Road rage

• Govt. and Rajapaksa trade accusations over Rs. 28 b missing from NSB loan
• Highways Ministry insists numbers don’t add up on explanation
• Harsha wants response of former President and says financial regulations broken

By Uditha Jayasinghe

In an attempt to put financial regulations back on track, the Government yesterday insisted former President Mahinda Rajapaksa has to clarify the fate of estimated Rs. 28 billion taken for road development projects from National Savings Bank (NSB).

Both the Investment and Highways Ministry and Policy Planning and Economic Development Deputy Minister Dr. Harsha de Silva highlighted the need for a clear and concise explanation as to how the funds were used and insisted a statement issued by former President Mahinda Rajapaksa over the weekend did not provide sufficient explanation.

Issuing its own statement, the Highways Ministry yesterday recalled that in 2014 the Rajapaksa-headed Ministry of Ports and Highways obtained an out-of-budget loan from several local banks amounting to Rs. 151 billion for 28 road projects. The National Savings Bank (NSB) was one such bank which extended a loan of Rs. 55 billion to the Ministry of Ports and Highways.

“The Road Development Authority (RDA) drew out an advance of Rs. 28 billion from the NSB’s Rs. 55 billion loan. Approval for this drawdown was based on falsified progress reports produced by the RDA related to the bank-funded road projects,” the statement noted.

It insists the RDA lent Rs. 3.7 billion to the Ministry of Ports and Highways for the repayment of outstanding bills and such a move is in defiance of financial regulations which state that the RDA cannot lend money to the Ministry.

The Highways Ministry in its statement also countered Rajapaksa’s stance that the Rs. 28 billion was used to meet the local component of foreign-funded projects by development agencies and was to have been repaid to NSB by the last Budget presented by the former President.

“A further Rs. 18.1 billion was used to repay local segments of several foreign-funded projects. However, financial records indicate that only Rs. 6.14 billion was required for repayment. The balance funds have remained unaccounted for.

“The road projects which are being funded by these local bank loans were awarded following unsolicited tenders. Due to the misuse of funds during the previous regime, many contractors have been unable to continue their work on road projects due to unavailability of funds,” the Highways Ministry said.  

Dr. De Silva told reporters the latest allegation of fund misappropriation was not an attempt to “sling mud” but an endeavour to understand what happened to the money.

“The NSB is the only bank in the country covered by a Government guarantee. The State is responsible for these funds and this issue must be resolved for the sake of every accountholder. No one can obtain funds from a bank and then use them for other purposes,” he emphasised.

The Deputy Minister also backed Prime Minister Ranil Wickremesinghe’s initial statement and reiterated Rajapaksa’s explanations were inadequate. When questioned over possible investigations into the issue, Dr. De Silva stressed the focus at the moment was to obtain a clear response from the former President but did not rule out a probe.