- Says Budget good but criticises lack of consultation with his ministry on opening up shipping sector
- Slams lack of engagement with stakeholders;refuses to amend 1992 Gazette limiting foreign ownership
- Believes change can only be justified if foreign companies invest $ 100 m each, insists he will not “send local companies home”
Setting the stage for a showdown between top ministers, Ports and Shipping Minister Mahinda Samarasinghe yesterday said he would oppose the proposed liberalisation of Sri Lanka’s shipping sector and faulted his colleague for failing to inform him or discuss the move with industry stakeholders before the Budget announcement.
Samarasinghe, who is from the Sri Lanka Freedom Party (SLFP), praised Finance Minister Mangala Samaraweera for a “good Budget with a long-term perspective” but slammed the proposed opening up of the shipping sector to allow 100% foreign ownership as “completely wrong.”
“This is a Coalition Government. The SLFP is part of this Government. Therefore if they are bringing a proposal like this and if an SLFP Minister is in charge of that subject they need to especially talk to the minister and his ministry. But sadly they did not do this,” Samarasinghe told a state TV program yesterday. “How can I amend a gazette issued by our ministry in 1992 when they have not even discussed it with me? Who else can amend the relevant Gazette? The Finance Ministry cannot do that, if they do that someone can file a case against it since by law I have the authority to make any amendment as Ports Minister, not anyone else.”
The Ports Minister was also irate that the proposal was not discussed with him for the industry. Pointing out that there are over 500 shipping and freight forwarding agents in Sri Lanka providing about 12,000 jobs and earning about $ 800 million in trade for the Sri Lankan economy, Samarasinghe went on to say that introducing such a proposal without discussion was unfair.
“These stakeholders should have been engaged with but they had not been engaged. I don’t know who proposed this from the Finance Ministry, it is a wrong proposal and I am totally against it. I will say this in Parliament as well. I will not sign this Gazette. I don’t want to sign a Gazette that will send over 500 local company owners and employees home,” he added.
The only caveat to allowing full foreign ownership would be if the foreign companies agreed to invest a minimum of $ 100 million, which would be the only scenario through which liberalisation could be justified, insisted Samarasinghe. He also emphasised that the potential earning of a large amount of Foreign Direct Investment (FDI) would be the only justification he could take before the local shipping industry to liberalise the sector.
“I am totally against this. I cannot allow the local industry to be destroyed. This is the SLFP’s stand. This therefore needs to be discussed with proper information. I believe Minister Mangala Samaraweera will see our point and amend this current proposal. But as I said, earlier if these shipping companies are willing to come, tell them to bring in a minimum $ 100 million FDI, then I can tell our local companies that it is a benefit to our country therefore you need to compete. Let Maersk or Mediterranean Shipping bring FDI. But I will not allow our local companies and industry to be strangled, destroyed and handed over to the foreigners. I want it to be made clear that I will not raise my hand for that. I believe Minister Samaraweera will agree that this proposal needs to be changed. There are two sides to a coin. ”