The Island:
Chairman of Parliamentary watchdog Committee on Public Enterprises (COPE) Senior Minister D. E. W. Gunasekera blames parliament for its failure to tackle public sector corruption, waste and irregularities.
Parliament should be held responsible for the pathetic state in many public enterprises, Minister Gunasekera said in a brief interview with The Island on Friday adding that the country would have been better off had governments followed basic principles in good governance and accountability.
Minister Gunasekera that the Auditor General as well as the two watchdog bodies, COPE and the Public Accounts Committee (PAC), too, had failed in their responsibilities. “All of us should be ashamed. There is an urgent need to take remedial action to restore confidence in the public sector.”
The Senior Minister took over COPE last June and initiated inquiries in August. According to him, since August COPE has summoned the heads of almost 100 public enterprises, whereas only 19 were called throughout 2009 and 12 in the first half of last year. He emphasised the need to establish an independent Bribery Commission in keeping with the 18th Amendment to the Constitution enacted last September.
Minister Gunasekera said that a front-page news item captioned ‘BCC Lanka makes COPE debut after 23 years,’ in the Feb. 23 issue of The Island revealed what he called criminal negligence on the part of those responsible for ensuring accountability in public sector enterprises.Altogether 249 enterprises had been placed under the purview of COPE, though some of them escaped scrutiny by parliament and the Auditor General, Minister Gunasekera said.
The top management of BCC Lanka appeared before COPE the day after The Island revelation, responding to summons issued some time ago. “At the outset of Thursday’s meet in parliament, I apologised on behalf of parliament and COPE for failing to summon BCC Lanka for over two decades. I also pointed out the failure on the part of the Auditor General to alert COPE regarding corrupt institutions,” the Senior Minister said.
He said that the then President JR Jayewardene had converted the BCC into a government-owned business undertaking in 1988.
The BCC had been one of the top British-run operations here before it was taken over by the then government of Premier Sirimavo Bandaranaike in 1972. The BCC had been in the top league, which included Unilever and Ceylon Tobacco, and it attracted some of the best graduates produced by local universities. The product had a global demand and the British laid an underground pipeline to carry the oil from the production facility at Aluthkade to ships at the Colombo harbour.
Although the BCC had been managed reasonably well over the next few years, the rot set in, in 1988, after the then administration pulled out a subsidiary of the BCC and handed it over to a party loyalist.
The present BCC Lanka management told COPE that the UNP-led UNF, which came to power in Dec. 2001, had sold one acre and 46 perches of BCC land to businessman Daya Gamage for Rs. 87 million, about three million rupees less than the government valuation at that time. Following the land deal, BCC Lanka had been left with only 12 acres of land.
Daya Gamage contested the last parliamentary election on the UNP ticket from the Digamadulla electorate, though he failed to enter parliament. UNP leader Ranil Wickremesinghe accommodated Gamage’s wife in parliament through the National List.
Minister Gunasekera said that he had called for a full report on the transaction and other deals involving the BCC Lanka. “The whole thing is a mess. Successive managements squandered public funds. Money obtained from the banking system, too, was wasted,” he said alleging that the enterprise had also failed to recover money owed to it by those who distributed its products.
Responding to a query, the COPE Chief said that there had been absolutely no financial discipline and accountability as far as BCC Lanka was concerned. It was not an isolated case but one among perhaps over 100 or even 150 mismanaged State enterprises due to negligence on the part of successive governments, he said.
The new management of BCC Lanka told COPE that of the remaining 12 acres of land belonging to the BCC, four acres would be utilised by the UDA to put up a low cost housing scheme, while the recently formed State Resources Management Company would take over six acres leaving the BCC with only two acres.
The COPE Chief directed the management to ensure that in the event the UDA took land even for a public project, the Treasury adequately compensated BCC Lanka. He also called for a fresh valuation of BCC Lanka land before the launch of any new projects.
BCC Lanka management will be summoned again by COPE shortly.
Minister Gunasekera said that the government could no longer ignore waste and corruption, not only in the public sector but in private sector as well. He emphasised that both sectors were equally corrupt. The private and public sectors had connived to put through mega deals at the expense of the national economy over the years. The Sri Lanka Insurance Corporation (SLIC) and Lanka Marine Services Limited (LMSL) transactions, concluded during the previous UNP-led UNF administration, were two of the worst deals revealed by COPE, the Minister said.