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Wednesday, 6 August 2014 01:35 - - {{hitsCtrl.values.hits}}
By Ashwin Hemmathagama
Our Lobby Correspondent
The Committee on Public Enterprises (CoPE) has succeeded in turning around a majority of the state institutions “known to have failed in meeting all standards and regulations” by forcing them to fall in line with accounting policies and adopting good governance, Parliament was told yesterday.
According to the Interim Report containing the findings of investigations conducted by CoPE during the period from 8 October 2013 till 8 April 2014 and presented in Parliament, most of the identified institutions had “improved appreciably”.
According to CoPE Chairman, Minister of Human Resources Dew Gunasekara: “Except for a few, most of institutions have now become accustomed to submitting their financial statements to the Auditor General and Parliament well on time, which is encouraging.” The report tabled yesterday investigated 47 institutions in 18 strategic enterprises making profits and 29 non-profit makers.
“Though it was originally intended to table quarterly reports, it was not practically possible to do so due to a variety of technical factors. However, the committee intends to table another Interim Report in September this year, before the Final Report, which will be presented in December 2014. The presentation of Interim Reports provides an opportunity for members to study the findings of COPE in respect of those already examined, without waiting for the final report. This report also enables the Chief Accounting Officers and the respective Heads of Institutions to acquaint themselves with COPE’s observations and recommendations sooner than later for necessary follow-up action,” confirmed Minister Gunasekara.
Moving on with the progress, Minister Gunasekara stated that a separate committee has been appointed for evaluation and the follow-up of the directives issued by CoPE. “The Committee comprises of UNP MP Eran Wickremaratne, UPFA MP Prof. Rajiva Wijesinhe and Minister of Disaster Management Mahinda Amaraweera. This committee looks into the effective establishment of the recommendations the CoPE issued,” said Minister Gunasekara.
According to MP Eran Wickremaratne most of the CoPE finding needs both Executive and Cabinet decisions for effective establishment. “Qualifications should be verified when making appointments to high posts. Good governance is necessary to increase efficiency. Out of 47 institutions, only seven establishments lack qualified audit opinions. We have already finished working on 30 organisations, which will be included in the next CoPE report due in September this year. CoPE cannot execute the recommendations. The execution will fall upon the executive and the Cabinet,” said Wickremaratne.
In the interim report CoPE has listed several transactions involved with a significant monitory value raising more concern on the transparency of the process took place.
The Ceylon Petroleum Corporation had 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, uneconomical blending of high and low octane petrol, etc.
The Ceylon Petroleum Corporation had overpaid $ 2,060,842 to a foreign UAE company due to the inclusion of the premium of $ 54 twice in the agreement entered into with the said company to procure fuel.
Even though Sri Lanka Telecom had purchased 75% of shares of the Sky Network Ltd. for Rs. 108 million to obtain the frequency required for the continuation of service related to WiMax technology, the company had been closed down after a couple of years with no adequate business activities done on the ground and the technology becoming obsolete. The transaction looks suspicious as the said company, which had been formed in 2006, had carried out no business activities other than retaining a frequency until it was purchased by SLT in 2008.
It was also revealed that Rs. 10,468,000 had been paid as director’s fees during the period in which the company did not function and the person who had been paid as such had happened to be a director in Sky Network Ltd.
Land belonging to the State Plantation Corporation on Gregory’s Road, which was once mortgaged to the Bank of Ceylon for Rs. 50 million, had later been sold to a private company by the corporation for Rs. 243 million subject to certain conditions related to the redemption of the mortgage. However, the SPC has received only Rs. 11.9 million in respect of this transaction.
Rs. 19,483,222 had been overpaid to a contractor by the Central Environmental Authority in its Solid Waste Management Project implemented in Dompe as the tender had been offered to the 6th highest bidder neglecting the justifications of the lower bidders. Further, a loss of Rs. 30,140,320 had been caused to the authority as a result of paying Rs. 295 per cubic metre without charging Rs. 45 from the contractor for the removal of 88,648 cubic metres of earth.
A proper investigation had not been carried out by the Central Environmental Authority when issuing the environmental certificate to a glove manufacturing factory in Rathupaswala and the certificate had been issued by testing only the water samples provided by the factory owner.
Due to the premature vacation of the building used as the premises for the head quarters of the Social Security Board, it had to pay Rs. 5,090,906 as rent for the remaining seven months. Later, as permanent premises with adequate space had not been sourced to locate the offices, the institution had purchased a building in Rajagiriya for Rs. 195 million, although a Government Valuer had valued it for Rs. 165 million.
