The Parliamentary Committee on Public Enterprises (COPE), at its recent meeting, queried how the Ceylon Electricity Board had purchased a luxury SUV using ADB loan funds meant for a transmission project.
The Island learns that the project director concerned has obtained a German made luxury vehicle, valued at over Rs. 23 million, through the Indian contractor of the project, in violation of financial regulations.
Although the vehicle was supplied by the contractor, all costs, including taxes and other levies, were borne by the CEB. According to CEB sources, customs duty and other levies were paid directly by CEB while the CIF of the vehicle was paid from project funds. It is not known who authorized the payment of Customs duty and port levies using CEB funds in direct violation of government circulars.
The COPE has also questioned certain irregularities in awarding subcontracts for civil engineering works on the project concerned. Subcontractors are generally included in the original offers submitted by bidders.
Once the bids are evaluated and the selected bid is approved by the Cabinet of Ministers for award of contract, changes cannot be made unilaterally by the CEB. Subsequent changes have to be justified and approved by the Ministry and Cabinet.
CEB does not exercise direct control over subcontractors, who are the responsibility of the main contractor. It is learnt that this influential project director has refused to award the contract, even after it had been duly approved by the Cabinet, unless the contractor agrees to select the civil subcontractor proposed by him, instead of the civil subcontractor included in the Cabinet approval.
Fearing unnecessary delays and harassment by the project director, the contractor concerned has given in and replaced the original subcontractor included in the Cabinet-approved tender with the one proposed by the project director. It is understood that contract award had been delayed by several months, after receiving Cabinet approval, due to this dispute.
Due to the close relationship the officer enjoys with powerful persons in the Ministry of Power and Energy, his bosses at CEB, including the General Manager have been keeping silent on the whole issue.
However, according to the monthly progress reports, submitted to the Ministry by CEB, this particular transmission project had shown a remarkably poor performance despite lavish spending of public funds on super luxury vehicles, expensive mobile telephones and laptop computers for the project director.
It is also learnt that despite the consistently poor performance record of this individual’s career at CEB, the Ministry had chosen him to head a newly formed project company. That Company had been formed with 100 per cent CEB funds to promote the use of local expertise and manpower in development projects of CEB.
In another related development, the CEB has purchased a luxury SUV at a cost of Rs. 27.5 million for a VIP in the Ministry of Power and Energy from the funds of a rural electrification project. According to CEB sources, the Government of Iran had granted a loan for the rural electrification program.
These funds have been obtained by the Government on commercial terms and are payable at commercial interest rates. This vehicle, Toyota Prado Land Cruiser, bearing registration number KQ-731, has not been seen at the Ministry since it was taken away a few weeks ago by the VIP concerned.
However, it is learnt that the vehicle is seen at the official residence of the VIP concerned. Other VIP neighbors have confided that this vehicle had been seen on some occasions transporting a journalist friend of the VIP, who is a frequent visitor to his official residence.
One CEB official who wished to remain annonymous lamented that the funds could have been used to electrify many rural villages instead of being wasted on a luxury vehicle.
The purchase of that vehicle was not probed by COPE.