Legal Status

July 6, 2011 (LBO) – Sri Lanka’s recent state land sales to investors have procedural flaws that could result in the contracts being challenged in courts and deemed illegal, opposition lawmakers warned at an economic forum. Sri Lanka had sold two blocks of state land to CATIC, a Chinese defence contractor, and Shangri La, a Hong Kong based leisure firm, without open tendering.

At least one project has been given sweeping tax breaks under a law relating to projects classified as strategic investments.

Procedure

Harsha de Silva, a lawmaker and economist, representing Sri Lanka’s main opposition United National Party said under the strategic investment law relevant information about the project should be published in a state gazette.

Within 30 days the cabinet of ministers had to approve it and after six weeks a second gazette must be published giving the details of exemptions from the country’s tax laws. Within three months it must be brought to parliament for approval.

A gazette had been published relating to Shangri La. De Silva told an economic forum organized by the Ceylon Chamber of Commerce that no gazette had been published on the CATIC deal. Neither have the deals been brought to parl