Cabinet Minister of Development Strategies and International Trade Malik Samarawickrama, who is also a very close associate of Prime Minister Ranil Wickremesinghe has been accused of playing dirty games in the Yahapalanaya government in his attempts to serve his very own personal agendas, by openly flaunting regulations and letting his henchmen run riot and call the shots.
According to highly placed sources, Samarawickrema has been pushing for the formation of the Agency for Development, which will take a direct hit on the Board of Investment, so he can run the show to his liking and will not stick to any regulations laid down in recent times by the Board of Investment which has been trying to enhance transparency in various investment related dealings.
“Samarawickrema has given powers to Mangala Yapa, an acquaintance of former President Mahinda Rajapaksa to call the shots and even issue directives to ministry secretaries and officials, even though he does not hold any official position,” sources said. The Bill to enact the Agency for Development is yet to be tabled in Parliament.
“Yapa is using his powers given to him by Samarawickrema and giving orders to the Secretary of the Ministry and officials as well as to other agencies. Even Prime Minister Wickremesinghe is using both Malik and people like Yapa to get their dirty work done,” sources said.
Following the change of presidency in 2015 and with the Yahapalanaya coming to power, the chairman of the Board of Investment appointed subsequent to the administration change promoted the concept of transparent land policy.
“As per the land Policy of the BOI they called for bids on a two envelop basis. One on the price of the land and secondly on the project. As for the price BOI has published the lowest price in the gazette. As for the Horana zone there has to be a minimum payment of US $ 40,000/- per acre and an annual payment of US $ 3850/- per acre. However since the ascendancy of the new President, as bids are called from time to time with public notice investors have the opportunity to bid higher on a competitive basis. During the last three months BOI has called for bids for all the zone lands including Horana,” a highly placed source pointed out.
While this policy was in place, so called business tycoon Nandana Lokuwithana, and ‘front man’ of former president Mahinda Rajapaka, who owns the Dubai Marriot Hotel, Steel Corporation and the latest tyre factory for which the Prime Minister laid the foundation stone in Horana entered the picture.
“Any applicant who seek to get land from BOI must submit their application and be evaluated and submit the highest bid price over and above the minimum price of US$40,000 per acre in Horana Zone. But, for Lokuwithana this rule did not apply. He sought the support of Samarawickrema and sought to get the land at a special price. He wanted to get the land of 100 acres for 99 years. The BOI board had refused and turned Lokuwithana’s offer, however he insisted and went to Samarawickrema for redress, who then submitted a paper to the Cabinet Committee headed by Prime Minister Ranil Wicremesinghe and got it approved,” the source said.
According to the valuation by the Chief Valuer the price per acre was US$ 11,000. Two companies had been given land, five acres and two acres at these rates and two other companies have submitted bids namely Singer Ltd., and D Samson Industries for 15 acres and 5 acres US$ 80,000/- and D Samson Industries at 40,000/- per acre respectively. Singer is seeking to produce refrigerators, washing machines and low cost furniture with an investment of Rs. 3,000 billion. Both these companies will also pay the annual facilitation charge of US $ 3850/- per acre. This facilitation charge is for the purpose of the water, electricity and the roads supplied and maintained by the BOI. Every enterprise located within the zone has to pay this fee to the BOI for the facilities they enjoy. This Company ‘Rigid Tyres’ is to be given land in extent of 100 acres at approximately US $ 11,500/- per acre instead of minimum US $40,000/- Lokuwithana was not content with the bargain he got from the Prime Minister and Samarawickrema and he wanted the annual facilitation fee of the BOI reduced from US$ 3850 per acre to US$ 1/- per acre. This proposition came to the Chairman BOI, who flatly refused.
“Then Lokuwithana went back to Samarawickrema and complained that the BOI Chairman Upul Jayasuriya was refusing to grant his request. Samarawickrema then submitted another paper to the Cabinet Committee, and got approval to reduce the annual per acre rate to one US dollar per acre. It is also proposed to carve out the 100 acres out of the Zone and separate it. This Company has also been given a further exception by granting them a 12 year tax holiday which no Company has been given after 27 April 2016 as per a decision of the Cabinet. The zone has been declared by President in a gazette. There is no provision to de zone this parcel of 100 acres. Therefore it would not appear to be ‘right’ to de zone it simply to accommodate one company, and the Government will not be able to justify it in the public domain,” sources said.
If the government charge Rigid Tyres US$ 11,500/- as one time payment and US$ 1/- per acre as the annual payment, then the government is openly violating the land policy of the BOI creating an unequal playing field and also violating article 12(1) of the Constitution, which is the equality rule. “This can even end up with the government being sued by other companies who have paid higher rates, while one particular company (Lokuwithana’s) get special treatment,” the source added.