Lankan industry raises concern over ban on land ownership on foreign companies
Sri Lanka’s industry is pushing for a 5-day work week while raising concerns over a government ban on foreign ownership of land in the island pointing out that a large number of manufacturing companies are foreign-owned.
These points were strongly highlighted by Pravir Samarasinghe, re-elected Chairman of The Industrial Association of Sri Lanka (IASL), while presenting his report during the association’s annual general meeting in Colombo last week.
Another major point that emanated from his report is the constraint in the power supply for industries. Mr. Samarasinghe pointed out that they are promoting self generation and supply of electricity to group companies located within the same premises through ‘wheeling’ and to the Ceylon Electricity Board under net-metering (systems). Net-metering has now become a reality, he added.
Measures have also been taken to reduce the cost of generating power by CEB, including investment in coal power plants, improvements to the mix and utilization patterns of different sources of power and the re-negotiation of pricing in PPAs with the Government entered at very high rates.
He said that they have made representations to the authorities for an affordable and uniform structure for property rates for SME and other industries as currently varying assessments ranging from 5 to 30 per cent are levied by different local authorities. Elaborating on the ban on foreign ownership of land, Mr. Samarasinghe said that the imposition of a 100 per cent tax on leasing of land is bound to curtail expansion and entry of foreign owned manufacturing companies to Sri Lanka. He noted that due to their continuous lobbying some exemptions have been granted to long established and listed companies.
He also flagged the proposal for a 5-day working week instead of 5-1/2 days with the same number of working hours per week. Trade unions are opposed to skipping the Saturday (half day) and working an extra 30-60 minutes per day during the week saying workers would lose overtime benefits. The industry, which is seeking this change to reduce cost of power and other items, says this won’t happen.
To sustain economic growth and private sector investment, Mr Samarasinghe emphasised the importance of a sound management of the economy with consistent policies and maintaining an investor-friendly environment. IASL appreciated the taxation reforms introduced three years ago with greater rationalization, simplification and reduction of taxes.
Though they are encouraged by the increased investment in the infrastructure, he said a more meaningful education system should also be a prerequisite for economic development.
The IASL noted that the initiatives the authorities have taken to offer incentives to promoted regional industrial development. Mr. Samarasinghe said that there should be more government support to SMEs to have access to credit facilities and facilitate forward linkages.
He pointed out that IASL is concerned about the low inflow of FDI and noted out that the export sector is important to have a healthy and well balanced economy. The export share in the GDP has gradually declined over last two decades.
He said that industrial export growth declined to 7 per cent last year and has been negative this year with depressed North American and European markets. Only 5 per cent of exports are registered to India, he noted.
Mr. Samarasinghe urged the membership to bring their issues to their notice so that the association could serve them better.
At the election, Nilam Jayasinghe of Ceylon Biscuits Ltd and Dinesh Dharmadasa of Ceylon Tobacco Co were appointed Vice Chairmen while the other members of the Executive Committee came from Alpha Industries, Browns, Hettigoda Industries, National Development Bank, Piramal Glass, Singer Sri Lanka, Unilever Sri Lanka, Associated Motorways, Haycarb, Litro Gas Lanka, Nestle Lanka, Richard Pieris and Lion Brewery Ceylon.
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