Time running out in SLIC deal issue

Time is running out in legal action the government wants to file against Sri Lanka Insurance Corporation (SLIC) over its privatisation, according to Minister of Skills Development and Public Enterprise Reforms, Sripathi Sooriyarachchi. The minister said this week the Public Enterprises Reform Commission (PERC) had recommended to the Treasury months ago to recover Rs.2.6 billion which SLIC owes the government, but no action has been taken to date.

However under current laws of contract, there is a six year grace period from the day any contract is signed for legal action to be instituted. In the case of SLIC, the privatisation deal was entered into on 13 April 2003 which gives the government time up to April 2009 to act on it.

Informed sources said PricewaterhouseCoopers (PwC), consultants for the government of Sri Lanka had failed to fulfil its assigned duties, a problem that has also been raised by the parliamentary committee (COPE). They said the contract does not clearly define the provisions regarding payments to be made after the completion of the 2003 financial year.