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Kantale sugar factory land to be leased to Singapore firm for 30 yrs, FSP alleges 

15 Feb 2022

The Frontline Socialist Party (FSP) yesterday (14) claimed that a cabinet paper is due to be approved by the Cabinet of Ministers regarding the lease of the entire land area belonging to the sugar factory in Kantale.  “A cabinet paper regarding the lease of the Kantale sugar company’s land to a Singaporean company for 30 years was submitted on 7 February. We have learnt that it was supposed to get approval yesterday,” FSP Education Secretary Pubudu Jayagoda told the media yesterday.  Explaining further, Jayagoda said that the sugar factory, which started in 1960 and was entirely government-run till 1986, was shut down in 1993, when it was producing about 16,000 metric tonnes (MT) of sugar and 3.9 million litres (l) of spirit per year.  “The previous United National Front-led Government attempted to privatise it in 2016 and established the MG Sugars Lanka (Pvt.) Ltd. – 51% of its shares are with the treasury and 49% are with a Singapore-based company called SLI Development. The then shareholder agreement said that only 14,000 hectares (ha) of the entire 21,000 ha land would be given to the company, whilst the rest would be distributed amongst farmers. Additionally, the agreement stated that water required for the company would be obtained from the ‘Kalu’ River,” claimed Jayagoda.  However, Jayagoda claimed that in 2021, a different Memorandum of Understanding (MoU) was signed between the present Government and the said company. “This MoU will give all of the 21,000 ha of land to the said company and water will be taken from the Kantale reservoir. Not only is this a harsh betrayal of the promise made to the farmers, but it also poses a threat to the water supply of the farmers who use the reservoir.” He added that the cabinet paper which was presented on 7 February states that in the first 10 years, 85% of the profits will be given to the investor, and questioned the logic of such an investment, when the investor was only contributing $ 70 million of the required $ 300 million of the project.


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