Parliamentary Series No. 203 The Eighth Parliament of The Democratic Socialist Republic of Sri Lanka (Third Session) Third Report of the Committee on Public Enterprises (1st March 2018 to 26th October 2018) Presented on 23rd day of October 2019 by Hon. Sunil Handunneththi Chairman of the Committee on Public Enterprises Ordered to be printed by Parliament of Sri Lanka on 23rd day of October 2019 Parliamentary Series No 203 2 The third report of the Committee on Public Enterprises in the eighth Parliament of the third session of the Democratic Socialist Republic of Sri Lanka Committee on Public Enterprises Eighth Parliament (Third Session) As per the Speaker’s Announcement made in Parliament on 11th January 2019, the following 16 Members of Parliament were appointed to the Committee on Public Enterprises for the Third Session of the Eighth Parliament by the Committee of Selection on 10th January 2019 in terms of Standing Order 120 (1): 1. Hon. Sunil Handunneththi, M.P. (Chairman) 2. Hon. Rauff Hakeem, M.P. 3. Hon. Ravindra Samaraweera, M.P. 4. Hon. Sujeewa Senasinghe 5. Hon. (Dr.) Harsha de Silva, M.P. 6. Hon. Ajith P. Perera, M.P. 7. Hon. Wasantha Aluvihare, M.P. 8. Hon. Ranjan Ramanayake, M.P. 9. Hon. Ashok Abeysinghe, M.P. 10. Hon. Anura Priyadarshana Yapa, M.P. 11. Hon. Lakshman Senevirathna, M.P. 12. Hon. Chandrasiri Gajadheera, M.P. 13. Hon. Mahindananda Aluthgamage, M.P. 14. Hon. Dayasiri Jayasekara, M.P. 15. Hon. Jayantha Samaraweera, M.P. 16. Hon. Mavai S. Senadhiraja, M.P. 3 Parliamentary Series No 203 4 The third report of the Committee on Public Enterprises in the eighth Parliament of the third session of the Democratic Socialist Republic of Sri Lanka Committee on Public Enterprises Eighth Parliament (Third Session) This report presents facts unveiled regarding institutions examined from 1st March 2018 to 26th October 2018 at the Committee on Public Enterprises within the Second Session of the Eighth Parliament and the Committee on Public Enterprises of the Second Session of the Eighth Parliament, Chaired by Hon. Sunil Handunneththi, consisted of the following 26 Hon. Members of Parliament. 1. Hon. Sunil Handunneththi, M.P., (Chairman) 2. Hon. Rauff Hakeem, M.P., 3. Hon. Ravindra Samaraweera, M.P., 4. Hon. Lakshman Senevirathne, M.P., 5. Hon. Sujeewa Senasinghe, M.P., 6. Hon. Wasantha Aluvihare, M.P., 7. Hon. (Dr.) Harsha de Silva, M.P., 8. Hon. Ajith P. Perera, M.P., 9. Hon. Lasantha Alagiyawanna, M.P., 10. Hon. Ranjan Ramanayake, M.P., 11. Hon. Ashok Abeysinghe, M.P., 12. Hon. Anura Priyadarshana Yapa, M.P., 13. Hon. Anura Dissanayake, M.P., 14. Hon. Chandrasiri Gajadheera, M.P., 15. Hon. Mahindananda Aluthgamage, M.P., 16. Hon. Dayasiri Jayasekara, M.P., 17. Hon. Bimal Rathnayake, M.P., 18. Hon. Mavai S. Senadhiraja, M.P., 19. Hon. Abdullah Mahroof, M.P., 20. Hon. Jayantha Samaraweera, M.P., 21. Hon. S. Sritharan, M.P., 22. Hon. M.A. Sumanthiran, M.P., 23. Hon. Hector Appuhamy, M.P., 24. Hon. (Dr.) Nalinda Jayatissa, M.P., 25. Hon. Harshana Rajakaruna, M.P., 26. Hon. Gnanamuththu Srineshan, M.P., 5 Parliamentary Series No 203 6 The third report of the Committee on Public Enterprises in the eighth Parliament of the third session of the Democratic Socialist Republic of Sri Lanka CONTENTS Chairman’s Note .......................................................................................... 9 Third Report of the Committee on Public Enterprises in the Third Session of the Eighth Parliament .......................................................................... 11 Lanka Hospital Corporation plc………………………………………….15 Buddhist and Pali University of Sri Lanka ……………………………...17 Ceylon Petroleum Corporation…………………………………………..19 State Pharmaceuticals Corporation of Sri Lanka ………………………..45 People’s Bank……………………………………………………………53 Janatha Estate Development Board……………………………………...59 National Transport Commission…………………………………………67 Elkaduwa Plantation Company Limited…………………………………71 Public Utilities Commission and Ceylon Electricity Board……………..79 National Water Supply and Drainage Board ……………………………99 Road Development Authority ………………………………………….105 State Engineering Corporation………………………………………….123 Land Reform Commission……………………………………………...131 Sri Lanka Securities and Exchange Commission of Sri Lanka ………..139 Postgraduate Institute of Archaeology………………………………….149 National Secretariat for Persons Having Disabilities…………………...155 Sri Lanka Ports Authority ……………………………………………...161 Industrial Development Board of Sri Lanka …………………………...179 Sri Lanka Tea Board……………………………………………………183 Sri Lanka Football Federation………………………………………….199 Sri Lanka Mahaweli Authority ………………………………………...205 State Pharmaceuticals Manufacturing Corporation of Sri Lanka………219 Lanka Electricity Company (Private) Limited………………………….227 On the Spot Investigation – Elkaduwa Plantations (Pvt) Ltd…………..233 Observations and steps taken as per 120(4) of Standing Orders – First Report of the Third Session of 8th Parliament………….....235 Profit/ (Loss) before Tax of aforesaid insrtitutions…………………….237 7 Parliamentary Series No 203 8 The third report of the Committee on Public Enterprises in the eighth Parliament of the third session of the Democratic Socialist Republic of Sri Lanka Chairman’s Note In the recent times, people have had as much enthusiasm towards the work of the Committee on Public Enterprises as they had towards the business of Parliament. The opening of the proceedings of this Committee to the media with effect from 9th August 2019 could be termed an expansion of opportunities available to citizens to intervene in facing the challenges that emerge in the economic, political and cultural spheres in modern Sri Lanka. Under the new conditions, a greater attention has emerged within the society regarding the powers of the Committee on Public Enterprises and steps on the part of Parliament to bring to books those persons responsible for misacts based on the observations and recommendations of the Committee has become a timely need. As people are the true shareholders of public enterprises, the right to ascertain that public enterprises invest money so that people get a fair share of its benefits rests with them while it reinforces the democratic foundation of our country. As such, this report has been compiled including facts pertaining to 23 institutions subjected to examination by the Committee on Public Enterprises during the period from 1st March 2018 to 26th October 2018 out of about 450 public enterprises subjected to scrutiny by this Committee. Some distinct institutions had to be summoned several times before the Committee, among which are the Roads Development Authority and the National Transport Commission. This report is not a comprehensive one on the institutions which have been subjected to scrutiny but one which summarizes the facts submitted before the Committee. I respectfully remember the support given to the Committee on Public Enterprises by the Auditor General and his staff by subjecting the accounts of the institutions concerned and express my sincere thanks to the Committee staff who contributed in preparing this Report and the translation section that performed translation work. Sunil Handunneththi Chairman Committee on Public Enterprises 9 Parliamentary Series No 203 10 The third report of the Committee on Public Enterprises in the eighth Parliament of the third session of the Democratic Socialist Republic of Sri Lanka Third Session of the Eighth Parliament Second Report of the Third Session of the Committee on Public Enterprises Introduction It is with great pleasure that the Committee on Public Enterprises presents its Second Report of the Third Session of the Eighth Parliament. The Auditor General subjects to examination all state-owned Corporations, merchant and other businesses vested in the government by any written law and those companies registered or deemed to have been under the Companies Act No. 7 of 2007 in which the government, or a government company, or a local authority holds more than 50% or more of the shares, including their accounts under the Committee on Public Enterprises. As such, observations and recommendations pertaining to the following 23 institutions which were subjected to the Committee’s examination during the period from 1st March 2018 to 26th October 2018 have been included in this Report. Institutions Subjected to Examination by the Committee on Public Enterprises from 1st March 2018 to 26 October 2018 and the Period of Reference for Examination in respect of Each Institution Institution Date of Period / Matter of Examination Reference for Examination 1. 22.03.2018 Although the Committee recommended that the account activities of this 04.04.2018 institution be subjected to the Lanka Hospital supervision of the Auditor Corporation plc General, the institution did not provide the information necessary for supervision activities. 2. Buddhist and Pali 23.03.2018 Reports of the Auditor University of Sri Lanka General for the years 2012, 2013 and 2014 and the 11 Parliamentary Series No 203 present performance 3. Ceylon Petroleum 03.04.2018 Report of the Auditor Corporation General for the year 2015 and the present performance 4. State Pharmaceuticals 06.04.2018 Reports of the Auditor Corporation of Sri General for the years 2014 Lanka and 2015 and the present performance 5. People’s Bank 17.07.2018 Reports of the Auditor General for the years 2014 and 2015 and the present performance 6. Janatha Estate 18.07.2018 Reports of the Auditor Development Board General for the years 2014 and 2015 and the present performance