Sri Lanka to tighten state controls on privatized plantations with new agency
Apr 01, 2018 07:07 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka will set up a new agency to regulate privatized plantations firms, to 'protect the interests of the state' the government said.
In the 1990s Sri Lanka privatized 23 state-run plantations companies which had been expropriated decades ago in an action seen as part of several key moves taken by post-independent rulers of the island to make the country a lagging nation in Asia.
The firms were losing money and eating up taxes of the people for salary payments at the time they were privatized, first via management contacts and then through 53 year management contracts.
There are 28 years remaining in the lease period.
The plantations companies have a 'golden share' which has blocked the freedom of the new owners to fully diversify land use and bring optimum returns. Many request to diversify activities are pending approval for years, industry sources have said.
At the moment the state oversees the firms through the plantations management monitoring unit of the plantations ministry.
Plantations Minister Naveen Dissanayake has proposed to setup a separate agency to regulate the privatized plantations through their remaining lease periods
The cabinet of ministers had approved the preparation of a draft law to regulate the firms.
The financial cost of operating yet another state agency for the people is not yet known and the regulatory burden of such an agency on the privatized firms is also not known.
State controls on land-use as well as excessive state ownership of land and insufficient freehold of the people are some of the reasons for the country's low economic growth and prosperity according to some analysts. (Colombo/Apr01/2018)