PARLIAMENT

Revival of Underperforming Enterprises and Underutilized Assets Bill:

'Properties belonging to private institutions will not be touched'

Sandasen MARASINGHE and Disna MUDALIGE

Speaker Chamal Rajapaksa presided yesterday when Parliament met at 1 p.m. After the presentation of papers and oral questions, the House took up the second reading of the Bill, Revival of Underperforming Enterprises and Underutilized Assets.

Prime Minister D.M. Jayaratne: I present the 'Reviral of Under Performing Enterprises and Underutilized Assets Bill' for second reading as an urgent Bill of national interest.

Presently, many state resources have been provided to private investors with the hope that these investments will contribute towards new employment opportunities and income avenues to the country.

So, if these ventures have failed to embark on their investments or have not achieved successful results, the State has the sole authority to take over these assets back to the government for the benefit of the general public of the country. Generally, these are the people's assets. Some of these underutilized lands and properties situated in Colombo, are very valuable and important assets.

The UNP is afraid that the State will take over private businesses which support their party. This will not happen. The government does not object to any profit-making venture in State resources. Only the under performing ventures will be taken over to make them more fruitful investments for the promotion of the national income.

I stress with responsibility, that properties belonging to any private institution will not be touched. Only State resources given to them will be taken over if they are underutilized or under performing.

John Amaratunga (UNP): The entire opposition is against this Bill and I would like to note that we will use our votes against this Bill.

Dayasiri Jayasekera (UNP): During the past, many private enterprises had been taken over by various governments which were in power and the results being unsuccessful. The present government is also going to make a dangerous mistake which will lead towards the collapse of these enterprises. However, we respect the decision given by the Speaker to take up this Bill for debate and accept it as the last verdict.

When looking at private enterprises which are listed to be taken over, I can see that taking over of the Sevanagala Sugar Company is politically motivated. It is good that the government taking action against under performing or loss incurring enterprises, but we are against the taking over of profit making enterprises.

Economic Development Minister Basil Rajapaksa: The Bill presented by the Prime Minister today regarding state assets, has nothing to do with private property. These state assets have been given to various groups and individuals during the past for investments. This is a tradition continued from ancient times. These were given with certain motivations and when these motivations were not achieved, these had been taken back to the State. During the recent past, not only local investors but also foreign investors were also given state assets.

'However, those were given under certain conditions. For example, the fertilizer subsidy is given to farmers with the condition that these fertilizers must be used for cultivation. When that condition was breached and when the fertilizer was used for alternative purposes, the police raided and fined them.

It is the same with the distribution of state resources for economic ventures. Therefore, the same rule that applies to the poor farmer should apply to these large scale investors as well. None of these properties are private or individual properties. All these properties belong to the people of this country.

This kind of Bills had been also presented even in the history of Sri Lankan politics. The Supreme Court has given its approval to some of them and accordingly those were enacted. This Bill also went through the same process. The government has a responsibility to introduce necessary laws for an efficient coordination and management of State and the private sector, for the betterment of the economy. It also has the provision to take necessary measures for the efficient management of state property. These are provisions given by the Constitution of this country.

So this Bill is a legal bill according to the Constitution. We have no rush to pass this Bill. But this is an important step that should be enacted without delay. This Bill is necessary to protect the national assets of the country. That is why we have presented it as an urgent Bill. This is something that the President announced in his budgetary proposals too. So, we have decided to implement it before the presentation of next budget. This government keeps to its promise and one by one all other promises will also be fulfilled.

The State property which is to be taken over, had been selected without any political or personal favoritism or interference. Most of these enterprises have gone bankrupt and failed to earn any profits. Some of them were already not in operation. Most of these enterprises are in free trade zones and this is a deprivation of investing opportunities for others. This is a waste of state assets.

One of the hotels which is to be taken over has been found poorly maintained and had been neglected for years. This is a vital state asset and it should be revived immediately, since the country needs such hotels with the tourism boom in the country. There is no other option, other than taking over it and making it a profit making avenue once again.

When taken into account, the Sevanagala Company, consisted of two agreements pertaining to it. One was signed when privatizing it and the other with the BOI, to obtain tax benefits. These agreements clearly mention the vast number of advantages that they have agreed to bring in to the country. But none had been realized. The various tax benefits granted to it also included an eight year tax holiday.

