Promoting transparency

The increasing need for the government to be more transparent in their transactions has been highlighted by a number of stakeholders. Last week the International Monetary Fund (IMF) noted that the government needs to focus more on transparency so that investors – both internal and external would be encouraged to do business in Sri Lanka.

They recommend that the government gazettes major transactions in parliament and that tender procedures are made more transparent. This is in addition to the more obvious points of reducing red tape and restructuring the Board of Investment so that setting up a business becomes faster. It is also necessary for the public officials, especially politicians and top level decision makers take steps to be more open about the transactions done with State assets.

The UNP has also pointed out that the government has at times failed to follow the laws enshrined in the Constitution stipulating that public monies are under the guardianship of parliament. The party has pointed out that transaction concerning the 20 acre plot of land at Galle Face insisting that it was not tabled in parliament. They have also alleged that the government may have sold the land outright, which is not legal since land can only be leased for a maximum of 99 year and not sold outright.

Another concern is that if the money is not recorded in the State accounts then the method by which it is spent will also not be available to the public. Given that the Shangri-la investment is in the range of US$ 500 million and the fact that there are many other investments that the government is planning, not being transparent and accountable will become a habit – if it hasn’t already.

To top matters off the weekend newspaper reported that the Ceylon Petroleum Corporation’s (CPC) recent long term contract with the Singapore unit of UAE’s Emirates National Oil Company (ENOC) for the supply of gas oil has stirred a controversy. The reason for this according to the newspaper was that it is the first time in the history of the CPC that it has awarded an oil supply contract without calling for tenders, CPC trade union officials said.

They alleged that the CPC has failed to consult the Cabinet Appointed Procurement Committee (CAPC) and Technical Evaluation Committee (TEC) before awarding the contract to ENOC claiming that it was a “systematic, institutionalised” fraud. The normal procedure is to call for tenders from 10 to 15 registered international oil suppliers out of 50 registered companies with the CPC for the spot or long term oil supply tender.

The CPC was in the practice of following international competitive bidding processes for the procurement of petroleum products and this deal was a deviation from this practice, they alleged.  The relevant officials have explained the point saying that the transaction was done between two State companies and therefore does not require tender procedure but is a case in point of the problems that the system is plagued with.

It reinforces the point that the government must take steps to make investment transparent so that people are aware of what is being sold and how the money is being spent. The point of development is to alleviate poverty and ensure that the money gained through investment is funneled to the right projects.