• Privatisation talks with Indian investors halted by new Govt. policy
• Restructuring plans for NLDB, Milco were underway to address inefficiencies
• Ministry reviews legal standing after policy reversal on privatisation efforts

The proposed privatisation of the National Livestock Development Board (NLDB) and Milco Ltd. has been abandoned by the new Government, the Ministry of Agriculture reveals.

Speaking to The Sunday Morning Business, Agriculture, Lands, Livestock, Irrigation, Fisheries, and Aquatic Resources Ministry Secretary M.P.N.M. Wickramasinghe revealed that the divestiture of the Government’s stake in the NLDB and Milco attempted by the previous Government was unlikely to proceed any further.

He further revealed that discussions between the Sri Lankan Government and proposed Indian investors had progressed significantly prior to the policy reversal.

He added: “Currently, we are reviewing the extent to which talks had proceeded in order to determine whether we are legally bound to proceed with this.”

However, he also noted that, as far as he was aware, the Government was not legally bound to continue with this process any further and that therefore, it was very unlikely that the NLDB and Milco would be privatised.

Commenting further, he stated that while plans to privatise the NLDB and Milco would be abandoned, they intended to restructure both organisations to address the existing issues and inefficiencies. 

Accordingly, he revealed that they were currently studying how this restructuring would be implemented and that therefore it was too early to provide any specifics in that regard.

In September 2023, the Cabinet of Ministers approved a joint Cabinet memorandum granting approval to commence the valuation process of the NLDB and Milco as part of the process of divesting the Government’s stake in the two institutions to a proposed Joint Venture (JV). 

This JV comprised the National Dairy Development Board (NDDB) of India, Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), and Cargills (Ceylon) PLC. 

Accordingly, in terms of the joint Cabinet memorandum, the respective boards of the two entities were instructed to refrain from making any key decisions in respect of their immovable and movable assets and the respective staff, going forward.

It was further revealed that the Government of Sri Lanka intended to retain a golden share without rights for dividends or liabilities, and the partners of the JV company had proved amicable to this proposal, provided that the golden shareholder had no control over the company’s affairs.

As per the proposals made by the JV company, it was expected to invest $ 35 million in the two entities over the next 10 years.