Mangala’s slap in the face on shipping industry monopoly! Featured
- - Nov 14, 2017
McLarens and Hayleys are leading a conspiracy to defeat the policy decision by the government to amend the laws to meet the demand for cargo handling and shipping industry, according to reports reaching Lanka News Web.
These two have built a shipping monopoly by using the political powers of the Rajapaksa regime, and the conspiracy is prompted by a fear of their possible loss of that domination.
The proposal to amend the laws was made through budget 2018 on November 09. On the following day, top officials of the two companies got together to launch their conspiracy.
Ministers aid the companies
According to reliable sources, they are planning to give money, foreign property and other gratifications to the politicians who would oppose the government proposal. They have already managed to lure two government figures, Susil Premajayantha and Anura Priyadarshana Yapa, who have promised to prepare the opinion within the government.
The two companies have also reached agreement and discussed a deal to build a public opinion against the relaxation of shipping affairs. A so-called leftist party has promised to show gratitude in lieu of the financial support it has already received.
At one discussion, a top company figure said that his company was prepared to pay any price to defeat the government if it tried to end their shipping monopoly. There are many companies involved in the local shipping industry, but McLarens and Hayleys account for around 70 per cent of the operations.
Links with the Rajapaksas
There has been a proposal for some time that shipping and cargo handling should be relaxed to suit the modern world needs, but these two companies spend generously to thwart that from happening. During the Rajapaksa regime, the two companies had gone to meet international shipping agents together with the Rajapaksa sons and influenced them to remove other local companies from the scene. While Hayleys used the Rajapaksa sons, McLarens dealt directly with the ex-president himself by obtaining membership of the presidential task force for policy regulation on shipping.
After the change of government on 08 January 2015, Hayleys started laundering the black money of the Rajapaksas through the casino businesses it owns. McLarens moved into build links with top figures in the new government.
Fate of Bandaranaike will befall
The company that used the Rajapaksa sons has boldly told cabinet ministers that the fate of the Bandaranaike would befall if attempts were made to end their monopoly. The other has reached the level of saying ‘let’s wait and see.’ McLarens owner Rohan Silva is a member of the Sri Lanka Telecom director board even today.
It is due to this reason that requests to relax restrictions on the shipping industry did not make any headway. No measure was taken to make the country Asia’s shipping hub. Not even a dialogue took place in the country due to the interventions of these two companies.
A company can become the local agent for a particular leading international shipping company, but no company can become the agent for several such international shipping companies. However, these two companies have satisfied the desires of the regional heads of international companies and become their local agents.
This is due to an outdated law in the local shipping industry, according to which the foreign ownership of shipping and cargo handling companies has been restricted to 40 per cent. Accordingly, any international company would need a local agent to operate here. Hayleys and McLarens are fighting for that 60 pc stake of the local agent position.
Premajayantha and Yapa are being used for this business mischief. A political party backing the two companies says opening up the industry to foreign companies will eliminate local agents and entrepreneurs, which will effectively lose jobs. But, knowingly or unknowingly, they are covering up the harm done to the local shipping industry due to that monopoly.
Therefore, the present status of the industry should be made clear. Hundreds of companies are registered as CASA, but only a handful of them are actually involved in the industry. Furthermore, the two big companies own most of the smaller companies, and are trying to seize the remaining 30 pc of the market for them.
If any confirmations are needed, what should be done is to find out the identities of those who are director board members of the local agents of international shipping companies. That much is enough. Our country is without shipping or cargo handling companies on a major scale. Under the monopoly of the two companies, the industry is stagnating.
The gratifications given by them include beds of star class hotels to bagfuls of dollars to international agents. We do have details of the identities of the hotels, what happens at those hotels and their links with the companies etc. But, we will not go into detail for the present. If this mischief expands, we are prepared to expose everything. We also possess information as to how McLarens and Hayleys built a monopoly, their deals with the Rajapaksas, how powers of the state were used to become agents and how they laundered the black money of the Rajapaksas.
Also, their deals with the present government figures and the persons being used as middlemen to influence the president and the prime minister can be exposed. They should understand that if they are to get any leniency, they will have to lessen their dirty work.
The issue that remains before the country is that the tendencies of the shipping and cargo handling industry towards relaxation do not tally with the country’s laws. For example, India, Pakistan, Singapore and Hong Kong have recognized 100 pc foreign ownership in the shipping industry. Leading international companies operate by using those countries as their headquarters.
Experiences of the region
Sri Lanka is strategically located in the Indian Ocean and that can be an advantage to be tapped by giving those companies the freedom to operate in this country freely. For example, India’s states differ in their tax percentages. It being a very big country, delays do occur in the transportation of cargo. If a major operations centre can be set up in this country, it will automatically turn into the shipping hub of Asia, as it will give the companies the opportunity to deal with a single tax range.
Relaxing the industry restrictions will also help the inflow of foreign exchange in dollars. Locals who work in those companies too, will be paid in dollars. The 2018 budget proposal considers all these and proposes to introduce an independent port regulator. If it becomes a reality, it will help this country to become a logistics hub inclusive of offshore businesses.
The laws are to be amended to remove restrictions that hinder the industry’s growth. Already, Maersk, the biggest shipping company in the world has welcomed the budget proposal, with its managing director for India, Sri Lanka and Maldives Steve Felder issuing a statement.
If the national aspiration to make Sri Lanka the shipping hub of Asia is to materialize, such big companies should use the country in a competitive atmosphere, and parallel to the expansion of their businesses, a method should be implemented to ensure that the direct tax income involved flows into the country. Had that been possible with the monopoly enjoyed by two companies, the industry would not have remained stagnant. Shadows of the Rajapaksas are behind all the talk about a so-called local shipping entrepreneurship and they raise a voice merely due to the gratifications they receive from the two companies, and not with the intention of making our country the shipping hub of Asia.