Thursday, 7 August 2014 00:13
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Reports released by the Committee on Public Enterprises (CoPE) always make for interesting, if rather dismal, reading. The latest report is no different with a staggering $ 75.28 million loss from the controversial hedging deals stealing pride of place. Other instances of corruption and wastage litter the pages with many ideas for “get rich quick schemes” for contractors and other influential hangers-on of the Government.
COPE reports can only be acted on by the President and the Cabinet. With such large issues openly traceable is it is a severe indictment of Sri Lanka’s legal system that not one official has been punished in a court of law.
Despite repeated appeals, neither the CID nor the Bribery Commission has seriously investigated and punished the numerous offenders cited in successive reports. These deals have gained traction, more due to political reasons than ethical ones. Many other irregular transactions such as BOI approval of the Hyatt Regency investment that is strongly backed by the Rajapaksas remain in the shadows.
In its latest instalment, COPE investigated 47 institutions in 18 strategic enterprises making profits and 29 non-profit makers. But the big bleeders such as the Ceylon Petroleum Corporation (CPC) continue. Other than the hedging deals it incurred an estimated loss of Rs. 8.3 billion in the procurement of petroleum products during the period 1 June 2011 to 30 June 2012 due to inefficiencies such as delays in laboratory tests, lack of coherent communication and preparedness to meet the challenges of a volatile market, overpayments, delays in planning orders for procurement of petroleum products and uneconomical blending of high and low octane petrol.
The Ceylon Petroleum Corporation had overpaid $ 2,060,842 to a foreign UAE company due a faulty agreement. Sri Lanka Telecom had purchased 75% of shares of a shell company named Sky Network Ltd. for Rs. 108 million, which had then gone defunct. Elsewhere endless instances of botched tender proceedings, illegal advancements and false deals give a glimpse into the massive depth of corruption within public institutions.
Other companies such as Mihin Lanka continue to make massive losses as well, leaving the Government to make hollow comments on turning around smaller enterprises. Even though the bulk of public companies now send their accounts to the Auditor General the exhaustive number of frauds detailed in the CoPE report suggests that the Auditor General is overwhelmed by the sheer magnitude of financial misappropriation and does not have the resources to tackle these issues in a timely manner.
Most of the top officials in these organisations are political appointees and will likely never be denounced by the Government. Even the signatories of the hedging deals have not had any legal action taken against them, leaving no hope for the other offenders. The political crony system triumphs over all that is good and right for the country.
COPE needs to question Budget allocations given to companies that are repeatedly making losses and establish a mechanism that makes top officials directly culpable for mismanagement of public finance. At the very least it should ensure that a performance-based pay structure is implemented for the Board of Directors and other top appointees. Without political will from the top to stamp out corruption COPE reports will continue to be talked over and forgotten in quick succession.
