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COPA: Railways grilled on fund misappropriation

10 Jul 2022

 
  • 103 railway carriages not used
  • $ 1 m grant not included in financial statements
  • Purchase of engines cost taxpayer $ 10.5 m
  By Maheesha Mudugamuwa The Committee on Public Accounts (COPA) last week revealed a large-scale misappropriation of taxpayers’ money in a transaction between Sri Lanka and India, where the Department of Railways had purchased 160 train compartments. Further, as revealed by the COPA, 103 out of 160 train compartments bought from India have not yet been put into use. Speaking to The Sunday Morning, Ceylon Railway Employees’ General Union (CREGU) Convener S.P. Vithanage charged that these compartments had been purchased at a higher rate, and that there was no necessity to buy railway compartments for the Department as it already had sufficient compartments. “This transaction was undertaken purely with the aim of earning commissions. If we really needed train compartments, we could have purchased these at lower rates,” he alleged. However, when the COPA questioned railway officials about the non-use of 103 out of the 160 railway compartments purchased, the officials said that while Sri Lankan train compartments used the vacuum brake system, some of the purchased train compartments used the air brake system. This led the MPs to question who had approved the purchase of non-compliant train compartments, with the Committee also questioning which officers had been responsible for said decisions. It was also revealed that although $ 1,056,555 was spent on the Sri Lanka Railways Master Plan in 2017 utilising the financial grants of the Asian Development Bank (ADB), the same was not included in the Transport Ministry’s budget or financial statements. Meanwhile, the National Audit Office (NAO) revealed that the Government had incurred an estimated $ 10.5 million or Rs. 1,905.23 million loss due to the purchase of Indian engines despite confirmation from the Department of External Affairs that American engines would be more economically viable. Under the Indian loan assistance, 10 M11 locomotives had been purchased at a cost of approximately Rs. 850 million. Although the procurement should have been undertaken through open bidding in India, it had been carried out as a single source procurement. Similarly, the NAO observed 20 instances where the specifications of the bidder had not matched the specifications submitted by the Department.  Of the 46 conditions contained in the Technical Specification, 17 (or 37%) did not comply with the Technical Specification, and as such, should have been cancelled in accordance with Guideline 2.4 of the Procurement Guidelines.      


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