Charles Haviland Sri Lanka Correspondent

The authorities say the businesses in question are under-performing. But their critics say the move is arbitrary and will be greatly offputting to potential foreign and local investors in Sri Lanka.

State media have made little mention of the bill on Revival of Under-Performing Enterprises and Under-Utilised Assets.

36 businesses at risk

But it’s to be put to parliament next week and will enable the government to nationalise 36 businesses that it says are not doing well enough.

They include the holding company of the Hilton, one of Colombo’s most prestigious hotels, and other companies owning a good quantity of prime city land.

At least one of the companies is owned by an opposition politician. Buddhist monks are usually reliable supporters of the government.

But at least two monks, as well as opposition MPs and a retired business executive, say they fear the government wants to seize assets from its opponents and award its cronies, and open the door to further renationalisations in future.

Renationalisation

One monk said the move was against Buddhist teachings and had induced fear in the business community.

Reports say the bill has been drafted in secret and already approved by the Supreme Court after being put through the cabinet as a matter of urgency.

The government says the bill is necessary because the underperforming companies are having an adverse impact on the national economy and thereby on “the public interest”.

From the 1950s onwards governments of Sri Lanka engaged in extensive nationalisation programmes.

Some reversed the trend but the current government of President Mahinda Rajapaksa has halted privatisations and last year renationalised the Sri Lankan arm of the Shell petroleum company. Yet most state enterprises are running at a loss.