PPP comes to the rescue of failed state entities
Rising public debt and spending rationalisation has prompted the present government to bring public-private partnership (PPP) to the forefront in revitalising loss- making and defunct state- owned enterprises.
The Ministry of Small and Medium Business and Enterprise Development, Industries and Supply chain Management will be reviving all crippled state owned entities through PPPs, a senior official of the ministry said.
The government has made it clear that it would not subsidise loss- making and debt-ridden state-owned corporations and enterprises.
Under this initiative, the Kahatagaha Graphite Lanka Ltd will be restructured with the involvement of a private investor. The ministry will call competitive bids to find a prospective private investor to add value to the mined graphite at the Kahatagaha mine.
At least 65 – 70 metric tons of graphite per month is excavated at the Kahatagaha mine. Sri Lanka supplies only 7 per cent of the graphite requirement in the global market.
The government has recognised value addition as the only way to enhance the export value of graphite and the cabinet had approved the proposal to seek expressions of interest from prospective investors.
A senior official revealed that although the world market price of one metric ton of Kahatagaha graphite was US$ 2000, 1 kg of graphene, an extract from graphite, could be sold for $5000.
Foreign investors will be excluded from the payment of the VAT under the SDPA.
This Act was introduced by the previous Rajapaksa regime in February 2008 and it was amended twice in 2011 and 2013 to widen its concessions.
The UNF government has not made use of SDPA fully and it was confined to limited use administratively without repealing the Act while failing to introduce a new investment law. The cabinet paper devised to reactivate this Act blamed the previous UNF government for “restricting the usage of the SDPA which has resulted in the hampering of international investor sentiment in Sri Lanka. (BS)