World Bank ready to brew tea on reforms agenda
Sizable World Bank funding amounting to millions of rupees for Regional Plantation Companies (RPCs) comes at a time when the industry is awaiting a cash infusion to ride high on its losses amidst state plans underway to restructure the sector.
Planters Association Chairman Sunil Poholiyadde told the Business Times on Thursday that funding from the World Bank is a necessity for the entire industry and considered it a welcome move.
During initial discussions with World Bank officials earlier this year in August at a workshop organised by the Plantations Ministry the industry had indicated the areas in which they would require assistance.
“We have clearly stated in what aspect we need World Bank assistance,” Mr. Poholiyadde said adding that this would be mainly in replanting, machinery and factory modernisataion.
However, it is learnt that the World Bank funding for the industry is expected to grant them the needed impetus through cash infusion into the different areas that require attention on the condition that reforms are being carried out in the sector.
The World Bank delegation is scheduled to arrive on December 6 to announce to the government their intention to assist the government in resuscitating the plantations industry.
During their visit next month the delegation is scheduled to meet Prime Minister Ranil Wickremesinghe, Reforms Committee Chairman and Advisor to the PM R. Paskaralingam, Finance Minister Mangala Samaraweera and the RPCs.
The last visit they made to the country was in August this year during which time they had met the local plantation industry and conducted a workshop.
Meanwhile, they would be awaiting government to work out the areas in which they require funding like in replanting of teas, machinery and other areas.
The ministry would be inviting the industry for a meeting with the RPCs scheduled for later this month in line with these new developments.
Funding for the estates is expected to be carried out in stages and as a result no money would be pumped into the industry without proper control measures adopted, the agency had noted.
The World Bank however, would want the industry to carry out reforms on the plantations like maintain minimum standards, appoint a proper and effective monitoring body not only to check on the various aspects of the plantations but also to ensure there is adequate financial control.
World Bank findings have indicated that certain RPCs borrowings have been used to fund their other subsidiary businesses.
In this context, the aid agency wants to ensure the government would keep a check on the RPCs and effectively carry out the funding in stages.
It is understood that government has plans to ensure the Golden Shareholder (the Treasury and a party to the lease agreement with the RPCs) would be involved in a bigger role than that exercised at present.
It is also likely that the plantation lease agreements would be have an increased time period to allow the corporate sector have a better planning.
Prime Minister Wickremesinghe had brought out these plans earlier this year stating intentions of bringing in new legislation highlighting the duties and functions of the RPCs and thereby ensuring the companies were answerable to Parliament like all other public institutions and agencies.
It was also pointed out that the RPCs should be a standalone company where the group balance sheets should not be accumulated to spell out the profits.