act, and claimed that it was yet another move to target businessmen sympathetic to the UNP. The government has also announced that the establishments taken over would be re-privatised.
In a release, the Central Bank of Sri Lanka said that the main purpose of the Act is to revive 37 identified underperforming enterprises or underutilized assets where the land belongs to the Government or a Government Agency. It is applicable only to those 37 named enterprises, and not to any other enterprises whatsoever.
“The Act provides for the appointment of a Competent Authority which will control, administer and manage the enterprise or asset so as to ensure the revival of the named enterprise or asset, through means such as restructuring or entering into a management contract. Accordingly, the Revival of Underperforming Enterprises and Underutilized Assets Act does not, in any way, constitute the nationalization or the expropriation of private assets, but instead, is designed to ensure the productive use of assets that have hitherto been lying abandoned or have been seriously underutilized,” it said.
Arriving here after his visit to London, the Leader of the Opposition in the Sri Lankan Parliament Ranil Wickramasinghe told presspersons that many leaders of Commonwealth had expressed their apprehensions over the Act.
Citing specific examples, the Central Bank sought to dispel the notion created that any business could be taken over by the government. “There has been no expropriation or nationalization of private assets as has been suggested by some quarters, and that this new legislation will actually facilitate the recommencement of productive economic activity in hitherto abandoned or severely underutilized lands and assets. In addition, it should be noted that the process as set out in the new law, would not deprive the existing operator or company from reaching an understanding or agreement with the Competent Authority to operate the asset or enterprise in keeping with the original purpose of the Agreement. In such an event, there may not even be a change in the operator, but only a change in the mode of operation, with the existing operator being provided with the opportunity to ensure that the original intention of the agreement is fulfilled,” it said.
