COPE and COPA coping with corruption
The startling revelations of massive revenue losses to the Treasury, due to malpractices at State enterprises, banks and public institutions and departments, with obvious official connivance, negligence or indifference shocked the Nation.
Last week, at the Parliamentary Committee on Public Accounts (COPA), the officials revealed that the Government suffered a loss of around Rs 4 billion, due to a decision made by the Department of Registration of Motor Vehicles (RMV), to extend a contract given to a private company to manufacture smart driver’s licences.
It was further revealed that this private company had a contract for seven years, and after exceeding the contract period, the Department has given the company a two-year extension, resulting in a massive loss. The officers could not give any reason for giving such an extension to a private company, causing a huge loss to the Government.
The investigation found that the company had entered into a contract with the RMV and the contract ended in 2016. As per the provisions of the contract, the private company should have handed over its machinery used for the issuing of smart licences to the RMV, so that the Department could issue them on their own. However, the company, instead of handing over their machines, continued to obtain extensions. If the task had been carried out by the Department itself, it could have earned an average income of Rs 120 million a month.
Auditor General Chulantha Wickramaratne, who was also present at the COPA meeting, said the Department of Motor Traffic is wilfully avoiding State regulations. RMV officials admitted that the contract with the private company comes to an end at the end of this month, but they admitted no readiness by the Department, itself, to take over the task of issuing smart licences.
COPA Chairman MP Lasantha Alagiyawanna stated that as per the provisions of the new Audit Act, the Secretary of the Ministry of Transport and the Commissioner of the RMV would have to bear the responsibility for the loss incurred on government for not ending the contract in seven years.
Meanwhile, a study has revealed that State-Owned Enterprises (SOEs), which have cost the State mammoth amounts of funds over the past few decades, are victims of a patronage culture fostered by corrupt politicians. A report released by Colombo-based think tank Advocata quoted Finance Ministry Secretary Dr. R.H.S. Samaratunga as saying that successive Sri Lankan Governments have pumped a colossal Rs 1,150 billion into the upkeep of these SOEs up to 2017. This is money that could have been spent on developing schools and hospitals, as well as maintaining much-needed infrastructure.
The Committee on Public Enterprises (COPE) found out many irregular practices in the banking sector. Last Friday (6 September) the COPE hearing was told that People’s Bank has given Rs 37,721 million worth of unrecoverable bad loans. This includes millions of rupees given to a private company, of which a Director was also a member of the Board of Directors of People’s Bank, and the massive unrecoverable loans given to Mihin Lanka without any surety.
Last week, during the COPE hearing on irregular appointments at the Ministry of Finance, it was found that 1,707 persons had been recruited as Staff Assistants and Office Assistants of the National Savings Bank on the basis of lists sent to the Bank by the Private Secretary of the Minister of Finance. It wasârevealed that 104 persons had been recruited in 2017, 36 in 2018 and 250 in 2019. They had been given letters of appointment, the COPE was informed.
Senior official from Finance Ministry
Surprisingly, a senior official of the Ministry of Finance was sitting by the side of the COPE Chairman during this revelation. This officer was earlier reprimanded by the Prime Minister for allegedly acting on the instructions of the American Embassy, when she was employed in the Ministry of Foreign Affairs. She was later transferred to the Ministry of Finance.
COPE Chairman, JVP MP Sunil Handunnetti pointed out that recruitment on the basis of a list of names sent to the Bank by the Finance Minister’s Private Secretary was a violation of Bank and Government procedures, and ordered NSB to suspend all new recruitment until further notice. The officials of the Bank and Secretary to the Ministry of Finance Dr. Samaratunga were ordered to prepare a recruitment procedure and submit it to COPE within two months.
When asked whether recruiting of 48.6 per cent of staff assistants and office assistants was done by proper calling of applications through advertising the posts in the newspapers, Human Resources Manager of the Bank, M.N.A. Fernando replied that they were recruited on the basis of a list sent by the Private Secretary to the Minister. Handunnetti pointed out that other State banks recruit through competitive examinations, and the recruitment through a list sent by Minister’s PS was wrong and unjust. He instructed the Bank to adopt a proper mechanism for recruitment in the future, and submit it to COPE within two months.
However, the important issue here is whether any action will be taken against the officers who are responsible for these irregular appointments. They have denied jobs to highly qualified persons with all the requirements for employment in the banking sector, and appointed persons merely due to a list from a Minister’s Private Secretary. The officers who made appointments as well as the Minister’s PS should also be held accountable. It is not clear if the COPE Chairman and members brought this to the notice of the officer from the Finance Ministry, who was sitting next to the COPE Chairman. The COPE Chairman and members cannot be ignorant of the fact that this officer was also earlier reprimanded in Parliament by none other than the Prime Minister.
Corruption in privatisation
COPE also stated in its annual reports about corrupt practices in the privatization process of State ventures. In 2007, COPE revealed that the privatisation process of Sri Lanka Insurance Corporation, which was undertaken in 2003, was irregular. As a result of a case filed in the Supreme Court challenging the privatisation of Sri Lanka Insurance Corporation, on 4 June 2009, the Supreme Court annulled the sale of Sri Lanka Insurance Corporation.
In 2012, COPE summoned the Ceylon Petroleum Corporation to appear before a committee for investigation, following alleged imports of substandard fuel. Following the probes of the Criminal Investigation Department (CID) and the Bribery Commission, it was recommended to appoint a new Chairman, when the present corrupt Heads are removed, and to reconstitute all such Boards of Management in State institutions.