ECONOMYNEXT – Costly loans taken by three state-owned enterprises including SriLankan Airlines under the former Rajapaksa regime account for the bulk of hidden liabilities uncovered by the new government, Finance Miniser Ravi Karunanayake said.
The national carrier had racked up total contingent liabilities of 240 billion rupees from 2009 to 2015, he said.
“When Emirates airline handed back management of SriLankan Airlines to the Rajapaksa government in 2009 it was with a profit of 9.2 billion rupees,” Karunanayakee told a news conference.
“That profit became a loss of 158 billion rupees in eight years. This is the debt that the new government has to repay, a result of the politicisation of state-owned enterprises.”
Karunanayake said a team from the International Monetary Fund had helped the government do a forensic audit to uncover hidden liabilities and find out the true state of the island’s finances.
Three state-owned enterprises alone account for 81 percent of the 1.1 trillion rupees in additional liabilities incurred by the Rajapaksa regime that were discovered recently, he said.
These are SriLankan Airlines, the Sri Lanka Ports Authority and the Ceylon Petroleum Corporation, he said.
The rest of the liabilities had been incurred by about a dozen other state institutions.
“The former president Mahinda Rajapaksa did build up infrastructure but has left tax payers with huge debt repayments with many infrastructure projects, like the Hambantota port and Mattala airport, not generating any returns,” Karunanayake said.
“Although Rajapaksa claims the Hambantota port cost 55 billion rupees, our books show the first phase alone cost 79 billion rupees,” Karunanayake said. “What happened to the balance?”
“While Rajapaksa says the Mattala airport cost 25 billion rupees, the cost shown in our accounts is 46.8 billion rupees. Into whose pocket did the balance go?”
Likewise, while Rajapaksa claimed the Katunayake expressway cost 35 billion rupees, government accounts show it cost 49 billion rupees, he added.
“We have made police complaints and will take legal action against those responsible.”
A stock of rice imported by the former regime at 75 rupees a kilo had to be sold in the wholesale market at 45 rupees a kilo, incudring a loss of 40 percent, Karunanayake also said.
Part of the stock had to be given as animal feed as it was not fit for consumption.