Thursday, 25 July 2013 00:27
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The inevitable has happened. The Committee on Public Enterprises (COPE) has released a damning report on the results of a corrupt and mismanaged Government system that has been allowed to lumber along for too long without any sort of financial accountability. So bad has the situation become that COPE Chairman called out President Mahinda Rajapaksa in Parliament to address COPE findings and recommendations because political will is the only antidote.
COPE Chairman, Senior Minister and veteran Leftist politician D.E.W. Gunesekera said massive losses were threatening the collapse of key State institutions, including the country’s electricity supplier and national carrier that could have a ripple effect on Sri Lanka’s banking system.
Hailing what he called a ‘historic’ report that had scrutinised the financial performance of 244 public enterprises in 2011, Gunasekera emphasised in Parliament that “the Executive should heed the findings and recommendations of the COPE report.” Whether the appeal will receive a reaction is anyone’s guess but it is an echo of requests that have been reverberating for years.
According to data published in the Annual Report of the Ministry of Finance and Planning, the operating losses of the CPC in just 2011 and 2012 have been close to Rs. 200 billion. SriLankan, another culprit, not only has losses of Rs. 19.6 billion in 2012 alone it is also about to rack up Rs. 315 billion in aircraft purchase expenses that will see the red in its ledger skyrocket. Mihin Lanka, since its inception five years ago by President Rajapaksa, has sucked up more than Rs. 8.5 billion in taxpayers’ money.
According to the data published in the Central Bank Annual Report 2012, six major public corporations have made operational losses amounting to Rs. 185 billion in 2012. The Ceylon Electricity Board (CEB) alone has not only lost billions of rupees but it is also the poster child on how an entire country can be weakened by wrong policies, corruption and utter disregard for accountability. Even as former Chairman’s names pop up in secret accounts in tax havens, the haemorrhage is allowed to continue.
According to Minister Gunasekera, having followed the recommendations given in the previous COPE report, nine public enterprises have managed to turn around and have started making profits and 38 institutions have increased their profits against the 12 institutions which started making losses. But clearly this is a drop in the debt ocean.
In his characteristically forthright manner, Gunasekera pointed out that political appointments to head State organisations were one of the main reasons for shocking ineptitude. A bloated public service that is crammed with political lackeys is another. It is not rocket science then to understand that the best way to bring these companies back to profit is to trim the fat and to hire professionals.
Professionals with decent pay are also needed to audit and maintain accounts. In a country where the Auditor General is probably the lowest paid in the world, the need for financial accountability obviously gets short shrift. The fact that COPE itself has little legal power to implement its recommendations proves the point. But this cannot be allowed to continue.
Political will is needed to turn public enterprises around but how can expectations flourish when the problem and solution are one and the same?
