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Purpose is to take companies to the stock market: Dr. Godahewa
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Necessary to form legitimacy through Parliament: MP Rajapakshe
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Sinister connection between Port City and Selendiva: JVP
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Prerogative of Parliament to appoint such a body: UNP
"There is an ulterior motive behind this. That is why these are taking place. The Cabinet paper received approval on 17 May; on 18 May, Parliament received the court determination on the Port City Bill. It was debated on 19 May and passed on 20 May. These incidents are all linked" Janatha Vimukthi Peramuna MP Vijitha Herath[/caption]
Even though such investment companies can be incorporated by the Treasury, legal experts claimed that Selendiva is an exception, as it deals with matters concerning properties located in highly valuable lands in Colombo, and therefore, Parliamentary approval should be acquired prior to proceeding with any investment.
As learnt by The Sunday Morning, properties including the Grand Oriental Hotel (GOH), the York Building, the Gaffoor Building, the General Post Office, the Cey Nor Seafood Restaurant near the Lotus Tower, the Water’s Edge mixed development, Hilton Colombo, and the Grand Hyatt Colombo located in the vicinity of Colombo Port City, as well as the International Co-ordination Centre in Kankesanthurai in Jaffna, have already been earmarked for development purposes under Selendiva Investments.
The properties would be developed under three investment portfolios, namely “Heritage Square in Colombo Fort”, “Real Estate Development”, and “State-Owned Hospitality Sector”.
According to Sri Lanka Podujana Peramuna (SLPP) lawmaker Dr. Wijedasa Dr. Rajapakshe PC, any business investment can be incorporated by the Treasury and there was no issue in that, but when it comes to the lands, they are either vested in one of the government organisations or the State, which are called state lands – and the final authority with regard to state lands is vested with the President.
He went on to say that those lands come under the State Land Ordinance as well as the Land Development Ordinance, and in addition to that, there is also a Land Reform Commission, with some of the lands’ ownership vested with that Commission, meaning these lands can only be made use of within the framework of that statute.
“The President can make use of those lands only for legitimate purposes,” he said.
Dr. Rajapakshe explained when the Government is dealing with highly valuable lands such as the ones that have been earmarked for development by Selendiva Investment (Pvt.) Ltd, it is necessary to have some form of legitimacy for that company, and such legitimacy should be given by Parliament.
“The legislative power is not vested with the President, and he can only implement what is mandated by the Legislature, because the President is not part of the Legislature. He cannot go against the laws of the country. Unless there is a change of the law that has been enacted by the Legislature, the President has no authority to do it,” he added.
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"If we all want to retain 51% ownership, it is unlikely that a single investor will come and get a minority stake of a large property. And therefore, a more sensible thing is to take listings, so that a larger number of investors can participate. That is what Selendiva Investment was formed for" State Minister of Urban Development, Coast Conservation, Waste Disposal, and Public Sanitation Dr. Nalaka Godahewa [/caption]
Selendiva was formed in accordance with Cabinet approval granted on 4 March 2020 to form a state-owned property development company with the objective of transforming state-owned hospitality portfolios to their optimum performance level through appropriate restructuring.
The Treasury will hold full ownership of the company, and the state-owned Canwill Holdings (Pvt.) Ltd., the Hotel Developers (Lanka) Ltd., and the Grand Oriental Hotel have been vested with Selendiva Investments at present.
As per the Cabinet paper submitted by Prime Minister Mahinda Rajapaksa in his capacity as Minister of Urban Development and Housing and approved by the Cabinet of Ministers, an investment facilitation model based on a PPP has been planned by Selendiva Investments with a view to facilitating the identified state-owned institutions and investments, and under this, it has been identified to implement three investment portfolios – the Heritage Square in Colombo Fort, real estate development, and the state-owned hospitality sector.
Meanwhile, the United National Party (UNP) has urged the Government to publicly reveal the details regarding the operations of Selendiva Investments.
Saying that, as the constitutionally empowered body to oversee public finance, it is the prerogative of Parliament to approve the establishment of such an institution, the UNP asked the Government whether the relevant legislation regarding Selendiva Investments has been presented to Parliament for approval.
Furthermore, the UNP has questioned the Government as to what guidelines have been enforced to govern the operations of, and appointments to, this company. They reiterated that the sovereignty of Parliament has once again been threatened by the creation of such a company.
Similarly, the Janatha Vimukthi Peramuna (JVP) has also raised concerns, as they claimed that the lands in Colombo are being sold at a time when the Port City Bill has been passed and therefore, there is a connection between both of these moves.
JVP MP Vijitha Herath said by transferring the head office of the People’s Bank and clearing properties such as GOH and Hilton Hotel, as well as lands near the Beira Lake, and on D.R. Wijewardena Mawatha, they are trying to annex these lands to the Port City and allow Chinese companies to administer these areas at their own will.
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"The President can make use of those lands only for legitimate purposes. The legislative power is not vested with the President, and he can only implement what is mandated by the Legislature, because the President is not part of the Legislature. He cannot go against the laws of the country" Sri Lanka Podujana Peramuna lawmaker Dr. Wijedasa Rajapakshe PC[/caption]
“There is an ulterior motive behind this. That is why these are taking place. The Cabinet paper received approval on 17 May; on 18 May, Parliament received the court determination on the Port City Bill. It was debated on 19 May and passed on 20 May. These incidents are all linked,” he added.
Meanwhile, when contacted by The Sunday Morning, State Minister of Urban Development, Coast Conservation, Waste Disposal, and Public Sanitation Dr. Nalaka Godahewa said despite the UDA having powers to engage in investments of this nature, this particular proposal had been brought in with the purpose of taking the companies to the stock markets.
“For this, you need certain specialised know-how. That’s the idea of giving responsibility to Selendiva, which is also a 100% government-owned company,” he explained. However, the State Minister stressed that if there’s any legal requirement to take it to Parliament, that could also be done.
“That’s not an issue. What has been presented is a concept paper. Once the low performing assets are listed, there will be greater ownership of the public and participation of local and foreign investors, because we want to retain 51% ownership of all these assets. If we all want to retain 51% ownership, it is unlikely that a single investor will come and get a minority stake of a large property. And therefore, a more sensible thing is to take listings, so that a larger number of investors can participate. That is what Selendiva Investment was formed for,” Dr. Godahewa said.
He also reiterated that 100% ownership of this company is vested with the Treasury and most of the Treasury assets will be coming from the UDA.
“Right now, Selendiva is under the UDA and the co-ordination is done by UDA. But in the long run, since it’s a 100% owned company, it will be directly under the Treasury. It will be a matter of gazetting under a ministry,” he said.
When asked about the properties earmarked, the State Minister said initially, the aim was to develop several properties such as the Grand Hyatt and GOH, which have not generated money for a long period. However, the same concept can be extended to other properties as well.
“This is just one model. It is not a must that all projects should be handled by Selendiva,” he added.