Eran outlines role of promoting investments, good governance

Thursday, 29 January 2015 00:00 - - {{hitsCtrl.values.hits}}

Newly-appointed Deputy Minister of Investment Promotion and Highways Eran Wickramaratne in an interview with the Daily FT shares key insights in to the Ministry’s as well as the Government’s immediate plans to improve the outlook for and expedite investments as well as broader good governance and best practices with regards large scale projects. Here are excerpts: Q: What are the most significant changes that will be taken by the BOI to boost the 100 day manifesto? A: The significant changes are to speedily remove obstacles on investment proposals that have been entertained by the Board of Investment. We could double the investment in a very short time by focusing on the removal of these obstacles.

Q: What is the FDI target of the Government? A: Even though the Government claimed that the FDI received was about $ 1.4 billion in the past year, the actual FDI was about $ 1 billion when foreign loans were discounted. Our development model contrasts with the previous Government in that we will move away from foreign currency high cost borrowings to encouraging investment. Our immediate goal is to double FDI. Q: Are you supposed to continue the previous investment projects in the country with the 100 days program? A: Investments are about decisions made by entrepreneurs and business houses. They are ongoing. A change of government must not impede the decisions taken by business. Most of these investments are by small and medium size businesses. We will continue to encourage these businesses. The controversy has been about a few mega projects in which government also has substantial interest. Those projects are being reviewed for feasibility, pricing, compliance with regulation and corruption allegations. Q: The environmentalists have mentioned that the Colombo Port City Project is not suitable for sustainable development? But the constructions are still going on. What will be the Government’s future actions on it? A: There are many allegations about the Colombo Port City Project, including questions about environmental sustainability. The project is currently being reviewed. While I would not want to prejudge the financial, technical and environmental feasibility of the project, I must say that the project lacked transparency. It was an unsolicited project. While the BOI usually coordinates the approvals on investments, the role of the BOI was restricted to the financial incentives in this project, while a few individuals in the Sri Lanka Ports Authority, under the direction of select politicians, handled the negotiations. Minister Kabir Hashim and I could not obtain a complete set of documents to review the project from the BOI due to the ‘special’ arrangements in place. Now the Ports Authority and the BOI are working together. In future, investments that require financial incentives and commit state resources will be coordinated by the BOI. Q: Are you going to introduce incentives for the mega project investors coming into the country? A: There are incentives for investors that are set out as per the BOI Act. Mega projects could receive further incentives under the Strategic Development Projects Act. Investors have held back not so much because of the paucity of incentives but mainly due to the lack of confidence, inconsistent policy, the cost of corruption and obstructions at administrative levels. We will restore confidence, deal with corruption, and streamline management. Q: How are you going to investigate the circumstances of delayed investment projects in Sri Lanka? A: I presume you are talking about projects where agreements were signed and investments did not materialise according to the agreed time schedule. Those investments have the risk of losing pre-agreed status. However, we will consider each case on its merits.

Q: What is the future action against the corruptions occurred during implementing the highway projects in Sri Lanka? A: We are presently reviewing the latter phases of the Outer Colombo Highway and the Northern Highway. A preliminary investigation in progress will be followed by a more detailed investigation by an Expert Committee. If the investigation warrants further action, it will be taken. The Cabinet is giving high priority for the fight against corruption. A high level committee has been appointed. They have made their preliminary recommendations. Investigations will be followed up by judicial processes. We want to make sure that we go about correcting things in the right way. Good governance is not just a goal but it is also a process. We need to be patient until the process is in place. There can be no political witch-hunt but only the pursuit of justice. Q: What type of areas will the new budget address? A: We are not presenting a new budget. It is only an amendment to the Budget. The amendment is to deliver on President Maithripala Sirisena’s 100-day program. As promised we brought down the cost of fuel. We promised to bring down the cost of essential food. We promised to increase the salaries of public servants. The Budget amendment presented by the Finance Minister will deliver on those promises. After the general election in mid-2015 we will present a more comprehensive economic framework encompassing the different sectors of the economy.