Administrative weaknesses, irregularities of Ports Authority brought to light at COPE

The Sri Lanka Port Authority (SLPA) had been called before the Committee on Public Enterprises (COPE) on Tuesday (05), where many administrative weaknesses and irregularities of the authority were revealed.

The committee chaired by MP Ranjith Bandara has asked SLPA officials that a proposal be submitted to the COPE within 03 months regarding increasing revenue, cost management and increasing efficiency of the Sri Lanka Ports Authority. 

The COPE Chair recommended that the Ports Authority be summoned before COPE back on December 08, 2023, and mentioned that the 03 proposals pertaining to revenue enhancement, cost management and efficiency enhancement of the authority should be submitted on the relevant date.

Meanwhile, the financial results of the Ports Authority in the past few years were taken into discussion, the Parliamentary Communications Department said, adding that the committee questioned the officials present regarding the non-payment of Rs. 4.975 million of the profit earned by the SLPA from 2016 to 2021 which was to be credited to the Consolidated Fund.

In response, the SLPA officials have given an undertaking to take measures to pay this amount within two months.

The committee further questioned the officials about failing to make amendments to the contract of the USD 282.56 million reached with the contractor to purchase 12 large cranes and 40 automatic gantry cranes to maximize the operational capacity of the eastern terminal. The Members of Parliament present pointed out that this was also discussed when the SLPA was summoned before COPE on June 22, 2022.

The officials present mentioned that contracts were reached on the said in the year 2021 and despite the issuance of Letter of Credit (LC) by the Bank of Ceylon, these payments could not be made due to the country’s economic situation.

The COPE Chair mentioned that due to the non-amendment of this contract, legal issues may arise in the future, adding that operational cost too has been spent on this. As a result, COPE recommended that a report be submitted on this said within a month.

Moreover, COPE pointed out that according to the reports of the Auditor General, it was observed that the container handling capacity of SLPA at the Colombo Port has decreased from 81% to 28% by 2022. Furthermore, the committee members pointed out that the Western Terminal has been working to increase the income through the activities of private investors.

As a result, COPE pointed out that the ability to compete with the private sector should also be created. The Committee was also looked into the preparation of a comprehensive plan for the next 5 years. The SLPA officials pointed out that 50% of the comprehensive plans prepared for the next 5 years have been completed.

The officials further agreed to present this plan to the Committee when the Authority is called before COPE again, the Parliamentary Communications Department mentioned.

COPE also drew attention to the decrease in the arrival of naval vessels at the ports of Colombo, Galle and Trincomalee between 2018 and 2022. COPE also questioned as to why not a single ship docked at the port of Kankesanthurai in the year 2020.

The officials pointed out that though there was a decrease in the year 2022, it is getting better now. The officials mentioned that the ports other than the Colombo port were used to import raw materials such as cement and the reason for this was the decrease in importing these raw materials over the past few years.

Thus, the Committee instructed the SLPA officials to focus on further activating the existing ports at the provincial levels.

There was also a discussion about the plan to build a multi-purpose terminal at the Galle port and the fact that the project had to be suspended due to the 3-year delay in obtaining approval from UNESCO.

On March 28, 2006, the Sri Lankan government and the Japan Bank for International Cooperation signed a loan agreement in this regard and it was necessary to obtain the approval of UNESCO to carry out the construction in the proximity of Galle Fort, which is designated as a world heritage.

Given that this approval had not been obtained for over 3 years, it has been decided to suspend this project. However, the Committee pointed out that the consultant fee of Rs. 418 million spent for this purpose is observed as a net expense.

The officials pointed out that as priority was given to the development of Hambantota port, the attention on Galle port diminished. However, they mentioned that this money is not an ‘idle expenditure’ as they hope to develop the Galle port as a tourist spot in the future. The officials also mentioned that the Ports Authority has not been affiliated with the said matter.

It was revealed that there are 914 excess employees in the Port Authority. Given the context, COPE pointed out that overtime allowances have been given to the employees. COPE also pointed out that it is observed that money has been given as overtime allowances in the year 2021 as well.

Further, COPE instructed the Department of Management Services to pay attention to the excess number of employees and take necessary action. The Committee instructed to resolve the issue related to the number of employees before reappearing before the Committee.

An inquiry was made regarding the non-installation of CCTV cameras covering all the gates and bonded warehouses of the Sri Lanka Port Authority. The officials present responded that CCTV cameras would be gradually installed, pointing out that 538 cameras have been installed so far and about 400 will be installed in the future. The officials present said that they intend to install these CCTV cameras within 6 months.

COPE also inquired about the Night Navigation system at Trincomalee port not functioning at its maximum capacity.

It was disclosed that 1.2 billion rupees have been spent on food for the year 2022. Accordingly, the Auditor General mentioned that 498 million rupees have been spent on snacks.

Then, it was decided to summon SLPA officials again on December 08, 2023, to review the progress of these recommendations.

State Ministers Jagath Pushpakumara, Janaka Wakkumbura, Members of Parliament Mahindananda Aluthgamage, Dayasiri Jayasekara, Rohitha Abegunawardhana, Eran Wickramaratne, S. M. Marikkar, Sanjeeva Edirimanna, Jagath Kumara Sumithraarachchi, Madhura Withanage and Prof. Charitha Herath were present at the Committee meeting held.

The Auditor General’s report for the year 2021 and the current performance were examined and the Secretary of the Ministry of Ports, Naval and Aviation Services K. D. S. Ruwanchandra, SLPA Chairman Keith D. Bernard and a group of officials were summoned before this Committee. Moreover, the progress of implementing the recommendations made to the SLPA when its officials were summoned before COPE on June 22, 2022 was also examined.