COPE Interim Report reveals Rs 9.7 B loss
By Zahrah Imtiaz-August 6, 2014
The three biggest losers, the Ceylon Petroleum Corporation (CPC), Mihin Air and Ceylon Fisheries Corporation (CFC) accumulated losses amounting to Rs 9.7 billion during 2013, according to the Fourth Interim Report released by the Committee on Public Enterprises (COPE).
The CPC had suffered loses up to Rs 6.3 billion, Mihin Air Rs 3.2 billion and CFC Rs 75 million. The COPE report was submitted to Parliament by its Chairman D.E.W. Gunasekara yesterday.
COPE audited these organizations from 8 October 2013 to 8 April 2014. The report investigated 47 public enterprises. Out of the 47, 18 were business ventures and 29 nonprofit institutions. The CPC, Mihin Air and CFC were the only business ventures which suffered such losses.
In the meantime, the Urban Development Authority, Ceylon Fishery Harbours Corporation, Cooperative Wholesale Establishment and Sri Lanka State Plantations Corporation had not submitted financial statements.
Of the nonprofit institutions investigated, nine had experienced deficits. They were the National Youth Services Council (Rs 253 million), National Transport Commission (Rs 190 million), Rubber Research Board of Sri Lanka (Rs 84 million), Vocational Training Authority of Sri Lanka (Rs 49 million), Central Environmental Authority (Rs 28 million), Rajarata University of Sri Lanka (Rs 18 million), Disaster Management Centre (Rs 9 million), Tertiary and Vocational Education Commission (Rs 4 million) and Post Graduate Institute of Pali and Buddhist Studies (Rs 3 million). These deficits were not termed losses as they provide welfare to the people.
The COPE report also observed that the CPC had incurred an estimated loss of Rs 8.3 billion on the procurement of petroleum products during the period from 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".
The CPC had overpaid US$ 2,060,842 to a foreign company (UAE Company) due to the inclusion of the premium of US$ 54 twice in the agreement entered into with the said Company to procure petrol.
The Central Environmental Authority (CEA) on the other hand had overpaid a contractor Rs 19 million in its Solid Waste Management Project in Dompe, "as the tender had been offered to the sixth highest bidder neglecting the justifications of the lower bidders".
The CEA had also faced further losses amounting to Rs 30 million when it paid Rs 295 per cubic metre instead of charging the contractor Rs 45, for the removal of 88,648 cubic metres of earth.
The COPE report has revealed that no proper investigation was carried out by the CEA when "issuing the environmental certificate to the Gloves Manufacturing Factory in Rathupaswala and the certificate had been issued by testing only the water samples provided by the factory owner".
UNP MP, Eran Wickremeratne, who addressed a media briefing on the report said, the Auditor General had identified four types of audit opinions. They were that of 'unqualified, qualified, disclaimer and adverse'. The unqualified opinion indicated that the Auditor General could not find significant financial violations in a public enterprise, while qualified opinion was expressed when the Auditor General found issues in the financial information of a public enterprise. "Of the 47 institutions we have investigated only seven received unqualified opinions, while 40 other received qualified opinions," observed MP Wickremaratne.
By Zahrah Imtiaz-August 6, 2014The three biggest losers, the Ceylon Petroleum Corporation (CPC), Mihin Air and Ceylon Fisheries Corporation (CFC) accumulated losses amounting to Rs 9.7 billion during 2013, according to the Fourth Interim Report released by the Committee on Public Enterprises (COPE).
The CPC had suffered loses up to Rs 6.3 billion, Mihin Air Rs 3.2 billion and CFC Rs 75 million. The COPE report was submitted to Parliament by its Chairman D.E.W. Gunasekara yesterday.
COPE audited these organizations from 8 October 2013 to 8 April 2014. The report investigated 47 public enterprises. Out of the 47, 18 were business ventures and 29 nonprofit institutions. The CPC, Mihin Air and CFC were the only business ventures which suffered such losses.
In the meantime, the Urban Development Authority, Ceylon Fishery Harbours Corporation, Cooperative Wholesale Establishment and Sri Lanka State Plantations Corporation had not submitted financial statements.
Of the nonprofit institutions investigated, nine had experienced deficits. They were the National Youth Services Council (Rs 253 million), National Transport Commission (Rs 190 million), Rubber Research Board of Sri Lanka (Rs 84 million), Vocational Training Authority of Sri Lanka (Rs 49 million), Central Environmental Authority (Rs 28 million), Rajarata University of Sri Lanka (Rs 18 million), Disaster Management Centre (Rs 9 million), Tertiary and Vocational Education Commission (Rs 4 million) and Post Graduate Institute of Pali and Buddhist Studies (Rs 3 million). These deficits were not termed losses as they provide welfare to the people.
The COPE report also observed that the CPC had incurred an estimated loss of Rs 8.3 billion on the procurement of petroleum products during the period from 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".
The CPC had overpaid US$ 2,060,842 to a foreign company (UAE Company) due to the inclusion of the premium of US$ 54 twice in the agreement entered into with the said Company to procure petrol.
The Central Environmental Authority (CEA) on the other hand had overpaid a contractor Rs 19 million in its Solid Waste Management Project in Dompe, "as the tender had been offered to the sixth highest bidder neglecting the justifications of the lower bidders".
The CEA had also faced further losses amounting to Rs 30 million when it paid Rs 295 per cubic metre instead of charging the contractor Rs 45, for the removal of 88,648 cubic metres of earth.
The COPE report has revealed that no proper investigation was carried out by the CEA when "issuing the environmental certificate to the Gloves Manufacturing Factory in Rathupaswala and the certificate had been issued by testing only the water samples provided by the factory owner".
UNP MP, Eran Wickremeratne, who addressed a media briefing on the report said, the Auditor General had identified four types of audit opinions. They were that of 'unqualified, qualified, disclaimer and adverse'. The unqualified opinion indicated that the Auditor General could not find significant financial violations in a public enterprise, while qualified opinion was expressed when the Auditor General found issues in the financial information of a public enterprise. "Of the 47 institutions we have investigated only seven received unqualified opinions, while 40 other received qualified opinions," observed MP Wickremaratne.
Rajapaksa Mihin Lanka Among Largest Loss-Making Public Companies
BAugust 6, 2014
Rajapaksa state-owned airline Mihin Lanka has been listed in the 4th interim report released by the Committee on Public Enterprise (COPE) as one of the largest three loss making state owned companies of 2013.
Mahinda Rajapaksa
The report submitted to the Parliament by COPE Chairman D. E. W. Gunasekara yesterday revealed that Mihin Lanka – the first public venture that was named after President Rajapaksa, has incurred a loss of Rs. 3.2 billion along with Ceylon Petroleum Corporation (CPC) and Ceylon Fisheries Corporation with the total losses mounting up to Rs. 9.7 billion in 2013.
Interestingly, although the COPE audits had been carried out on 47 public enterprises, the Urban Development Authority (UDA) that is presently under the strict management of Defense Secretary Gotabhaya Rajapaksa had not submitted its financial statements.
The COPE audits had been carried out between October 8.2013 and April 2014.
