Kantale sugar factory revival embroiled in land issue
The long-delayed Kantale sugar factory revival is embroiled in controversy with government authorities failing to fast-track the project and release the 500-acre land to the foreign investor.
It was nearly two years ago, in July 2015 that the Board of Investment (BoI) inked an agreement with MG Sugars Lanka Pvt Ltd to revive the defunct Kantale Sugar Factory. The company, a partnership between Bangalore-based Shri Prabulingeshwar Sugars Chemicals Ltd and Singapore’s SLI Development Pte Ltd, had agreed to invest US$100 million inclusive of a Swiss Bank guarantee of $10 million.
The company had then conducted a $2 million feasibility study on the project through a German Company Bosh.
It planned to process 500,000 metric tons of sugarcane within 18 months after re-launching the factory providing benefits for 25,000 farmer families in the area.
Last week, Board of Investment (BoI) Chairman Upul Jayasuriya told reporters in Colombo that the investor was keen to begin the project soon after factory and the 500-acre land is handed over by the government.
He said the factory and land should have been vested in the foreign investor following their supplementary agreement in August last year, but its owner, the Agriculture Department was delaying the clearance of the premises of discarded machinery and handing over of the land to the particular investor.
However when contacted, Agriculture Minister Duminda Dissanayake expressed his surprise stating that this land does not belong to his ministry and was coming under the purview of the Land Ministry.
Confirming this, Dr. I.H.K. Mahanama, Secretary of the Lands Ministry, told the Business Times a definite decision will be taken by the Cabinet Committee on Economic Management (CCEM) on the disposal of a large stock of obsolete machinery worth millions of rupees.
Prime Minister Ranil Wickremasinghe has also spoken to him about this issue and it will be sorted out soon, he said adding that no decision has been taken to call for tenders to sell that machinery for scrap iron.