Financial Times

JEDB/SPC revamp stirs controversy
A controversy is brewing over plans by the debt-ridden State Plantations Corporation (SPC) and the Janatha Estates Development Board (JEDB) to get into property development despite a government decision to completely revamp both organisations.

Plantations firms and labour unions have voiced concern over the state of affairs at these two organisations, which control the remaining state plantations, saying they were in dire financial straits and asking the government to intervene and take control of the management.

Plans to lease the estates under their control have also led to allegations of bribes being demanded by officials. Much of the criticism is directed at a move by the JEDB and SPC to launch a joint property development project on prime land at Colombo 7.

Questions are being asked as to why the JEDB and SPC are not selling off their assets to raise the funds required to settle their huge debts as has been recommended.

"The idea should be to sell the property and get the money so they can pay the workers and pay off their debts," a plantations industry official said. "The government is keen to privatise (or restructure) the JEDB and SPC and these two organizations are not expected to exist in their present form by January," he added. "So why are they going for property development now?"

Earlier this year the JEDB and SPC advertised calling for offers to lease the 30-odd estates they control. Subsequently, the Economic Reforms Committee headed by Prime Minister Ranil Wickremesinghe decided that the two groups should be restructured.

Public Enterprises Reform Commission chairman Chrisantha Perera said PERC had been given the task of revamping the JEDB and the SPC. PERC has requested the two organizations not to dilute the estates pending its plans for restructuring, but had suggested they sell some of their non-essential land assets to raise funds.

Labour unions have alleged the JEDB and the SPC were facing financial difficulties owing to mismanagement. The JEDB and SPC had asked the Treasury for funds that they said were required to sustain the organizations as they were having huge cashflow problems.

But PERC had recommended to the Treasury that the two state plantation organizations sell off their freehold land not connected to their day-to-day activities.
Despite this recommendation, the JEDB and SPC had advertised again, this time for a joint property development project at its Gregory's Road property.

The property is over 100 perches and valued at over a million rupees a perch. Investors who have shown interest in leasing estates owned by the JEDB and SPC have also alleged that senior officials have demanded bribes for the estates to be handed over.

One investor is known to have complained to a government minister. JEDB and SPC chairman Dharshan Jayanetti was not available for comment on the allegations. The Joint Plantation Trade Union Centre (JPTUC) has asked the government to hand over the JEDB and SPC estates to the workers to be run by them on a cooperative basis if the two organisations were unable to manage the estates properly.

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