Financial Times

Land sales: PERC goes beyond its brief?
By Dinushika Dissanayake
Recent moves by the Public Enterprise Reform Commission (PERC) to sell state land has triggered a fierce debate as to whether it has the right to do so or whether cabinet sanction was obtained for the move, informed sources said.

Asked for a response, PERC officials including the Director General, Leel Wickremarachchi declined to comment, saying that only the chairman was authorised to speak to the media. Repeated attempts to reach the chairman, Nihal Sri Ameresekere failed and The Sunday Times FT also did not receive a response to an email that was sent seeking clarification on these issues.

A JVP minister, who declined to be named said cabinet approval had not been given for the sales of land that are now being advertised. He also said Prime Minister Mahinda Rajapaksa brought up the issue at a recent cabinet meeting but the matter was not fully discussed there.

A former senior PERC official told The Sunday Times FT that PERC needs cabinet approval for any land sale. He said that in the case of selling an asset of a public company, then only approval of that state company board was necessary. "However, if PERC is selling a state entity itself, then cabinet approval is necessary," he said. Analysts said this raises an issue as to whether entities such as the Eppawela phosphate mine and the Kahatagaha mine, which have been advertised by PERC, can be sold without cabinet approval. There were also several high-profile lands including the former Colombo Commercial property opposite the Beira Lake that are up for sale.

Jagath Gunawardana, an environmental lawyer, said the PERC Act doesn't authorise PERC to sell land not owned by public firms. Neither the advertisement nor the PERC website describes the owners of these lands, an issue this newspaper was unable to clarify from PERC due to the don't-speak-to-the-media rule at PERC.

Gunawardana said that selling of state land without cabinet approval would be ulra vires the Act. "When they advertised to sell the Eppawala phosphate mine, I found that they do not have the authority to do so," he said.

The Act itself, according to him is drafted in such a way that PERC can only transact or facilitate sales of public corporations or enterprises, with government approval.

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