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History of the Rs. 2 billion bribe!

The anti-corruption stance of many in the government is now being questioned after the recent arrest of President’s Chief of staff and the State Timber Corporation chief in connection to accepting a bribe of Rs. 2 Billion.

The reason for the government to earn flak for it was that they failed to heed the warning given by the Sathhanda newspaper on March 19, 2017.

An article run under the headline “The first investor of the 100-day government gets fed up and is ready to leave the country” is important as it proves that corruption is not only relating to a person or people but is also fueled by carelessness and oversights.

සන 2Here is the Sathhanda revelation 
Courtesy - Sathhanda Newspaper March 19, 2017

‘The first inventor of the 100-day government gets fed up and is ready to leave the country’

MG Sugar Lanka is said to be unable to commence its operations in Sri Lanka as the officials of the Ministry of Land has failed to grant them the necessary land provisions for its business for over one year. MG Sugar Lanka is the first investor that had arrived in the country during the 100 day governments time.

As reported to us MG Sugar Lanka had arrived in the country during 2015 according to an agreement with the Board of Investments (BOI) to restructure the Kantale Sugar factory and the worth of the direct investment by them is said to be Rs. 15, 000 Million.

According to that agreement the company was to get 500 Acres of land for 30 years while they had agreed to renovate the now broken down Kantale Sugar factory. The company has fulfilled all the stipulated regulations for investors by August 2016 to commence its investment development process. At the time all government agencies other than the Ministry of Land had provided for the legal provisions needed for the investor to commence its operations. Despite the company’s repeated attempts to inquire as to why land was not being provided by the Ministry of Land, they had not received any response.

Therefore the foreign director board of MG Sugar Lanka had even informed of their difficulties to the Prime Minister and several other top government officials while expressing their severe disappointment at the unfair treatment being meted out to them despite their efforts to accept the open invitation by the new government to foreign investors.

When inquired sources from the Prime Ministers office confirmed this adding that during a meeting held on March 15, all parties were called for a meeting and was advised to resolve this issue expeditiously.

Sathhanda also reached out to the Secretary to the Ministry, Dr. I.H.K Mahanama who said the delay was due to several legal issues to release the lands. He also said after the meeting with the PM, the ministry has informed the Attorney General regarding these and the issue is expected to be resolved in a matter of days.

But the question remains as to why these legal issues could not be resolved for two years and what these so called legal issues are. When asked the Secretary was unable to pinpoint these issues exactly and only goes on to show that even through an official agreement the necessary provisions for investors cannot be given and issues cannot be resolved unless the President or the Prime Minister getting involved in it leaving investors without an alternative solution than reach out to them as it drags on for many years

With the country's economy in dire straits and direct investments as expected by the government not coming in, we wanted to give special focus to this issue. 

MG Sugar Lanka arrives at an agreement with BOI Chairman Upul Jayasuriya to restructure the Kantale Sugar factory on July 27, 2015. While the agreement was signed by Jayasuriya and Mendel Glik on behalf of MG Sugar Lanka at the time the Minister of Lands was the late Minister M.K.D.S Gunawardena and its Secretary was Dr. I.H.K Mahanama. 

According to this agreement even if MG Sugar fully modernizes the factory the government was to hold 51% of its ownership while the company was to have 49%. It was also expected to produce 80,000 Metric tonnes of Sugar in order to reduce 20% of the cost spent on importing sugar to the country. The investment of MG Sugar Lanka in this regard was a estimated Rs. 15,000 million which was a direct investment.  

The project was also expected to generate 2500 direct employment opportunities while 15000 indirect employment opportunities was also expected to be generated. The company was also set to bring the latest technology in sugar production to the country. 

Therefore it is questionable as to how Secretary Dr. Mahanama was not aware of possible issues in this economically important project and how he failed to inform the investors and other relevant parties in this regard. And it must be stressed that if this is the situation then no matter what the government does to attract direct investments they will not bear fruit due to these issues.

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