Sri Lanka defends nationalization proffer

Sri Lanka yesterday defended a controversial move to nationalize "under-performing" private companies and rejected allegations that the move was politically motivated.

Media Minister Keheliya Rambukwella said the proposed legislation was aimed at improving productivity in companies that received tax and other concessions but were plagued with mismanagement and inefficiency.

President Mahinda Rajapakse's government is set to introduce the "Revival of Under-performing Enterprises and Under-utilised Assets Act" next week in parliament where his party commands a two-thirds majority.

Rambukwella denied charges that the bill was intended at taking over the businesses of those who finance the country's resistance.

"We are not targeting any folks, but what we hope to realize is a people-friendly board that will fully utilize the assets," Rambukwella told reporters in Colombo.

He discarded conflict claims that the planned nationalization would be a blow to the country's projection of attracting much-needed foreign investments.

Companies that either bought or leased property from the state in the past 20 years or received any tax break during that period qualify to be taken over, according to a draft bill.

The government has listed assets of 37 private companies to be taken, including some owned by key opposition backers.

One private company listed to be taken over is building a 250-room hotel in Colombo to be managed by the US hotel chain Hyatt.

There was no immediate comment from any of the firms.

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