02/12/2002 - Daily News
Govt invites EoI to manage off-line lotteries: 12 bids received
Rs. 3 billion upfront fee in restructuring NLB

(by Ravi Ladduwahetty)




The Government has invited Expressions of Interest (EoI) from the private sector to manage its off-line lotteries in a bid to restructure the National Lotteries Board (NLB), official sources told the Daily News yesterday.  This will also mean that the private sector lottery operator will have to pay the Government an upfront fee of Rs. 3 billion.

By this a private sector lottery operator with a proven track record in the management of lotteries will be selected to manage the off-line lotteries which will be aimed at bringing in desirable changes in its level of operations to maximise the revenue from lotteries, the sources said.

The Public Enterprises Reforms Commission (PERC) has already received nine bids from local  and foreign operators for this venture.

The National Lotteries Board will enter into a management contract with the private sector operator for seven years and the latter will be required to pay an upfront fee which will be around Rs. 3 billion.  This is the method of reaping the profits in advance, NLB Chairman Imtiaz Ismail told the Daily News yesterday.

The Government plans to operate on a profit-sharing basis with the private operator.

Currently, the National Lotteries Board has an islandwide distribution network of sales agents and the NLB will continue to make contributions to the Consolidated Fund from the proceeds realised from the sale of lottery tickets, he said.

The Government will also fortify the regulatory environment and set up an independent regulator to monitor the activities of Lottery Operators.

Until a regulatory body is  set up, the Ministry of  Finance which is empowered by law will regulate all the activities under the supervision of the NLD Board of  Directors.

The advantages accruing to investors will be that this is the first instance where a private sector lottery operator will manage the lotteries business in Sri Lanka.  The Lotteries Operations business in Sri Lanka was hitherto a state-owned monopoly between the NLB and the Development Lotteries Board.

The prospective investor will also have the advantage of the popularity that the NLB has enjoyed as a market leader and customer loyalty among the public of the country thus placing it in a strategically advantageous position.

The prospective investor will be able to avail himself of the current NLB infrastructure and will have access to an already established countrywide distribution network.

No official of the Ministry of Economic Reforms Science and Technology of the Public Enterprises Reforms Commission was available for comment.  Director General Deepal Gunaratne was reportedly out of the country, a spokesman for the Public Enterprises Reforms Commission said.