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Govt. to lease out four failed state ventures
The government has decided to lease out the Ceramics Corporation, the Rubber Manufacturing and Export Corporation (RMEC) and two sugar factories at Kantale and Embilipitiya to the private sector, a State Resources and Enterprise Development Ministry (SREDM) said yesterday.
Ministry Secretary Willie Gamage said the four failed state ventures with assets valued at more than Rs.10 billion had been earmarked for restructuring under a 30-year lease with a Compulsory Retirement Scheme (CRS) offered to some 1,000 employees.
He said the ministry hoped to finalize the leasing out process within the next three to four months under the government policy of phasing out loss-making state ventures.
Dr. Gamage said the response by investors to the SREDM ‘Request of Proposals’ had been encouraging and nearly 40 proposals have been forwarded for the two sugar factories alone while proposals were still being received for seven Ceramics Corporation and RMEC factories.
“We will lease out only the immovable and movable assets of the failed ventures while the total ownership will remain with the government. In addition to the assets value, we have added ‘Business Opportunity Value’ -- a new concept in the restructuring of state assets,” Dr. Gamage said.
He said loss making ventures are a huge burden to the government as the Treasury had to make monthly allocations to pay employees’ salaries of employees. For instance, the Treasury allocates nine million rupees every month to pay salaries of employees of the Ceramics Corporation.
Dr. Gamage said lessees must run the business as new enterprises and develop it using modern machinery and efficient management techniques while increasing job opportunities.
“The leasing out of four loss-making state ventures is only the beginning as the government has decided to wound up or restructure all loss-making state ventures,” he said adding that the SREDM had recommended the closing down of Laksala and the relocation of BCC.
“The government must not venture into businesses like buying and selling except supplying the vital utility services such as water, electricity and transport,” Dr. Gamage said. (SAJ)
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