Auditor General unearths irregularities in Milco (Pvt) Ltd
State-owned dairy producer, Milco (Pvt) Ltd has been confronted with alleged irregularities and malpractices in its operations during the last few years, the Auditor Generals’ latest report uncovered.
The Ministry of Agriculture has appointed a committee to investigate the alleged corruption and irregularities at Milco in the wake of its takeover by India’s Amul Dairy Company in a Sri Lanka-India joint venture (JV) in October last year.
India’s National Dairy Development Board, Gujarat Cooperative Milk Marketing Federation Amul, and Cargills of Sri Lanka have entered into a joint venture agreement with the goal of achieving dairy self-sufficiency in Sri Lanka.
Production at Milco, which has a production capacity of 165,000 litres of liquid milk, has dropped to 55,000 litres owing to mismanagement and irregularities, the recent government audit inspection revealed. According to the findings, the diesel procurement scam at the Ambewela milk processing factory has caused the biggest loss for the company in recent times.
It has been detected that a massive stock of 165,300 litres of diesel issued and delivered by the Ceylon Petroleum Corporation (CPC) to the Ambewela factory had not been unloaded to its storage tanks from time to time for around eight years during the period of 2015 to August 31, 2022.
This stock of diesel valued at Rs 17 million had not been pumped into the fuel tanks of the relevant factory according to Milco’s stock ledgers but the payment had been made for it.
Fourteen bowsers carrying a stock of 92,400 litres of diesel worth Rs. 9,364,835 (Rs 9.36 million) have not arrived at the factory premises during 2017 to August 31, 2022. But the company has paid money for the procurement of diesel, audit report highlighted.
During the checking of security department’s document on receipt of fuel stock to the factory from the year 2017 to August 31, 2022, it was observed that these bowsers had not arrived at the factory but the payment had been made.
In the sample checking conducted regarding the issuing of diesel from tanks for the generator in the factory from the year 2019 to August 31, 2022 at the Ambewela factory it is mentioned in the diesel stock books that diesel has been issued to the generator.
But according to reports of diesel stock books submitted by the engineering department to government auditors, it has been found that a stock of 58,703 litres of diesel was missing.
Moreover there were several instances of buying a Rs.104 million worth Yoghourt mixer machine and Rs.2 million worth four milk producing machines had remained idle for several years causing a massive loss to Milco.
The sterilised milk bottles producing machine in at the Digana Dairy Factory and Rs.15 million valued ice cream containers producing machines in the Colombo Dairy Factory were underutilised at 71 per cent and 46 per cent respectively, the audit report revealed.
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