Cabinet clash over vehicle factory

Minister and the United People's Freedom Alliance General Secretary Mahinda Amaraweera will submit a memorandum to the Cabinet calling on the Government to withhold a proposal to grant concessions to a vehicle importer trying to assemble vehicles locally.

Finance Minister Ravi Karunanayake last week submitted a Cabinet proposal seeking a 70 percent tax concession for locally assembled vehicles by Vehicles Lanka (Pvt.) Ltd with used vehicle parts.

Mr. Amaraweera told the Sunday Times he raised objections to the proposal this week on the grounds that concessions should not be given to one selected company and that particular importer had already violated Customs regulations.

Mr. Amaraweera said previous investigations against the company had been suppressed due to political pressure even during the previous government.

Mr. Karunanayake was seeking the concession for a maximum of 2,250 vehicles over a three year period and the company was assembling vehicles using used vehicle parts, enabling it to make higher local value addition.

Last week, the Sunday Times reported that the Finance Ministry had directed the Customs to immediately release eight containers of motor vehicle spare parts, imported by the same company and detained by the Customs for investigations.

Meanwhile this week, the Police and the Customs raided the assembling plant at Minuwangoda and took into custody 54 vehicles assembled with imported spare parts.

Customs officials said the raid was carried out as the spare parts have been imported separately and used to assemble vehicles. This contravened the Motor Traffic Act.