Correcting excesses

Mistakes can be written off easily, especially when they are excesses by public institutions. It was revealed on Tuesday that the Trade Ministry is considering appealing to the President to write off Rs.1.8 billion in debt while the Sri Lanka Ports Authority is spending Rs.4.1 billion to retire excess labour in the organisation through a Voluntary Retirement Scheme (VRS).

The Cooperatives and State trade mechanisms have incurred this debt through mismanagement and inefficiency. Even though the Ministry is planning on upgrading its existing Cooperatives network and introducing a fine system to catch errant employees, the confidence that it will bring the Cooperatives to a profitable level is lacklustre at best.

On the other hand, appointment of political lackeys by successive governments has burdened the Sri Lanka Ports Authority (SLPA) with large amounts of excess labour. In an effort to cut the slack and enable SLPA to reach higher levels of efficiency, the organisation has decided to give a VRS to around 2,000 employees. From the budgeted Rs. 4.1 billion, around Rs. 891 million has already been paid to a selected applicant base of 550 as at 31 May 2011.

The organisation hopes to recover the monies within 19 months by way of savings in salaries of the employees who will leave. The human resource bill of the company amounts to 55% of the total revenue and is valued at approximately Rs. 12 billion per annum. So far the SLPA has received 2,398 applications for the VRS even though the authority’s initial expectation was a response of 2,000 applications.

Both these instances show the level of blatant mismanagement of resources in State departments. The Cooperatives movement was established as a mechanism to balance private trade so that some measure of consumer protection would be assured. They also have the responsibility to ensure that the producers get a fair deal and prevent them from being exploited by private traders. Cooperatives also serve receivers of State handouts such as Samurdhi. Their mandate is to provide high quality products at a reasonable price so that there is a balance to the traditional private trade.

At a time when the cost of living is ever-increasing, especially the costs of basic necessities such as food, the cooperatives have an important role to play in the national economy. Inconsistent service, limited branches and lack of product variety are some of the main criticisms levelled against the Cooperatives, but few would argue with the fact that if managed properly they would serve the masses well.

Sri Lanka has set sights on becoming a shipment hub in South Asia. However, if the current harbours are not managed well, there is little hope for the new ports. Development can happen inside-out so that good governance, professionalism and efficiency triumph. The SLPA move to reduce its excess employees even at the cost of Rs. 4.1 billion should be applauded, since it has clearly set its goals right.

Recently the Government announced plans to end telegraph services within the country. While this is ending a long tradition, in the age of mobiles and email, it is clear that telegraphs have lost their allure. Even though the Postal Department is run at a loss, the effort made to acknowledge the need to change is important. It would be even more impressive if they along with other State organisations focus on efficiency and productivity so that public money can be optimised.