Axe hangs over BOI head?

Wednesday, 18 January 2017 00:06 -     - {{hitsCtrl.values.hits}}


  • BOI Chairman objected to controversial tyre company deal, told to halt work after it attempted to clear land before agreements signed 

In a dramatic turn of events after details of two mega investment projects went sour, Board of Investment (BOI) Chairman Upul Jayasuriya has been thrown in the line of fire with speculation rife over his imminent removal from the State-run body.

Speculation in the upper echelons of the business world indicated on Tuesday that the BOI Chairman would be removed from his post after the BOI reportedly objected to some of the features in the investment deal the Government has struck with controversial businessman Nandana Lokuwithana to build a tyre factory in the Horana industrial zone. 

Despite rumours, Jayasuriya was in office yesterday. According to top officials of the BOI, the Chairman can only be removed through a directive of the President, and no such letter has been issued so far. 

Reports on the details of the tyre factory highlighted the granting a 99-year lease on 100 acres of BOI land at Rs. 100 per acre, which the Chairman had objected to. According to BOI regulations, the leasing of the land is only allowed to a maximum of 50 years after competitive bidding. The Cabinet Committee on Economic Management (CCEM) has bypassed BOI regulations to grant the concessions. 

This week the company had informed the BOI of moves to clear the land, only to be told to halt all work, as the BOI had not signed the lease agreement or the investment agreement yet, a high ranking BOI official told Daily FT on condition of anonymity. Speculation of the BOI Chairman’s removal arose against this backdrop and is likely to cause concern among investors over the independence of the Government’s key investment arm.  

Last week, the BOI was under fire for misinformation concerning a vehicle assembly plant which was initially claimed to have been licensed to assemble Volkswagen cars for foreign markets. It was later revealed that the BOI approved the investment by Senok Automobile Ltd. for an automobile assembly plant but did not specify any particular brand name. The mix-up brought embarrassment to the Government, which kicked off their development campaign with the groundbreaking ceremony for the plant in Kuliyapitiya. 

The mix-up prompted Deputy Foreign Minister Harsha De Silva to go on record explaining the details of the deal, while the Volkswagen parent company also independently confirmed that there were no brand investments in Sri Lanka. 

Lanka Coal Company Board sacked

The Chairman and Board of Directors of Lanka Coal Company (LCC) were removed with immediate effect last night.

Power and Energy Minister Ranjith Siyabalapitiya issued the directive to remove LCC Chairman Maithri Gunaratne and the directors, on the advice of the Auditor General.

According to a statement issued by the Ministry, the Auditor General in his report to the Sectoral Oversight Committee on Energy (dated 30.12.2016) recommended the dismissal of the board following an audit inquiry into the procurement of coal from 2009 to 2016.