My officers have informed me that they have not paid income tax. If they had earned a profit, they should have paid income tax. A member said that when sugar is produced molasses is a sub product, and there had been a request to the Commissioner of Excise to import molasses. When Excise Commissioner did not do so, the owner had filed a case in Court. Lands had not been given to produce illegal liquor. The government has given these facilities to bring prosperity to the people in this country. This land has been given to cultivate sugar cane. When Mahaweli lands were given, it had taken a long time to give its deeds. One argument was that most of the government institutions do not earn profits. One such institute is the Ceylon Electricity Board. The CEB is functioning not to earn profits, but to provide a service.

Our government will provide electricity to each and every house in this country by next July. When we consider the CTB, it too is a service. Private buses run only on a profit basis on routes that are profitable.

But the CTB also provides a service. It is a Mahinda Chinthanaya concept. There are government institutions that earn profits. The Kurunegala Plantation, Halawatha Plantation and the Lanka Posphate are such institutions. There are government institutions that earn profits and those not earning profits, provide services.

The government has given assets and institutions to the private sector to gain profits. If they do not earn profits, what else should the government do, except take them over.

Some members say that the government is attempting to takeover the assets of temples. The government would not do so. But it is not this government that took over the assets of temples, but the UNP who took over the assets of the Gatambe temple, Gampaha Sama Viharaya etc. Some said that the houses and lands of people would be taken over by the government which is not true. The UNP took over the assets of Pandit William Alwis on Galle Road.

Deputy Speaker Chandima Weerakkody takes the Chair: Former UNP President R Premadasa, attempted to takeover the house of Mervin Silva. They also took over the assets of Jinadasa Mudalali who was a UNPer, for the reason that he did not display a photograph of J R Jayewardene.

This government is taking measures to strengthen the private sector and private banks.

The Seylan Bank is one such bank. When it went bankrupt, the government stabilized it by taking over its management.

To the UNP, only one person is private sector, but to our government, even the monger on the street is a member of the private sector. So we have taken measures to uplift their-self employments.

Meanwhile establishing facilities to uplift the living standards and economic standards, President Rajapaksa had led the forces to defeat terrorism and also guaranteeing people's right to live peacefully.

This government assures that all facilities and an environment will be created for investments and we expect the support of the members to pass this Bill.

Anura Kumara Dissanayake (DNA): At this moment when the 'Revival of Underperforming Enterprises and Underutilized State Assets Bill' is taken up in this House, I am glad of the opportunity to speak a few words.

According to Clause 9 of the Bill, the government defines underperforming enterprises. However, it has already decided the enterprises which are underperforming. In contrary, this must have been the duty of the relevant ministry. Therefore clause 9 of the Bill is useless. This Bill has acquired the executive powers as well as judicial powers. Therefore we are against this Bill. It is true that the government should come forward to safeguard the national assets of the country. We also agree that those national assets should be utilized in an efficient manner. However, it is unclear as to how these enterprises will be taken over and given back to the new investors?

These valuable resources can end up in the hands of close acquaintances of the government without following the proper procedure.

Karu Jayasuriya (UNP): This is a highly controversial Bill in the country. A large number of people have lined up against this Bill, including religious leaders and the Bar Association. This is an exploitation of the two-thirds majority of the government in the House. The government should not have presented it as an urgent Bill. Democracy and media freedom in the country are rapidly degenerating. There are people who are against this Bill even within the government. The government is following an autocratic rule. We urge the government to correct its path.

M A Sumanthiran (TNA): The list of property that are to be taken over are categorized as underperforming enterprises or underutilized assets. However, it is the duty of the members in this House to assess whether these enterprises are really underperforming. That right is not granted to the members of this assembly by this Bill.

This Bill only includes the name of one enterprise called the Hotel Developers Lanka PLC. Has the government presented this urgent Bill with the sole concern on this enterprise? The Cabinet has abused its powers when referring this Bill as an urgent Bill to the Supreme Court.

Wijeyadasa Rajapaksa (UNP): One of the weaknesses in this Bill is that it exceeds the limit of constitutional powers. It has taken up both executive powers and judiciary powers. This Bill is not presented to safeguard national assets from foreign businessmen. This is presented to hinder the opportunities of local businessmen to come forward. We, as the members of this House, have a responsibility to protect the Constitution. However, this Bill is a breach of the Constitution.

