Foreign investor may get 5,000 acres on lease in Sri Lanka

The Sri Lankan government is willing to allow leasing of land to a foreign investor up to a maximum of 5,000 acres and relax the criteria in respect of projects which are “labour intensive with the focus on job creation," according to Finance Minister Ravi Karunanayake.

In an exclusive interview with THE HINDU at his office on Friday, Mr Karunanayake said any “investment-oriented” foreign investor could come to the country and do business without paying 100 per cent tax on leasing of land. “Earlier, the lease tax was very stiff.”

Answering questions on the issue, the Minister made it clear that foreign investors would not be able to buy lands. The only stipulation for the investors getting 99-year-long lease would be that they should not try to “indulge in buying lands” and remain inactive in doing investments.

For the purpose of foreign investments, the government had identified many thrust areas, each having a potential of investment for $ two billion.

Asked whether foreigners would be allowed for projects proposed under the public-private partnership (PPP) mode in respect of the dairy sector and the construction of 100,000 houses in five years, Mr Karunanayake replied in the affirmative and said the term “private” would mean a local or a foreign investor while the term “public” would refer only to the local.

On the plan for establishing an international financial centre in Colombo, he said the idea was to bring in a number of banks, “which have not been here,” to have offshore activities. He described as “doable” the deadline of April 1, 2016 for the establishment of the centre.

Referring to the move to liberalise tea import for value addition through blending, the Minister dismissed the criticism that this would adversely affect the domestic tea industry as one coming from “people with vested interests.” He argued that the opening up of the sector would make the industry “much bigger” than what it was as a close industry. “At present, we have lost markets all over,” he observed.

To a question whether the government would carry out the merger of the Mihin Lanka, a low-cost airline, with the Sri Lankan Airlines, as announced early this year, the Minister said the government had later found “core competence” of the former. So, the Mihin Lanka would confine itself to domestic operations while the other would be a regional player with long-distance flight services.