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FSP decries questionable Kantale sugar factory deal
By Rathindra Kuruwita
The Frontline Socialist Party (FSP) and the Professionals’ National Front (PNF) yesterday condemned the proposal to hand over the Kantale Sugar Factory and 21,000 hectares of land that belongs to it to a Singapore-based company.
FSP Education Secretary, Pubudu Jayagoda said that the land would be leased for 30 years and that it was likely that the Cabinet would approve a questionable proposal submitted by Minister of Finance, Basil Rajapaksa, on 07 February 2022.
Jayagoda said that the factory had been established in 1960 with Czechoslovakian aid.
“At that time, Czechoslovakia was a socialist country. The factory was privatised in 1993, but even then, it was closed in 1999, it was producing 16,000 tons of sugar and 3.9 mil litres of alcohol.”
In 2015, the Yahapalanaya government tried to establish a company, MG Sugars Lanka Pvt. Ltd, with a Singapore-based company, SLI Developments Pte. Ltd, as a partner. The state was to hold 51% of the shares of the company.
A shareholders’ agreement was signed between MG Sugars, the Government of Sri Lanka and SLI Developments in 2016. SLI is connected to UK-based investors Mendel Gluck, Robert Salem and Moussa Salem.
“According to this agreement, the factory and nearby land were to be given to the company. Of the 21,000 hectares that belong to the factory, sugar cane was to be grown in 14,000 hectares and 7,000 were to be given to farmers. The water for the farming was to be taken from Kalu ganga, a tributary of the Mahaweli River,” Jayagoda said.
Gluck and the Salem brothers used K.P. Nagaraja, an Indian national to establish the business. There was a dispute between the investors and Nagaraja, and that resulted in a court case.
“In August 2019, August a Singaporean arbitration court said that there was a need to change the agreement. Subsequently, in July 2020, the Director Board was changed and a new agreement presented. On 09 August 2021, the Cabinet approved the new 30-year lease agreement. Earlier, on 05 August a MoU had been signed. However, this was different from the earlier agreement,” he said.
While under the previous agreement, the factory and nearby land was to be under the new company, the 2021 agreement had proposed to hand over the entire land to the company. Instead of taking water from Kalu Ganga, the water was to be taken from the Kantale tank.
“Although the government was to own 51% of the shares, Moussa Salem was to be the Chairman of MG Sugars. Gluck was to be the CEO. Thus, SLI would run all the operations. This will also mean that farmers in the area will face water shortages because Kantale Tank is an important source of water,” the FSP Education Secretary said.
The project to revive the Kanthale Factory is expected to cost USD 300 million, but SLI will only invest USD 70 million. However, according to the agreement 85% of the profits in the first 10 years will go to SLI. 75% of the profits in the second 10 years will go to SLI.
“The government will get 51% of the profits only in the third decade. Sri Lanka will make most of the investments but will make a pittance. This is a serious issue,” he said.
Meanwhile, Eng. Kapila Renuka Perera of the PNF said that this agreement would only lead to a monopoly, which will be disastrous for Sri Lankans. He added that given that all lands will be given to MG Sugars, Sri Lankan farmers will not be benefitted.
“The agreement also allows the company to import unpurified sugar, purify it here and re-export. This will be done with virtually no oversight. Previous governments too have come into agreements that lead to monopolies, like wheat, and these only had negative impacts on us. This will also have similar results. A few people will benefit at the country’s expense,” he said.
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Advisory for low pressure area over South-east Bay of Bengal Sea area
The Natural Hazards Early Warning Centre of the Department of Meteorology has issued an advisory at 11.30 pm on 05 January 2026 regarding a low pressure area over South-east Bay of Bengal Sea area.
The low-level atmospheric disturbance in the Bay of Bengal, to the southeast of the Sri Lanka has intensified into a low-pressure area.
Hence, showery condition over the island, particularly
in the Northern, North-Central, Eastern, Uva and Central provinces is expected to enhance from January 8th.
The Meteorological Department is constantly monitoring the behavior of the system.
