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Sri Lanka Govt Defends Nationalization Bid
November 03, 2011

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Colombo, Sri Lanka. Sri Lanka on Thursday defended a controversial move to nationalize “under-performing” private companies and rejected allegations that the move was politically motivated.

Media Minister Keheliya Rambukwella said the proposed legislation was aimed at improving productivity in companies that received tax and other concessions but were plagued with mismanagement and inefficiency.

President Mahinda Rajapakse’s government is set to introduce the “Revival of Under-performing Enterprises and Under-utilised Assets Act” next week in parliament where his party commands a two-thirds majority.

Rambukwella denied charges that the bill was aimed at taking over the businesses of those who finance the country’s opposition.

“We are not targeting any individuals, but what we hope to achieve is a people-friendly management that will fully utilise the assets,” Rambukwella told reporters in Colombo.

He rejected opposition claims that the proposed nationalization would be a blow to the country’s prospects of attracting much-needed foreign investments.

“When they see that we are putting in place systems to ensure better management, they should be encouraged to come and invest here,” Rambukwella said.

Companies that either bought or leased property from the state in the past 20 years or received any tax break during that period qualify to be taken over, according to a draft bill seen by AFP.

The government has listed assets of 37 private companies to be taken, including some owned by key opposition backers.

One private company listed to be taken over is building a 250-room hotel in Colombo to be managed by the US hotel chain Hyatt.

There was no immediate comment from any of the firms.

Opposition spokesman and former foreign minister Mangala Samaraweera described the takeover bill as a “land grab based on political victimization.”

Rajapakse’s government has halted a previous privatization drive and bought back some previously privatized ventures, including the national carrier Sri Lankan Airlines.

Sri Lanka has been trying to woo investors after crushing Tamil Tiger rebels in May 2009 and declaring an end to nearly four-decades of ethnic violence that killed up to 100,000 people, but foreign direct investment has declined.

Agence France-Presse