Govt. to present supplementary estimate to raise over Rs. 175 b to meet late payments

• Over Rs. 130 b due to contractors, suppliers
• Rs. 45 b due to banks to offset special 15% interest rate offered to senior citizens
• PM to make detailed statement on current situation to Parliament next week 
• Will seek supplementary funds with Parliamentary approval
• Blames poor financial management of last Govt., describes as “crisis” 

By Chandani Kirinde

Due to outstanding payments of over Rs. 130 billion owed to contractors and suppliers, and another Rs. 45 billion to banks for various projects undertaken by the last administration, the Government will bring a supplementary estimate to Parliament next week to settle these and other urgent expenditures, a top official said. 

Cabinet Spokesman and Higher Education, Technology and Innovation Minister Bandula Gunawardana said yesterday that Prime Minster Mahinda Rajapaksa, who is also Minister of Finance will make a special statement to Parliament next Wednesday (5 February). His statement will include all the related data to give a clear explanation to the public on the need to bring another supplementary estimate, in order to settle urgent payments which have to be made before the Parliamentary Election, he told reporters. 

“It is not fair for contractors and suppliers to blame this Government. We have only inherited this mess. We will need Parliamentary approval to increase the threshold on borrowings, as we have to raise loans to obtain funds,” the Minister said.

The Minister explained that the problem has been aggravated, with contractors and suppliers coming to meet officials and elected representatives, requesting that money due to them for projects they undertook and completed last year during the previous Government be settled. 

“It is estimated that the overdue payments up to October last year are around Rs. 130 billion. When we calculate the amount till December, this will increase further. They have completed the work, but they have not been paid. It is highly questionable how the accounting officers allowed such projects to be undertaken, without prior approval of Parliament for such expenditure. Any Government is only the custodian of public finances, and Parliament is entrusted control of public finances. Every cent of this money will have to be paid at the taxpayers’ expense,” he said.

The Minister also disclosed that the Government owes Rs. 45 billion to banks to offset the losses caused by the special interest rate of 15% offered for senior citizens. The due payments to banks have not been made for 2016, 2017, and 2018. 

Gunawardana claimed the country is facing a “financial crisis” due to the actions of the previous Government. “Programs such as ‘Gamperaliya’, the ‘Closest School, Best School’ project, and purchase of fertiliser and medicines, were undertaken with an election in mind, in violation of financial regulations.”

“Since President Gotabaya Rajapaksa was elected on 16 November, the country is being run with the funds approved by way of a Vote on Account, which allocated expenditure for the first four months of the year. Other than the money that was approved by the VoA by the last Government, the Treasury has no legal right to spend even an extra cent. Hence, we cannot take loans while there is also a ceiling on how much money can be borrowed by way of supplementary estimates. During this period, expect for the essential recurrent expenses, Chief Accounting Officers in Government institutions have to disburse money sparingly,” he said.

The Minister also accused the previous Government of misleading Parliament. “We can see after scrutinising the expenditure of the previous Government that Parliament was misled by submitting false data and information. The Public Finance Committee said in one of the reports that the Finance Minister had misled Parliament, with details of revenue or expenditure consequences being either undisclosed or obfuscated, while the House was provided with too little Information and misled by the nature of information that was provided.” 

“The former Finance Minister Mangala Samaraweera, the former Prime Minister Ranil Wickremesinghe, as well as Speaker Karu Jayasuriya all have to take responsibility for these lapses,” he added.

The Minister said that Opposition Leader Sajith Premadasa was now attacking the Government, but he too should be responsible for this situation. “He was a member of the Cabinet and there is collective responsibility. He is a close ally of former Finance Minister Samaraweera. The Speaker gets all the Committee reports, and he too should have intervened when the reports were sent to Parliament,” Gunawardana said.

He added that it is a matter of national urgency that the new Government settle all overdue payments. “I give an assurance that once the supplementary estimate is passed, the due payments will be made promptly,” he said.

He added the President has adopted austere measures since taking office to stop unnecessary expenditure. “We cannot undo the damage done in the past five years in 100 days, and all that we have undertaken so far is without a strong Parliament,” he added.