More corrupt deals revealed

The Ceylon Petroleum Corporation (CPC), the National Paper Company Limited (NPCL) and SriLankan Airlines Limited had suffered a loss of Rs. 40 billion last year, according to the Second Interim Report released to Parliament by the Committee on Public Enterprises (COPE) yesterday.

The CPC loss amounted to Rs. 7,732,818,000 while the NPCL and Sri Lankan Airlines Limited incurred losses to the tune of Rs. 109,684,000 and Rs 32,357,980,000 respectively, said the report of COPE tabled in Parliament by its Chairman Senior Minister DEW Gunasekara.

Presenting the report Minister Gunasekara said that it covered the committee’s probes on 46 institutions. “During the course of the First Session of the Seventh Parliament, commencing from June 2010, COPE has been able to examine the audited accounts relating to all institutions coming under COPE thrice within a period of four years. This is an unprecedented record in the history of our legislature,” he said.

Senior Minister Gunasekera said that COPE was of the view that provisions should be made available to stop the re-appointment of chairmen and the members of the board of directors of the institutions which have received adverse audit opinion for three consecutive years. COPE had recommended the removal of the top management of the State Printing Corporation and the National Paper Company Limited to which the government had responded favourably, he said.

The report revealed that the entire procurement process in relation to the grant of local television broadcast rights by the Sri Lanka Cricket in 2010 had not been transparent.

The tender notice had not been given an adequate publicity; only a small advertisement had been inserted in a newspaper. “Going by the design of the advertisement it is doubtful whether the attention of the interested parties was drawn to it. Sufficient time had not been given to respond to the tender notice. Only one bid had been received in response to the tender notice. No clauses had been entered in the agreement in relation to a bid bond and delayed payments.” The fact that the Secretary of Sri Lanka Cricket is the Chief Executive Officer of the company which received the tender amounts to a clear conflict of interest, the report says.

Under the subheading of Major Transactions with inadequate accountability, the report observes: “In spite of the initial estimate of Rs 2.5 million, the tender related to the refurbishment of 13 hotel rooms in the Samudra Hotel, had been awarded by the Sri Lanka Institute of Tourism and Hotel Management for Rs 3.9 million per room. However, the selected contractor had failed to perform the refurbishment up to the standards and the final payment had been made ignoring the audit observations.”

“Even though a stock distributor in Anuradhapura had been responsible for the misplacement of 5000 MT of fertilizer valued at Rs 388 million (without subsidy), given by the Colombo Fertilizer Company Ltd,. To be distributed among the farmers under the fertilizer subsidy scheme, the investigations into the fraud, taken place in 2008, had not been completed even by 2014. It was further observed that no agreement had been entered into when handing over the fertilizer stock to the particular centre which had been registered only as an NGO.

“The monopoly of selling soft drinks at Galle Face Green had been acquired by a trade union of the Sri Lanka Ports Authority by getting registered as a private company and later, it had been sold to an external company for Rs 5.5 million without obtaining the approval of the Authority.

“The National Paper Company Ltd had received only Rs 16 million for a stock of scrap iron worth of around Rs 40 million, sold in the year 2012 and a significant number of dishonoured cheques had also been obtained in respect of this transaction.

“Although construction work of the Oluvil Port had been completed by spending Rs 6,780 million received from the DANIDA Agency of the Denmark and Rs 444 million of the Sri Lanka Ports Authority, its operations had not commenced even as at the date of the examination held on 04.06.2014. Further, it has been revealed that the Port can accommodate only smaller vessels due to its low depth of around 9 meters.

“Rs 391 million, spent on the improvement of the efficiency of the Colombo Port, had become futile as the project, funded by the Asian Development Bank, had been abandoned since the Government policies had changed later.

“Rs 54,889,800 had been paid as fines by the State Printing Corporation in the years 2010 and 2011 for not handing over the printed books at the specified dates, and not printing the text books in accordance with the relevant specifications.

“Rs 1,494,543 had been made as the initial payment for the construction of an administration building for the University of Sabaragamuwa. Due to a legal issue, no construction had commenced as at the date of the examination held on 05.06.2014, even though the cabinet approval had been received in 2007.

“The contract for the construction of the Arch Bridge of Pussellawa-Ulapane road had been awarded by the Road Development Authority in 1999 at the estimated cost of Rs 42 million. Since the construction work had stopped by 2003 after spending Rs 34 million, the contract had been re-awarded to the State Development and Construction Corporation to complete the rest of the work at Rs 75 million on condition that it should be completed before 18.06.2009. However, the construction work had not been completed even by 31.12.2013.”

(Courtesy: The Island)