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Defunct industries to rise under private sector partnerships

TIE-UPS: There are 120 Government industries which are defunct and action is being taken to re-open them as government and private sector partnership companies, Minister of Enterprise Development and Investment Promotion, Dr. Sarath Amunugama said.

Speaking to the Daily News after opening a regional BoI administrative office in Mawathagama Free Trade Zone the Minister said there are many State factories and institutions that have been shut down due to various reasons.

“This is a crime as the Treasury keeps paying salaries for them. In addition millions of Rupees worth of machinery is decaying in these institutions,” the Minister said.

He said President Mahinda Rajapaksa too is keen to re-start these enterprises, which are mostly under the Public Enterprise Reform Commission. (PERC). The Minister said that in some cases chairmen who are in charge of these institutions are not keen to re-start them as they think that they would lose their perks.

“We can’t help and we are not there to please them,” he said. He said that as an initial step Hingurana Sugar Company, which was shut down for over a decade, was re-opened as a government-private enterprise with LOLC and Browns Group investing. Another enterprise that started work again was the Thulhiriya textile factory under the MAS holding group.

The Government would keep 51 percent in each enterprise and give out the remaining shares to the private sector. “Therefore this is not privatisation,” he said.

The Minister said in some instances the Treasury had to settle outstanding wages of employees without giving a burden to the private sector who would be investing in these ventures.

Dr. Amunugama said the Government’s 51 percent would comprise land that is available at the site and also machinery on the institution. “This would help the investor to commence operations easily,” he said.

He said that soon after the Multi fibre agreement was introduced, which removed the quota system, some banks have been reluctant to provide credit facilities to the local apparel sector entrepreneurs.

“I will meet the bankers and take up this issue,” he said. With investments in the first quarter of the year reaching Rs. 2 billion the Board of Investment would be also opening a new BoI zone in Puttalam this year.

The Minister will also be touring Germany next week to meet officials of the European Union, political leaders and non-governmental organisations.

He said that travel advisories from the German Government too would be discussed during this one-week visit. This visit would be very important, as Germany would be chairing the European Union.

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