The Sri Lankan government is seeking investors for a number of shuttered garment factories.

The government took over 37 enterprises in November through a new law called the Revival of Underperforming Enterprises and Underutilized Assets Act. Of these enterprises, the majority, (around 19) are out-of-business apparel and related factories located inside and outside free trade zones.

"These factories had been closed down for some time. But the government could not take them over because although the land was on lease from the government, the buildings and assets belonged to the companies," said Mr A Sukumaran, chairman of the JAAF, Sri Lanka's apparel industry representative body.

"Which is why the government had to pass a new law to take over these lands and properties," he said.

Mr Sukumaran says the owners of the properties will be compensated by the government after a valuation, and the properties will be put back in the market for new investors.

"The government is looking for new investors and will lease out the lands again. Interested parties can negotiate for the properties," said Mr Sukumaran. However, he added that the process is currently in its initial stages and may take some time to be finalised.

Last week the government appointed Competent Authorities (CAs) to oversee the enterprises it has taken over. A three-member compensation tribunal, under the chief government valuer, was also approved.