Sri Lanka’s over 30-year discarded Kantale Sugar factory and its land is set to be revived and restructured jointly by SLI Development Pte. Ltd, Singapore and its original investor MG Sugars Lanka (Pvt) Ltd under Built Operation and Transfer (BOT) agreement, a Finance Ministry cabinet paper revealed.
According to this memorandum, this factory and land will be leased to the Singaporean company for 10 years on the basis of granting 85 per cent of shares to the investor and 15 per cent to the government for an investment of US$ 300 million.
In the next shareholding, the ratio will be changed to 75 per cent and 25 per cent and keep on changing in accordance with share reduction basis to the end of the BOT agreement.
The lease agreement will be signed by the MG Sugars Lanka, SLI Development and the Treasury soon after the receiving cabinet approval for this arrangement, Finance Ministry sources said adding that the Attorney General has given consent to go ahead with the project.
Protesting against the proposed deal to government authorities, Convener of the Federation of National Organisations, prominent Sinhala writer, poet Dr. Gunadasa Amarasekera noted that this was a point blank handing over of the Kantale sugar factory and 20000 acres of fertile land to a Singapore company to set up Asia’s largest Ethanol production factory with the approval of the cabinet.
The new investment agreement to be signed will be to revive and restructure Kantale Sugar factory to process 4000 tons of sugar cane per day and manufacture 72,000 MT sugar per year, production of ethanol, generation of electricity and dairy products, as per the approval which is to be granted by the Cabinet of Ministers.
Several previous attempts to restore the Kantale operation had failed while the action taken for the revival of the factory during the previous regime was abruptly halted following a bribery scandal involving two senior government officials, including Chief of Staff of the then President Maithripala Sirisena.
They had allegedly blocked the transfer of machinery, scrap metal and other assets belonging to the Kantale sugar factory to a joint venture company that had signed a $100 million deal to revive the facility. (Bandula)
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