Harsha de Silva (UNP): I have myself worked as an investor and economic specialist. I recognize this Bill as a negative move. We were educating the businessmen and general masses over the danger of this Bill during the past few weeks. Minister Basil Rajapaksa said that these state assets were not given permanently to these investors, but for a certain period of time. However, this Bill has the provision even to take over State resources which were sold to private groups. Some of these enterprises which are listed to be taken over are not loss incurring enterprises.

Eran Wickramaratne (UNP): This Bill is presented today to teach a lesson to the business class of the country. Minister Basil Rajapaksa observed that the Sevanagala company did not fulfill the conditions laid down in the agreements. This is not the reality. This company is a profit making venture.

D M Swaminathan (UNP): I have one question as to why this Bill was presented to Parliament as an urgent bill? When we consider the Sevanagala Sugar Industries Limited, it is a profit making company. But this government could have given these institutions a one year period or at least a six month period to comply with the government's requirements.

Gayantha Karunatilake (UNP): The people thought laws would be imposed to protect the sovereignty of the people after the elimination of terrorism. But it did not happen. This Bill is discouraging local as well as foreign investors.

Kabeer Hasheem (UNP): The lands taken over by the Sirimavo Bandaranaike government from land owners with the promise of dividing them among the people who did not have plots of land. But later, those lands were handed over to multinational organisations.

Coconut Development Minister Jagath Pushpakumara: When the Sevanagala Sugar Company is considered, the sugar product in 2001 was 24,296 metric tons and this year it has come down to 6,000 metric tons. The spirit product was 2,025,800 litres in 2002, but it had increased to 4,387,200 litres. The sugar production in 2002 in Sri Lanka was 12 percent of the requirement. But it has reduced to 4 percent today.

You said the land was leased to the Sevanagala Company in July last year. But you enjoyed every right of these lands. It is noted in the agreement that all rights of the employees should be secured. But the number of permanent employees had been reduced from 800 to 160 under the present management.

The country needs sugar. As that institute did not stand by the agreement, the Sevanagala Company is to be taken over. The Sevanagala Company produced 2 million bottles of liquor to the local market, and one million to the foreign market.

UNP MP John Amarathunga asked for a division.

The Bill was passed with a majority of 76 votes.

Parliament was adjourned until 1 pm on Friday (11).

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Revival of Businesses Bill debate into second reading

Sandasen MARASINGHE and Disna MUDALIGE

Speaker Chamal Rajapaksa yesterday allowed the second reading of the Parliamentary debate on the Revival of Underperforming Enterprises and Underutilized Assets Bill to proceed with after overruling the Opposition.

The Speaker announced his decision after considering the submissions by members of both government and Opposition when Opposition members objected to the Bill being taken for the second reading, raising a point of order.

Government members pointed out that the Supreme Court had already declared its decision that this Bill was not inconsistent with the constitution and argued that this Bill should be taken up for the second reading.

When the members of both government and Opposition argued for and against the Bill being taken up for debate the Speaker adjourned Parliament for 30 minutes at about 3.30 pm to consider the submissions before announcing this decision.

Announcing the decision Speaker Chamal Rajapaksa stated that the Cabinet of Ministers had decided that this Bill is urgent in the national interest and under such procedures same was presented to Parliament. Then it was directed to the Supreme Court to find out if it were inconsistent with the Constitution, in accordance with the procedure.

He also added that the Supreme Court informed that the Bill was not inconsistent with the constitution.

The Speaker also stated that no issue is raised as the Supreme Court has scrutinized each clause of the Bill though the Opposition members stated that certain clauses were against the constitution.

The Speaker also stated that although the Opposition said that the Bill could not be debated under Subjudice Law as there were a few cases filed against this Bill before the Court, according to the decision by Speaker M H Mohamed in 1980 on the Richard de Soyza incident, it is obvious that our Parliamentary tradition is not much bound by Subjudice Law.

The Speaker stating that nobody could influence the right of Parliament allowed the debate on the Bill which was in the national interest to continue.

Ministers Nimal Siripala de Silva, Susil Premajayantha, Dilan Perera and Deputy Minister Lalith Dissanayake expressed their views for the government while members Sajith Premadasa, Palitha Range Bandara, Wijedasa Rajapaksa, Anura Kumara Dissanayake, Dayasiri Jayasekara, M A Sumanthiran, Ajith Perera, Joseph Michael Perera, Karu Jayasuriya and Harsha de Silva spoke for the Opposition.