Extend leases now or risk future investments: PA warns govt.

The Planters’ Association made a strong call to the government to fast-track the extension of Regional Plantation Company (RPC) leases, warning that ongoing uncertainty could derail billions of rupees in long-term investment in the country's plantation sector.

- By NISHEL FERNANDO

PA Chairman Sunil Poholiyadde described the industry as being at a ‘critical juncture,’ noting that the current 53-year leases, signed in 1992, will expire in 2045.

He said the remaining 20-year window is insufficient to secure investor confidence for projects with long gestation periods.

“The confidence of the investor takes at least 15 years for a return on investment,” Poholiyadde said at the PAs 171st Annual General Meeting in Colombo on Friday.

“A tea crop has a productive life span of approximately 30 years, and rubber over 40 years. The decision on the extension of leases is essential right now. If you don't act, investor confidence will be lost.”

Highlighting the performance of RPCs since full privatisation in 1995, Poholiyadde contrasted it with the era of state management. He said plantations recorded losses in 13 of the 20 years prior to 1992, requiring government subsidies equivalent to Rs.44 billion annually in today's value.