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State suffers Rs. 15 billion loss from Lak Sathosa rice imports in 2014
The parliamentary oversight Committee on Public Enterprises (COPE) has endorsed the Auditor General’s findings that the state suffered losses of up to Rs. 15 billion due to bungling of rice imports by Lak Sathosa during the previous regime.
COPE Chairman and JVP Parliamentarian Sunil Handunnetti said the rice had been imported, bypassing a Cabinet decision to restrict rice imports to 50,000 metric tonnes to meet a shortfall during the 2014/2015 period.
“The Cabinet had given approval to import 50,000 metric tonnes of rice to face the shortage in the market. However, the Auditor General had uncovered that Lak Sathosa had disregarded this decision and instead imported 257,559 metric tonnes of rice,” Mr. Handunnetti said, presenting the COPE report to the House on Friday.
He said the importation of such a large quantity of rice contributed to the breakdown of Sri Lanka’s agrarian economy.
According to the COPE report, the imports cost around Rs. 27 billion and the revenue earned by its sales was around Rs 11.8 billion. As a result, the country lost more than Rs 15. 1 billion.
Lak Sathosa had obtained loans amounting to Rs. 14 billion from the Bank of Ceylon and the People’ Bank to open Letters of Credit to import the rice. Of these loans, Rs 8.9 billion had remained unpaid till December last year with penalty interest as of November 21, last year amounting to Rs. 7. 9 million.
COPE also endorsed the AG’s recommendations that the rice importing process required a major revamp and that the government’s procurement guidelines should be strictly adhered to.
The other recommendations were the need for equal and maximum opportunity for eligible interested parties to participate in the procurement; annual registration of eligible suppliers, and purchases in emergency situations to be made by inviting quotations from those suppliers.