Audit report exposes glaring malpractices in leasing of private building to Agriculture Ministry

• Building leased under former ‘Yahapalanaya’ Govt. 
• AG report says agreement lacked transparency and violated Govt. procurement guidelines
• Around Rs. 1,524.44 m spent in Govt. funds acquired through supplementary estimate
• Monthly rent of Rs. 21 m paid by including service charge of Rs. 6 million by exceeding Govt. valuation of Rs. 13.5 m
• AG recommends formal inquiry be held into leasing of building
• D.P.J Tower constructed in violation of conditions stipulated by UDA with three additional floors

By Chandani Kirinde

The Auditor General (AG) has recommended that a formal inquiry be undertaken by relevant authorities with regards to the leasing of a private building to house the Agriculture Ministry by the previous Government, with about Rs. 1,524.44 million in Government funds spend without transparency and in contravention to the procurement guidelines while exceeding the valuation of the Government Assessor.

A Special Audit Report which looked into the leasing of a private building in Rajagiriya to the Ministry of Agriculture said that the old building named ‘Govijana Mandiraya’ was vacated to house newly-established Parliamentary Oversight Committees, but even by the end of 2019 the building was not used   for this purpose and was lying idle while the Government was paying an exorbitant rent of Rs. 21 million a month for a privately-leased building.

The AG’s report said the last Government had agreed to pay a rental of Rs. 21 million, including a service charge of Rs. 6 million by exceeding Rs. 13.5 million, which was the monthly market rental, according to the valuation of the Chief Valuer of the Government.

The new Government decided to move the Agriculture Ministry back to its old premises in December and is in negotiation with the owners of the building as the lease agreement is valid until July 2021.

The building named the DPJ Tower was leased after then-Prime Minister Ranil Wickremesinghe presented a Cabinet Memorandum in February 2016 and Cabinet approval was granted in March that year.

The AG report said that the leased building had been one planned to be used as a shopping complex and had been constructed in violation of the approval granted by the Western Provincial Director of the Urban Development Authority, which stipulated three conditions comprising the restriction of the number of floors to seven, a height of 30 meters to be maintained between floors and for a car park accommodating 59 vehicles to be constructed.

However, this building had been constructed with 10 stories, exceeding the approved height by 33 feet.

The report said that even though the building was leased, there were inadequate access facilities to the building and insufficient vehicle parking capacity as well as a lack of other basic facilities such as electricity, sanitary facilities, etc.

Since there was no need to obtain a new building for the Ministry of Agriculture at the time budgetary estimates for 2016 were prepared, budgetary provisions had not been allocated for the leasing out of the aforementioned building. Funds for the lease of the building had been withdrawn through a supplementary estimate in April 2016.

The report added that even though a Cabinet decision had been granted to conduct the activities of the relevant ministry in the Sethsiripaya building, the private building had nonetheless been leased without following the procedures of the procurement guidelines on the approval obtained for the Cabinet Memorandum submitted by the former Prime Minister, indicating that it had been inadequate.