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FeaturesNorochcholai Power Plant US$ 300 M ‘pocketed in commission’ ;Rs 6.4 B fraud at RMV; Rs 600 M missing from Education Cooperative Fund

Norochcholai Power Plant US$ 300 M ‘pocketed in commission’ ;Rs 6.4 B fraud at RMV; Rs 600 M missing from Education Cooperative Fund


Norochcholai Power Plant US$ 300 M ‘pocketed in commission’
The main opposition, United National Party (UNP), has accused that the government’s estimated cost of US$ 1,300 million for the construction of the Phase 1 of Norochcholai Power Plant, included US$ 300 million ‘pocketed in commission’. They alleged the actual construction cost was US$ 1,000 million, sans commissions.

“The cost of Phase 1 of Norochcholai has now been estimated to be US$ 1,300 million. The excess US$ 300 million had been pocketed as commissions,” UNP MP Harin Fernando alleged, addressing the media in Colombo yesterday. He claimed the Chinese entrepreneurs, who had been involved in the construction of the Norochcholai Coal Power Plant, were now refusing the Sri Lankan Government’s offer to sell it back to them, because of the excess US$ 300 million that had been ‘pocketed as commission’ by those involved in the construction project.

MP Fernando alleged the actual cost incurred during the ‘phase one’ of the Norochcholai construction project was US$ 1,000 million.
“The government claimed the cost was US$ 1,300 million. However, the Chinese have said otherwise, in their refusal to accept the ownership of the plant. This means US$ 300 million was pocketed as commission by those involved in the project,” he said.

Also addressing the media, UNP MP Ajith P. Perera said, the Norochcholai Power Plant “didn’t live up to its expectations,”and “the only result was getting Sri Lanka into a long-term partnership with China, which is of no benefit to Sri Lanka.”

He claimed a further US$ 890 million would be required for the completion of the second and third phases of the Norochcholai construction project.

He said former Power and Energy Minister, Champika Ranawaka, vehemently opposed the conditional partnership with the Chinese, and he ended up being kicked out of his portfolio.

“We know the current Power and Energy Minister Pavithra Wanniarachchi was appointed to ensure that the second and third phases of the project are passed to the Chinese without any hassle,” Perera, UNP MP alleged.

He went on to say many ‘patriots’ seemed to have no qualms about ‘selling Sri Lanka off to China,’ while at the same time, ‘shouting to high heaven about western influences in the country.’

“Recently in Parliament, permission was sought to bring the largest hotel chain in Sri Lanka, the Hyatt Regency, under a new establishment called the ‘Sino-Lanka Hotel and Spa’, which , it was assured would be a ‘completely Sri Lankan’ business. But how could they make such a claim, when ‘Sino’ refers to ‘Chinese’? The government must give us an answer,” Perera said.

By Lashane Cooray
Rs 6.4 B fraud at RMV

Minister of Transport, Kumar Welgama, admitted in Parliament yesterday a fraud to the tune of
Rs 6.4 billion had taken place at the Department of Motor Traffic, due to the registering of assembled vehicles.
Welgama said the fraud was highlighted in the 2010 annual report of the Auditor General, and added it had been committed by a group of vehicle importers, who had imported chassis of vehicles citing them as spare parts.

“The parts were assembled here and released to the market under the numbers of vehicles already registered at the Department. The government lost around Rs 6,400 million due to this loss of new registrations,” he revealed.

The fraudsters had made use of the special permission granted to import vehicle chassis in the aftermath of the tsunami disaster, the minister said adding the engines and gear boxes too had been imported under the category of spare parts. Around 2,000 vehicles had been released to the market in this manner and of them 1,900 have been assigned registered numbers of old vehicles.

Minister Welgama said not only the officials attached to the Department, but also some in the Import and Export Department and Customs Department are responsible for this. He said he asked the Commissioner of Motor Traffic to send inquiries to the Controller of Import and Export with regard to this issue.

