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By Shirajiv Sirimane

Transmec Engineering (Pvt) Ltd, which designed, developed and prototyped Sri Lanka's first indigenously manufactured motor car, has now run into problems of marketing it, with the Department of the Registrar of Motor Vehicles yet to recognise the car when issuing revenue licences.

"The Registrar of Motor Vehicles is yet to recognise this model of the car when issuing revenue licenses. It is a painstaking procedure at the RMV especially if you own a Sri Lankan manufactured Micro car !", Transmec Engineering (Pvt) Ltd's Chairman Dr. Lawrence Perera told the Daily News.

Micro cars - stifled by red tape

This is Sri Lanka's first indigenously manufactured car and the facility is not getting due recognition and support a country should give such a historic commercial venture due to bureaucratic red tape. The buyers of the Micro car are pushed from pillar to post at the RMV and finally return to the same department to obtain revenue licenses, Dr. Perera told this newspaper at the commissioning of the company's new manufacturing plant at the Polgahawela Investment Promotion Zone last Friday.

"The revenue I get is by selling the cars and if the public is reluctant to purchase Micro car due to red tape, I will have to a abandon this project and return to UK where I can earn a better living with my Engineering degree," he lamented.

Micro cars - stifled by red tape

Dr. Perera explained that the RMV is yet to receive clear directions from the Ministry of Transport with regard to the registration procedure of this Micro Car. "The problem is with a few officials of the Transport Ministry who are taking an unusually long time with the documentation, despite our company forwarding all papers on the Micro car to them over six months ago."

He said that the van the company assembles in Sri Lanka is not facing this problem.

"This is because we bring all the spare parts from Italy and simply assemble it is Sri Lanka."The Chairman added that due to this uncalled for red tape some Sri Lankans are reluctant to buy this car.

He said that the project cost him Rs. 70 million out for which 30% were bank loans.

He said that he felt that a county like Sri Lanka needs an economical car of this nature for the masses and this was why he launched this project. "I made this investment in 1999 at a time when the country was not doing well. Initially, I was worried whether the Sri Lanka public would accept a Made in Sri Lanka product, but the response I got was tremendous," he said.

He said though the Car is priced at around Rs. 400,000 there was a 20% VAT surcharge. "This is very unfair since the government reduced the duty on the import of motorbikes from 20% to 10% recently."

He said that he had made several appeals to the Government and personally to Deputy Finance Minister Bandula Gunawardana. "What we are asking is a tax holiday and a reduced tax rate when importing the engine and some key electronic spare parts from Italy."

Perera said that if the government would give this industry some concessions he could double the production capacity, which will create jobs for more than 1,200.

Perera who holds a doctorate from a Japanese University said that he gave a demonstration of the car to MPs including Prime Minister Ranil Wickremesinghe who was very pleased with the project. "At this meeting I was promised a land in Matugama by a Minister to put up a factory but the promise was only confined to words." He said that a few months ago he made a request to the Chairman of the North Western Province Economic Commission Chairman Lalith Kotelawela who allocated a land for this project in just 24 hours. "This is the kind of support I expect from the government." Perera said that with the new manufacturing plant they have increased their production to around 30 cars per month. "However this is not sufficient to meet the demand which is around 300 cars."

He said that they have received orders from Italy, Brunei, Bangladesh, Egypt, Malta and Mauritius for the cars but the company is not in a position to meet this demand. "With the tax and other overheads it is not profitable for us to export right now, " he said.

He said that the company is yet in the investment stage and they hope to break even in two years. "I am also hoping to introduce a 100% Sri Lanka made motor bike in the future."

Minister of Enterprise Development, Investment Promotion, Industrial Policy and Constitutional Affairs Prof. G. L. Peiris, who was the Chief Guest at the factory opening said that foreign investments have tripled this year and attributed this to the peace process.

He said that the Treasury now has finances to run the country for seven months and predicted a growth rate of 6% by the end of the year. "The value of the rupee too is increasing," he said.

Mohamed Fazar Rahim of Colombo 6 who purchased a Micro Car from the new factory said that he is proud to own a Sri Lankan car. He said that he paid Rs. 92, 900 as VAT for this full option car and said this is not encouraging at all for a Sri Lankan product.

The car is an aerodynamically designed, ultra-light city car with seating for five. It has a dual fuel facility and its fibre body is free of corrosion. Only the four-stroke engine and gearbox are imported from Italy.

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