'K oheda yanne, malle pol" is a pithy Sinhala saying which literally means 'saying one thing and doing another thing'. This is how our cartoonist Munaf has caricatured the latest faux pas by the authorities in the drafting of the controversial expropriation law, where the wrong company has been listed for a take-over.
The government's target was the unfinished Celestial Residencies building, owned by the collapsed Ceylinco Group, and listed it as an 'under-utilized asset', naming Ceylinco Leisure Properties as the owner. Now, according to our report on the previous page, there is evidence that the actual owner is another company, Ceylinco Homes International Lotus Tower (the mistake arising probably due to the complicated structure of the collapsed Ceylinco Group)! Already the Competent Authority has found a consortium of investors to take over this asset and preparations are underway to settle the debts to creditors, depositors of a failed Ceylinco Group firm that had a stake, prospective owners of the apartments who had paid a deposits, and lending banks.
If the government goes ahead with this particular take-over, it could end up in court given that the wrong company is to be paid compensation while the rightful owners get zero. On the other hand, making a change at this stage is not that easy, as a name change would have to be presented to parliament as an amendment to the Expropriation Law. It would have to be submitted to parliament as an amendment to the schedule. This goes against the grain of the government argument, at one point when facing the deluge of opposition to the bill, that this was a once-and-for-all law and won't be subject to change.
How the authorities will overcome this latest fiasco remains to be seen. Other problems that arose from companies acquired under the law relate to Lanka Tractors (dispute over land being owned by the state), Pelwatte Sugar (lease agreement not applicable under this law), and Chalmers Granaries (already owned by the UDA). This law was widely criticized as a hurriedly-adopted one which would have serious ramifications in terms of foreign investment. The haphazard decision-making process continues in other areas. On Thursday, unions warned of serious consequences if the government went ahead and 'sneaked' in a proposed pension scheme under a bill being presented in parliament to amend the Employees Provident Fund law.
They voiced their concerns at the regular meeting of the National Labour Advisory Council (NLAC) - made up of workers, employers and government -, resulting in under-pressure Labour Minister Gamini Lokuge agreeing to delete these clauses from the bill, now before parliament. The Minister and his officials should have known better than bring back the pension proposal after the protests and the unfortunate death of a garment industry worker when the government presented the pensions bill last year. At that point, the government and the Minister himself clearly stated that any such pension proposal will be first discussed with all stakeholders. It was UNP MP Joseph Michael Perera who in early December discovered the 'pension' inclusion in the EPF bill and raised the issue in parliament.
Following this the Business Times ran detailed stories and an editorial on the issue, urging the government to consult stakeholders on the proposal or face the wrath of the workers. Lokuge has promised to drop clauses relating to pensions and also agreed to amend some other provisions relating to the EPF being involved in building construction and land purchase and to strictly confine this clause to construction of a 33-storey headquarters for the Employees Provident Fund. Why, in the first place, the authorities want a costly, tall 33-storey building to house all EPF and ETF units' beats one's imagination.
The other proposal is to rent out excess space to other government departments which raises another, possible problem: Would these departments default in their rental payments just as the Ceylon Electricity Board and the Ceylon Petroleum Corporation default on huge tax dues to the Treasury? In June last year, the Business Times reported how electricity at a Tax Department unit at the Access building in Union Place, Colombo was cut off as the former owed Rs 23.3 million in delayed monthly rentals. Another problem is the 'clash' between the Treasury and the Central Bank (CB) over a number of issues including devaluation and pressure on the rupee, GDP figures, balance of payments and inflation.
Treasury sources argue that the (CB) figures don't tally with Finance Ministry data which reflects ground-situation realities. Official sources say while Treasury Secretary P.B. Jayasundera and Governor Ajith Nivard Cabraal have a 'cordial' relationship in public and at other meetings, the relationship is not so cosy. The Treasury is also concerned about the interest rates issue where, instead of allowing market forces to take over with some degree of intervention, the CB is holding back any increase in rates.
But CB sources said if the Treasury is so concerned about CB policy these issues could be raised at Monetary Board meetings in which Dr Jayasundera is a member. It is essential that the Treasury and the Central Bank work together in the interests of the country's economy and governance, a New Year resolution the government could well adopt in addition to avoiding any more disasters like the expropriation law and the pensions issue. |
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