The Board of Investment (BoI) will continue to issue licences during the run-up to the upcoming Budget-2011 despite rumoured otherwise.
It is highly speculated that following the budget, concessions under BoI Act will be strictly limited for thrust sectors or other strategic investments over RS. 500 million.
However, under the provisions of the BoI Act, the government is restricted in retracting concessions already awarded, high ranking official told The Bottom line. It is highly speculated that following the budget, concessions under BoI Act will be strictly limited for thrust sectors or other strategic investments over RS. 500 million.
“A crucial meeting was held on Thursday, where it was informed that under regulations relating to BoI, it cannot withdraw concessions nor hold back approvals. The Act is designed to protect investors and their investments from ad-hoc policy decisions. Investors can take legal action if the BoI contravenes these regulations,” he said.
Foreign investments in the country are safeguarded by Investment Protection Agreements (IPAs) signed with 20 odd countries. Sri Lanka’s constitution guarantees the safety of FDIs through these IPAs while Sri Lanka is a founder member of the Multilateral Investment Guarantee Agency (MIGA).
Furthermore, according to Article 157 of the 1978 Constitution, BoI agreements enjoy the force of law while no legislative, executive or administrative action can be taken to contravene the provisions of a bilateral investment agreement otherwise than in the interests of national security, it is leant.
“It was also mentioned that BoI was the only other than the Mahaweli Authority Act, powerful enough to safeguard such contractual interests,”
Asked how budget proposals will be applicable, he said that BoI cannot hold back projects once approved.
“If an investor starts a project either under Section 16 or 17 of the BoI Act, he has to be accorded terms and conditions which are effective on that particular date,”
Recently, issuing a statement, it refuted the notion that the “Board of Investment (BoI) had suspended the acceptance of investment applications for new projects pending the 2011 Budget” and scoffed at “speculation surrounding the continuance of BoI concessions granted”.
“BoI continues to entertain and accept new applications for investments. Priority has however, been given to the processing of investment applications to the thrust sectors that have been identified, namely tourism, agriculture, fisheries and dairy, education and training, IT & BPO, infrastructure and port and aviation related development.”
Reaffirming The Bottom Line lead story carried a fortnight ago, BoI said that the “current emphasis has also been on attracting high value investments in keeping in line with the evolving strategy for investment promotion arising from the newer opportunities of the country with the return of peace and stability.”
“The BoI reassures all investors that all contractual obligations entered with the Board of Investment will continue to be honoured.”
Economic Development Minister Basil Rajapaksa has meanwhile, ordered a complete revamp of BoI and the updating of the country’s investment laws and regulations, starting with the BoI Act.
Many from the Presidential Commission on Tax to Asian Development Bank (ADB), have been calling for the rationalisation of BoI’s concessions regime while the investor community at large had been advocating a ‘one-stop-shop’ for investors.
Although Sri Lanka had an ambitious target of US $1 billion FDIs for 2010, BoI saw only US $ 208 million flowing into the country during the first six months of 2010. (SF)
Recently, issuing a statement, it refuted the notion that the “Board of Investment (BoI) had suspended the acceptance of investment applications for new projects pending the 2011 Budget” and scoffed at “speculation surrounding the continuance of BoI concessions granted”.
“BoI continues to entertain and accept new applications for investments. Priority has however, been given to the processing of investment applications to the thrust sectors that have been identified, namely tourism, agriculture, fisheries and dairy, education and training, IT & BPO, infrastructure and port and aviation related development.”
Reaffirming The Bottom Line lead story carried a fortnight ago, BoI said that the “current emphasis has also been on attracting high value investments in keeping in line with the evolving strategy for investment promotion arising from the newer opportunities of the country with the return of peace and stability.”
“The BoI reassures all investors that all contractual obligations entered with the Board of Investment will continue to be honoured.”
Economic Development Minister Basil Rajapaksa has meanwhile, ordered a complete revamp of BoI and the updating of the country’s investment laws and regulations, starting with the BoI Act.
Many from the Presidential Commission on Tax to Asian Development Bank (ADB), have been calling for the rationalisation of BoI’s concessions regime while the investor community at large had been advocating a ‘one-stop-shop’ for investors.
Although Sri Lanka had an ambitious target of US $1 billion FDIs for 2010, BoI saw only US $ 208 million flowing into the country during the first six months of 2010. (SF)
