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Friday, 15 August 2014 01:28 - - {{hitsCtrl.values.hits}}
Q: What are your views about the recently-presented interim report?
A: A similar report will be released in September and the final report is planned to be tabled in December. Our observations will be made only after the final report is out. This report contains findings of examinations carried out by the COPE on 47 institutions during the period from October 2013 to April 2014. Of these 47 there are 18 business ventures and the remaining 29 are non-profit organisations.
There are three State institutions that continued to incur heavy losses; Ceylon Petroleum Corporation, Mihin Air and Ceylon Fisheries Corporation. Out of these three institutions, Petroleum Corporation has shown a remarkable improvement. The 92 billion rupee loss in 2011 was reduced to six billion rupees in 2013. We feel things will improve further in the years to come.
If we take Mihin Air, their losses have increased during the period. But what we need to realise is that Mihin Lanka is unable to make proper investments into their business due to lack of capital. The airline did not receive funds from the Treasury within the required timeframe. Therefore they were compelled to borrow loans at higher rates, which made the situation worse.
We should also keep in mind that about 10-15% airlines in the world are running on losses. I am not an expert on the aviation sector. But soon there will be recommendations to amalgamate SriLankan Airlines and Mihin Air. These recommendations will be studied by airline industry experts before reaching a final decision.
Ceylon Fisheries Corporation is the other company that has reported continuous losses. But they too have adopted mechanisms to increase returns during the next two to three years.
Q: The Opposition claims ailing companies such as Mihin Lanka should be shut down. Do you agree?
A: Mihin Lanka is doing well except on a few air routes. The problem with Mihin is that its overheads are extremely high. But SriLankan Airlines and Mihin Air bring foreign exchange into the country. If we shut down these companies, it is the foreign airlines that will actually benefit. Like I mentioned before, 10% to 15% of the airline companies run on losses. Mihin is a budget airline; the majority of budget airlines are not big profit makers. This is why we feel the Government should give a helping hand to these two airlines to revive their business. It’s easy for someone to say shutting down is the best option, but we have to look at these matters in a broader perspective.
Q: Institutions such as CPC and CEB have financially improved mainly due to tariff revisions, but they are yet to overcome mismanagement and inefficiency. How do you justify this situation?
A: CEB’s improvement was mainly due to good weather conditions. They did not have to depend on buying fuel to generate electricity. Due to this, coupled with several other reasons, CEB performed well financially. The situation with CPC is different because they are yet to receive huge amounts of dues from other institutions. Some of these amounts have been outstanding for a long period of time. CPC is severely affected by this situation and it has affected its productivity and performance. But one cannot rule out that inefficiency and mismanagement situations have not improved; the majority of State institutions are concerned about this situation and they are taking measures to overcome this. Unfortunately it is happening slowly.
Q: A common accusation against COPE is that its recommendations are not implemented by the institutions. How do you describe this situation?
A: Yes, there are such accusations. But we have been able to make some notable changes. We released an interim report on 47 companies and we are hoping to release reports on a quarterly basis. Companies that never submitted financial reports and annual reports for decades now do it annually. If you take the COPE reports during the 1997 to 2001 period, not more than 20 institutions were examined. Initially the examinations were based on very basic things such as profit and loss accounts, but now we have improved standards.
For the first time in COPE history our officials visited some of the institutions during examinations. We have been able to change heads of companies and directors who were incompetent. I believe that is a major achievement by COPE. Today I receive over 100 letters daily from various quarters. They have faith in us and believe that we are doing a great service. There are certain limitations we have to overcome. But once we have made observations and recommendations, it is up to the minister to act accordingly. I have always been saying this I am not the Executive. It is only the Executive who can make sure that these recommendations are put into action.
Q: What are your views about the inspection of State institutions carried out by Opposition Parliamentarians?
A: There is nothing wrong in what the Opposition MPs are doing, but there should be some mechanism. Today every act is politicised. When I sit in COPE, I act impartial. I don’t take my political affiliations to COPE. Likewise when you are doing something you should not try to politicise it.
