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| Wednesday, 11 June 2003 |
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BOI reverses decision on vehicle manufacturing project By Channa Kasturisinghe The Board of Investment of Sri Lanka (BOI) has reversed its decision not to permit the clearance of capital goods imported on duty free basis by Vehicle Lanka (Pvt) Ltd, for its controversial project of manufacturing motor vehicles using second hand body parts. The BOI has taken this decision following a fundamental rights petition filed in the Supreme Court by Harsha P. de Silva, Chairman of Vehicle Lanka Ltd. on June 2, 2003. An agreement had been signed between the two parties last year for Vehicle Lanka Ltd to set up and operate a business to assemble vehicles by using second hand body parts for the local market. The approval for the project had been given with the concurrence of the Secretary, Ministry of Transport and the Controller of Imports and Exports. However, following opposition from importers of reconditioned and brand new vehicles the BOI had informed the company that it had taken a decision not to permit the imports on duty free basis effected by BOI approved enterprises engaged in the manufacturing of recondition vehicles. De Silva has pointed out that the BOI's decision was a violation of the agreement between the two parties and it would cause irreparable loss and damage to his company. He told the Daily News that the Company has already invested Rs.40 million for this project of which the initial investment within the first three years would be Rs.500 million. "We will implement this project in collaboration with a Japanese investor. Once fully implemented the project will bring considerable economic benefits to the country. While providing an opportunity for locals to buy motor vehicles at 40 percent less than the market price the project will provide 400 direct employment opportunities and more indirect employment opportunities. The assembling of vehicles locally will be a first step in the process of a local motor vehicle manufacturing industry," de Silva said. A senior BOI official told the Daily News that the Executive Director (Investor Services) of the BOI has already informed Vehicle Lanka Ltd. requesting the company to submit import documents to the Investor Services Department for necessary approval. However, the Ceylon Motor Traders' Association has strongly opposed the implementation of the project claiming that the project would have serious repercussions on the safety of passengers and the environment. De Silva said his vehicles would conform to stringent quality control and environment standards based on international specifications. "Currently approximately 42,000 vehicles are being imported into the country per annum. Our project will only result in the introduction of approximately 1000 vehicles per annum into the local market," de Silva said. |
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