Sri Lanka unit of Singapore firm listed for expropriation

The Sri Lanka Exhibition and Convention Centre in Colombo's D R Wijewardene Mawatha is owned by Pico, a Singapore-based event management firm that has operations in 33 countries.

The Sri Lanka unit, Intertrade Lanka (Pvt) Ltd, has a 25 year build operate transfer contract with Sri Lanka's Board of Investment of which 17 years has expired. The land is leased from Sri Lanka' Urban Development Authority.

The draft law listed for expropriation 0.839 hectares of land located in Colombo's D R Wijewardene Mawatha bordering the capital's Beira Lake.

The planned law to be presented to parliament Wednesday is nationalizing enterprises or assets deemed 'underperforming' or 'underutilized' by the state.

Sri Lanka's The Sunday Times newspaper said in its online edition that Pico had made a proposal to build a larger convention centre at a different location, but the fate of the project was not known.

Sri Lanka's constitution has a guarantee against expropriation.

"The safety of foreign investment is guaranteed through the acceptance by two third majority of Parliament of the Constitutional Guarantee of Investment Protection Agreements," the Board of Investmetn says in its website.

"Under article 157 of the country's constitution, the agreement enjoys the force of law and no legislative, executive or administrative action can be taken to contravene the provisions of a bilateral investment agreement otherwise than in the interests of national security."

The BOI says Sri Lanka has also signed bilateral investment protection agreements with several countries including, which provide protection "against nationalization."

However Sri Lanka's current administration has a two thirds majority and has already changed the constitution once.

The draft expropriation law also lists another firm, Suchir NEB Projects (Pvt) Ltd, connected to an Indian concern.

The draft law has drawn fire from Sri Lanka's main opposition United National Party and even the Marxist Janatha Vimukthi Peramuna for targeting businesses linked to opposition parties, a charged denied by the administration.

Sri Lanka's Bar Association has also called for the law to be withdrawn. The island's main business chambers however have given a muted response, in a statement which indicated that they have endorsed the bill subject to some firms being removed.

READER COMMENT(S)

9. chandi Nov 08

The Sri Lanka unit, Intertrade Lanka (Pvt) Ltd, has a 25 year build operate transfer contract with Sri Lanka's Board of Investment of which 17 years has expired.

"Even when this is the case...is it still expropration?....

isn't it that BOI has neglected monitoring of their investments and made the private party make the transfer 17 years ago..or give an extension???

8. Chun Nov 08

Mr Chin
This act supersedes everything else in the past; bi-lateral and multi-lateral investment protection agreements (if any Sri Lanka has signed), right to own property, freedom to engage in a lawful business etc..

This will create a bad precedent. Remember while Jaywardene was critical of Business undertaing act of Sirimavo, it took 10 years for him to repeal that draconian act.

Would you invest if there is a danger of government taking over your business under various pretexts?

7. Chin Nov 08

Mr Fedrick,
If you was arranging FI for last 2 years and your so called investors just diverted their projects to other countries when they heard about a bill in a country they dealt for last 2 years then we can think the level of you and your investors.

If they were real investors who come here to build large hotels they will hire a reputed firm to analyze the content of this bill and advise them .

I think we do not want such un professional fake investors.

6. Fedrick Nov 08

I am an investment advisor and middle man promoting many foreign investment projects to many countries. I was promoting five large hotel and other foreign investments to Sri Lanka during last two years. But after this bill now my all investors decided not to invest in Sri Lanka and they diverted that in to other countries.

5. Mohamed H. Nov 07

I can see huge public protests engulfing Sri Lanka before the end of 2012. No longer will the people watch as the Rajapaksa family turn Sri Lanka into a dictatorship. The people elected Rajapaksa to put an end to the war, his services will soon no longer be required or appreciated.

4. Nille Nov 07

If I would invest in Sri Lanka, I would from now on be a little more careful. I would for sure think twice about it. Sad...

3. Rohan Samarajiva Nov 07

The comment below is a valuable one. It exemplifies the core problem in Sri Lankan policy discourse. We do not argue from principle (is it correct to unilaterally expropriate private property and violate promises upon which investment decisions were made?). Instead, the response is based on whether we like the victim or his building design. Sad.

2. Chris Nov 07

It is not whether building is pretty or ugly, but whether it is the right thing to do. What do you do with ugly people, disabled people call them under performing and exterminate them or what?

I think some one has given MR a D rope.

1. ihi Nov 07

I think its ok. it is an ugly building and there are better uses for this land than having a large exhibition hall.