BOI chief says his life at risk
August 2, 2016, 9:44 pm
Board of Investment (BOI) chairman Upul Jayasuriya told The Island yesterday that there was so much pressure from special interest groups all out to twist his arm to get certain BOI projects approved which are inconsistent with the policies of the institutions.
"The pressure is so overbearing that you need to be steely-nerved to resist it and go ahead doing the right thing. Sometimes, I feel my life could be at greater risk than it was when I was the BASL president," he said,
The BOI chief noted that both parties (BOI and potential investors) would be well served by engaging in correct practices in the process of reaching investment agreements.
Asked why the BOI had stopped allowing Mr. Paint Lanka Ltd in Vauxhall Street from going ahead with a land-lease agreement and a Foreign Direct Investment (FDI) proposal made by them, Jayasuriya said it was a questionable deal aimed at making a fast buck.
The BOI chairman said Mr. Paint was holding on to a lease of 24 perches of land out of 254 perches owned by JEDB and pressuring the BOI and JEDB to lease out the entirety of the property at Rs. 5.6 million per perch taking cover under a valuation made by the Valuation Department.
"Initially the lease value was Rs 4.5 million per perch in 2014 as per the government valuation and it was subsequently valued at Rs 5.6 million in March 2016. Then the BOI succeeded in increasing the price from Rs. 5.6 million to Rs.7.5 million per perch.
Now the latest valuation shows that a perch in this area with the much treasured water front is fetching at least Rs. 10 million.
"The land in question is in three separate plots and currently the lease term of two of the plots has ended, but the Company has paid the lease for 4-5 months without the concurrence of the JEDB, and on the strength of this fact, Mr. Paint has obtained an enjoining order to prevent the JEDB from selling the land to a third party at the true market value.
"Apart from obtaining the right price, the BOI has to be prudent when it assigns lands to local partners to ensure that they are able to obtain financing from foreign investors with respect to development of the property. The BOI can’t let a so-called local partner make an undue profit by leasing out state-owned property to foreign investors."
Chaminda B. Goonathilake, Managing Director of Mr. Paint Lanka Ltd. in Vauxhall Street, contacted for comment, he said the allegation was not true and he could establish his company’s bona fides.
"Our proposed mixed-use development project- BOI agreement (EC4/179)- has the ministry approval, JEDB chairman’s approval, Cabinet approval (Ref NO 13/1684/561/02) in 2014 for a 99-year lease, Economic Committee approval of the present government, UDA development permit for 37 floors, BOI facilitator agreements and BOI investment agreement draft. As there were plans to acquire this land, evict us and lease it bypassing us, we obtained an injunction against our eviction without a judicial process. On 24th June 2016, when we went to the Legal Department to sign the investment agreement with our Singaporean investor, we were informed that the signing had been cancelled. We were not given any reasons for doing so. Such cancellations will not help in attracting foreign investments to this country"."
