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Friday Nov 15, 2024
Tuesday, 26 July 2016 00:02 - - {{hitsCtrl.values.hits}}
Bringing an end to a months-long dispute, Regional Plantation Companies (RPCs) yesterday agreed to pay the Rs. 2,500 salary increase to plantation workers with arrears following discussions with Prime Minister Ranil Wickremesinghe.
The Finance Ministry was given Cabinet approval last week to release Rs. 1 billion worth ‘Letters of Comfort’ to Bank of Ceylon and People’s Bank so that they can issue funds to plantation companies to provide workers with a Rs. 2,500 salary increase.
The Prime Minister’s Office in a statement said cash would be released from banks today, giving the plantation companies the ability to access funds necessary for the salary payment.
The pay hike was promised by the Government during elections last year but plantation companies have balked at implementing it, citing lower exports. However under this system the Treasury will effectively provide guarantees to the two State banks which can then issue the funds to plantation companies through the Sri Lanka Tea Board.
“The Plantation Industry Ministry has proposed to implement this scheme through the Sri Lanka Tea Board. The State banks should allow a maximum of Rs. 1 billion to the Tea Board to meet requirements of the plantation companies with a grace period of one year and a repayment period of three years,” the Cabinet paper said.
The loans will be provided to Regional Plantation Companies by the Tea Board based on requirements. However the Finance Ministry has demanded the Sri Lanka Tea Board and Plantation Industry Ministry prepare a “practical repayment mechanism,” as the Regional Plantation Companies under the Government have been unprofitable for years.