The general public are requested to be attentive to the future forecasts and bulletins issued by the Department of Meteorology in this regards.
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US raid on Venezuela violation of UN Charter and intl. law: Govt.
Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath yesterday (05) told a media conference at his Ministry that the UN should deal with the US for violating international law.
Herath, who is also a senior member of the ruling National People’s Power (NPP) party’s National Executive Council, in addition to being a member of the JVP politburo, emphasised that member states couldn’t violate UN Charter and international laws.
The Minister said so when The Island sought the government’s position on the abduction of legally elected Venezuelan President Nicolás Maduro and his wife in a lightning raid carried out amidst heavy air strikes on that country. We raised the issue at hand pointing out that there were persistent allegations regarding US and Indian interventions in the 2022 regime change operation here and that the NPP finalised defence agreements with Washington and New Delhi.
Minister Herath said that Sri Lanka backed the ongoing UN Security Council bid to deal with the developing situation in Venezuela.
Herath was flanked by Deputy Foreign Minister Arun Hemachandra and Deputy Tourism Minister Prof. Ruwan Ranasinghe.
Minister Herath said that the UN Security Council was scheduled to take up this issue today. The US is one of the five members of the UN Security Council.
In terms of the UN Charter, UN members are to refrain from the “use of force” against the territorial integrity or political independence of any state. Another permanent member of the UN Security Council, France, broke ranks with the Western block to condemn US action. France unequivocally declared that the US operation was a “violation of sovereignty.
Minister Herath didn’t respond to the query whether he discussed the issue at hand with President Anura Kumara Dissanayake.
While pointing out that Sri Lanka had been subjected to foreign interventions, The Island sought the position the JVP in respect of US President Donald Trump threatening to move against Mexico, Cuba and Colombia as the party always took a strong stand against US actions. Declaring that his response would be for the government and not the JVP, Minister Herath said that there was a way to deal with situations through the UN.
Minister Herath strongly defended recently signed agreements with India and US pertaining to defence. Stressing that both agreements were beneficial, Minister Herath pointed out that they weren’t defence agreements but security cooperation arrangements.
The US and Sri Lanka signed a Defence Memorandum of Understanding (MoU) in November 2025, formalising defence cooperation under the State Partnership Programme (SPP) with the Montana National Guard. The MoU with India was signed in April, 2025. It was among seven MoUs.
Referring to devastating Cyclone Ditwah, the Minister said that India provided material support under the MoU signed in April whereas the US provided 10 helicopters to the SLAF recently.
Responding to a query on US-Sri Lanka tariff negotiations, Minister Herath said that about 95% of the negotiations have been finalised.
At the onset of the briefing, Minister Herath and Deputy Ministers Prof. Ranasinghe and Arun Hemachandra explained how the tourism sector and expatriate Sri Lanka work force contributed to the national economy.
Referring to Central Bank figures, they declared that tourism had brought in USD 3.2 bn whereas expatriate workers contributed USD 7.19 bn up to November last year. Once the Central Bank made available December figures it could reach USD 7.8 bn, they said. Tourism and expatriate work force together brought in as much as USD 11.6 bn, they declared, expressing hope 2026 would definitely be better.
Although the devastation caused by Cyclone Ditwah caused concerns that it may cause a significant drop in tourist arrivals, a steady flow of visitors paved the way for a comfortable 15% increase in arrivals by end of 2025, they said.
Minister Herath said that the government was happy that the country recorded the highest number of tourist arrivals this year.
By Shamindra Ferdinando
News
Ban on foreign research vessels: FM promises decision within two months
Foreign Minister Vijitha Herath yesterday said that the government would announce its decision on the ban on foreign research vessels entering Sri Lankan waters.
Addressing the media at the Foreign Ministry, Minister Herath, in response to a query, said that they were in the process of addressing the issue.
Former President Ranil Wickremesinghe declared a moratorium on the entry of foreign research vessels during 2004. Although the NPP government, in December, 2004, declared its position would be made known soon, the decision was not taken during last year. Wickremesinghe took that decision under intense Indian and US pressure to deny entry of Chinese research vessels (SF)
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