The Hon. (Dr.) Nalinda Jayatissa
On behalf of the Minister of Industry and Entrepreneurship Development, Dr. Nalinda Jayatissa detailed land use, production, sales, operational issues, and employee payment matters at the Pelwatte and Sevanagala sugar factories. He said Sevanagala’s 2025 output was affected by machinery failures, procurement delays, farmer protests, field burnings, VAT-related sales constraints, and cash-flow problems, while Pelwatte production proceeded as planned. He reported that EPF arrears at Sevanagala had been settled, Pelwatte arrears were being addressed through Cabinet-approved funding and the 2026 Budget, and monthly EPF/ETF payments had resumed on schedule from October 2025. He also stated that formal cadre approval, recruitment, promotion procedures, and placement on government salary scales for Lanka Sugar Company employees were being finalized.
Verbatim record (translated)
Machine-translated from Sinhala / Tamil / English¶ 01 Hon. Speaker, on behalf of the Minister of Industry and Entrepreneurship Development, I provide the following answers.
¶ 02 (a) (i) Land extents: - Pelwatte – 9,595 hectares - Sevanagala – 7,518 hectares
¶ 03 Breakdown: - Pelwatte: Total 9,595 ha; Sugarcane cultivation 8,791 ha; Balance 804 ha (other crops/unauthorized constructions). Legal action is being taken against unauthorized activities. - Sevanagala: Total 7,518 ha; Sugarcane cultivation 6,688 ha; Balance 830 ha (other crops/unauthorized constructions). Legal action is being taken against unauthorized activities.
¶ 04 (iii) Sevanagala: In 2025, due to a failure of one cutter motor and two furnaces, expected cane crushing reduced; protests by farmers resulted in nearly one month’s stoppage of sugar production. Ethanol sales declined, leading to some reduction in ethanol production in 2023–2025.
¶ 05 Pelwatte: In 2025, production proceeded as planned.
¶ 06 Both factories are currently stopped for post-Maha 2025 maintenance and are scheduled to resume mid-February 2026 for the Yala season.
¶ 07 (iv) Annual sugar production and sales (metric tons):
¶ 08 - 2020: Pelwatte production 23,582.15; sales 17,614. Sevanagala production 16,115; sales 13,851. - 2021: Pelwatte 30,381.20; 33,304. Sevanagala 17,796; 15,647. - 2022: Pelwatte 24,110.25; 23,217. Sevanagala 12,628; 14,632. - 2023: Pelwatte 28,076.65; 20,303. Sevanagala 13,784; 12,089. - 2024: Pelwatte 27,790.85; 15,415. Sevanagala 11,930; 9,901. - 2025: Pelwatte 27,361.05; 23,003. Sevanagala 8,091; 8,742.
¶ 09 (v) Sevanagala: In 2025, emergency breakdowns led to delays in receiving scheduled cane daily; continued farmer protests following deliberate field burnings caused an almost one‑month shutdown. After VAT was imposed in 2024, constraints in selling sugar and ethanol in adequate volumes worsened the institution’s cash flow, delaying procurement of spares and equipment needed for breakdowns and maintenance. As a result, crushing capacity fell below expectations and the 2025 cane intake target was not met.
¶ 10 (vi) Sevanagala: Of two cutter motors, one failed; international tenders were necessary for repair, causing delay and forcing operations with one motor under risky conditions, reducing capacity. Of four vacuum fans used daily, repairs to one were delayed because initially imported ERW pipes did not meet specifications, requiring retendering; this reduced daily crushing capacity (CBD), preventing planned cane intake.
¶ 11 Pelwatte: Cane procurement was not halted.
¶ 12 (vii) Employees’ payments: - Sevanagala: Employees’ Provident Fund (EPF) arrears of LKR 46.77 million for June–September 2025 have been settled; payments have been made properly from October 2025. - Pelwatte: EPF contributions are in arrears by LKR 370.5 million from December 2024 to September 2025. Employees’ Trust Fund (ETF) and EPF payments have been made on due dates since October 2025.
¶ 13 Out of the arrears, Cabinet Decision No. AMP/25/1673/804/202 of 2025.09.23 approved LKR 291 million for EPF settlement, and funds have been allocated in the 2026 Budget. Monthly EPF/ETF contributions are now paid on due dates from October 2025.
¶ 14 The Lanka Sugar Company (Pvt) Ltd (taken over on 11.11.2011) has nearly 5,000 staff, but a formal cadre and scheme of recruitment/ promotions approved by the Department of Management Services (DMS) has not been in place; hence they are not on government salary scales. This process is now at its final stage. Upon cadre approval, all employees can be placed on satisfactory government salary scales under circular provisions.
¶ 15 Recruitment has not been done through proper competitive procedures; internal recruitments and promotions have not systematically recognized merit and experience, as shown by studies and audit queries. With cadre approval, formal recruitment and promotion procedures are being finalized to ensure fair external/internal recruitment and promotions, thereby safeguarding workers’ rights.
¶ 16 Actions underway will be completed within a short period, establishing a satisfactory work environment and protecting employee rights.
¶ 17 Through state intervention and 2026 Budget provisions, outstanding statutory benefits referred to in (vi) are being addressed.
¶ 18 A process is underway, together with all sugar producers, to set stable administered selling prices for sugar and ethanol.
¶ 19 (b) Not applicable.
Provenance
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- Hansard, Friday, 23 January 2026 ·No. 23290 ·English daily/uncorrected Hansard
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Cite as: The Hon. (Dr.) Nalinda Jayatissa. 10th Parliament, Parliament of Sri Lanka. Hansard, 23 January 2026. No. 23290. Politick, https://staging.politick.io/lk/speeches/14304