CNCI seeks cautious approach in acquisition of State assets

The Expropriation Law has been passed and implemented and the Government has decided to acquire 37 companies nominated by it with immediate effect.

It was stated that underperforming enterprises and underutilised assets which were leased out to the private sector management by the Government on long-term lease agreements would be subjected to this takeover.

The Ceylon National Chamber of Industries (CNCI), while appreciating the Government’s efforts for a speedy development drive, observes that the speedy implementation and enforcement of the Expropriation Act has caused several other areas of major concern.

The CNCI has seen a negative signal that has resulted due to this act. Many members of the industrial community tend to believe that their legitimate business concerns are subjected to undue harassment and they feel insecure in their respective business areas under such a background.

In the circumstances the CNCI foresees the difficulties in achieving the set growth targets envisaged by the ambitious Budget proposals of the Government under such a scenario. Delaying the anticipated growth could result undue and severe constraints to the country. As such CNCI requests the authorities to exercise due diligence and transparency in implementing such activities.

The CNCI is of the opinion that the manufacturing sector needs further assurance and confidence for the uninterrupted operations in achieving their management and manufacturing objectives and targets.

In an era where the country is looking forward with enthusiasm welcoming foreign direct investments, restoring full confidence among the potential foreign investor community is also a major priority in attracting valuable FDI to the country.

Most of the industrialists are of the opinion that before implementing such acts, the enterprises should be given a sufficient timeframe and they also feel that if any violations of the original agreements have taken place, then it must be clearly indicated.

The industrial community further highlights that due to such acts, the banking and financial sectors will lose all faith and confidence in their business operations and enterprises and the strength of their management and this could lead to the reluctance and refusal of providing further financing facilities for such industrial operations.

Another concern will be on the previously State-owned and later privately-managed assets in the BOI as well as in the State-owned industrial zones. Further, the industrial community has raised concerns over the security and stability of the employees who are attached to such vulnerable enterprises.

As such the CNCI, on behalf of the industrial community in Sri Lanka, wishes to request the authorities concerned to be cautious and considerate when implementing such acts so that the industrial community will not be subjected to undue hardships and turmoil.