“Under previously used mechanism of motor vehicle registration, the numbers were not issued in batches and the English letters were not there either. A group of officials had got involved in this operation by helping the fraudsters to find old registration numbers,” he charged. Minister Welgama said an investigation is in progress and the Criminal Investigation Department and the Fraud Investigation Bureau are also involved in the probe.

The minister said this in response to a question raised by Matara District UNP MP Buddhika Pathirana.
By Gagani Weerakoon

Rs 600 M missing from Education Cooperative Fund

A sum of Rs 600 million, deposited in a State bank by the Education Employees’ Cooperative, Thrift and Credit Society Limited has gone missing, the Coalition Against Corruption alleged. As a result, around 150,000 members of the society are unable to obtain loans and other facilities, the Transparency International press release said.

The media release stated: The membership of the Society, which was established in 1930 comprises mainly teachers and other staff in the education sector. Each member contributes Rs 466 monthly as subscription. The Society earns additional income through interest on loans issued to its members. However, the government does not contribute towards the fund.

Coalition member and General Secretary of the Ceylon Teachers’ Union (CTU), Joseph Stalin, alleged already Rs 11,250,000 from the fund has been spent on purchasing a land with an extent of 25 perches in Badulla to build a district office for the Society. “The value paid for the land is quite excessive and it has been later found it had been a paddy land, which is not at all conducive for any construction. Up to now no building has been constructed on the land,” he added.

Convener of the Coalition, Saman Ratnapriya said a land on Keppetipola Road, Kandy was purchased for Rs 36,400,000 with only three members approving the purchase. “However, it was discovered the land is the subject matter of an ongoing testamentary case between five persons and as a result the Cooperative lost 11 perches subsequently. Therefore, the fund lost a further Rs 8.7 million on this purchase. The money belongs to the members of the cooperative and losses are due to the failure to follow established practices such as calling for tenders.”

Ratnapriya also said around May 2011 steps were taken hastily to establish six district offices. “Thereafter, Rs 80,000 and Rs 70,000 were paid as advances for a two-year lease periods for two premises in the Gampaha and Kalutara Districts respectively. These offices are not necessary for the cooperative society. The payment of rent for the district offices is an unnecessary expense and a waste of public funds.

“Rs 60 million was allocated by the board of the society to repair 10 holiday bungalows of the Society, but it is reported the repairs are substandard. The level of the holiday bungalow in Anuradhapura was to be raised by one foot as it was frequently affected by floods that hit the area. A further Rs 3.5 million was allocated for this purpose and to purchase new furniture. However, only a few mattresses have been purchased till date. Air conditioners were to be fixed for every bungalow, but that has not been done as yet,” he charged.

According to W.P Dayaratne, Secretary of the Professional Teachers’ Association, Rs 940,000 has been spent on demolishing part of the main office building of the Cooperative Society located on the Galle Road, which required to be modernized. “However, this has turned out to be futile as there are no funds to rebuild and modernize the main office.

“Rs 400,000 is being paid to a team of lawyers who have been retained by the board on behalf of the society for court cases in which the society is not a party. Two vehicles purchased for Rs 8 million at the time the present management board was elected, are now being used for the personal work of the board members. No tender procedure was adopted nor was any needs assessment done prior to the purchase of the vehicles.

“As at present, the fund and the assets of the society are valued at Rs 7 billion. However, no audit has been carried out in recent years. The Cooperative Society has now received written orders and from the minister who has been assigned the subject of Cooperatives to pass the purported audited accounts without holding an Annual General Meeting.”

The Coalition Against Corruption also said the accumulation of applications for distress and property loans, which are not processed, failure to allocate funds for scholarships and gratuity, the introduction of a waiting list to issue loan applications, failure to pay bonuses to the members and the failure to meet daily administrative expenses of the cooperative society and to pay salaries of the employees of the society is indicative of the dismal state of the funds of the cooperative. According to its members, the main reasons for this state are the waste of the funds, malpractices and corruption in the management of the Cooperative Society.” (Ceylon Today Online)


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