The Sunday Leader

Fishery Harbours Corporation In Troubled Waters

The ‘Weligowwa’ dredging machine

By Nirmala Kannangara

The ‘Weligowwa’ dredging machine

Ceylon Fishery Harbours Corporation is a den of corruption accused of disregarding government rules and regulations openly in order to engage in various scams.

Although the irregularities that are taking place at the Ceylon Fishery Harbours Corporation (CFHC) has been informed to its line Ministry, the Fisheries and Water Resources Development Ministry, their failure to take action against the CFHC Management has raised many eye brows and questions have been raised as to whether the Ministry’s higher officials are working hand in glove with the corrupt CFHC management for financial gain.

“It is the Ministry’s responsibility to find out the irregularities that are taking place at any institution that comes under them and take immediate action against those who are at fault.

Instead of doing so, they too are working in certain underhand deals with the CFHC and that is why the Ministry has failed to take any action against the corrupt officials,” a senior ministry official said on basis of anonymity.

According to him, leasing of ‘Weligowwa’ dredging machine to a Korean company is one of the underhand deals the Fisheries Ministry entered with the CFHC in the recent past.

“This machine was a donation to the CFHC by the Japanese in 1995. Although this was in perfect working condition, it’s service was devalued and said that it is out of order and was leased out to Seowoo Lanka (Pvt) Ltd., which is a Korean firm for six years on October 12, 2012,” said the Ministry official.

Meanwhile, the Auditor General’s Department too confirmed to The Sunday  Leader that CFHC was openly violating government rules and regulations and added that they had deliberately failed to send their response for audit queries.

“Since CFHC is not responding to any of our queries, we had a meeting with Ministry Secretary and other officials at the Fisheries Ministry recently where the CFHC was instructed to respond to our queries. As a result they have sent their responses for previous audit queries which have many flaws. But they are yet to send their responses for the latest audit queries,” said Audit Superintendent K. K. S. Jayakody.

Meanwhile, Chairman CFHC Upali Liyanage has come under severe criticism for all the irregularities taking place over the years and for bypassing government directives.

On condition of anonymity, sources from CFHC said that Chairman Liyanage had disregarded Public Enterprises Circular No: 60 on the retirement age of public servants.

“According to Public Enterprises Circular No: 60 and Treasury Secretary’s letter dated April 29, 2011 approvals have to be taken from the cabinet if extensions were given for those who are over 60 years of age. However bypassing these regulations, Chairman Liyanage has given extensions to 12 employees who are over 60 years. All these 12 employees are Liyanage’s trusted confidants.

Once again bypassing Public Enterprises Circular No: PED/ 12 clause 8.3.9 which clearly states that public institutions are not allowed to foot its line ministry expenses, CFHC has paid salaries for six employees over 60 years who are attached to the Fisheries Ministry. Even this was highlighted in the audit query dated August 30, 2013. Because of these irregularities, CFHC has been incurring huge losses over the years,” the sources said.

The sources further accused Upali Liyanage for recruiting a Legal Consultant on contract basis bypassing Public Administration Circular No: 26/ 2010.

“In a letter dated December 31, 2010 to all Ministry Secretaries, Public Administration and Home Affairs Ministry Secretary P. B. Abeykoon wanted not to make new recruitments for any temporary, casual, substitute, contract and relief basis posts. Deviating from instructions of the Management Services Department of the General Treasury, Chairman Liyanage appointed a Legal Consultant on contract basis on February 23, 2012 for three months and it was later extended for a further three months on May 27, 2012. He is still functioning as the Legal Consultant to the CFHC although he is now over 60 years of age,” said the sources.

Meanwhile going against PED/ 12 and clause 8.3.9 of the Public Enterprises Circular of June 2, 2003, CFHC has pumped fuel to the value of Rs.1.99 million for three Fisheries Ministry vehicles bearing registration numbers KA 7696, KJ 8065 and PB8392 in year 2012.

“Once again overlooking Public Enterprise Circular that has strictly given instructions to all government institutions not to foot its line ministry expenses, CFHC has spent Rs.1.99 million to pump fuel to the above mentioned vehicles belongs to the Fisheries Ministry. The Corporation at any point has not taken any action to recover this money from the Ministry.

The Corporation is also accused of giving fuel to the amount of Rs.7. 29 million on credit to fishing boats although this has been barred for a longer period. This fuel has been given for political stooges and has failed to recover the amount for the past one year,” added the sources.
According to an audit query dated June 5, 2013 CFHC has failed to recover Rs.5. 29 million in the form of rent from the CFHC properties that has been leased out.

Calling for clarifications from the CFHC, the audit query states as thus, “Although there are three legal officers including the Legal Consultant at CFHC, they have failed to take any remedy to recover the rents over the years.
Although this has been emphasized on earlier audit queries as well, the CFHC management has failed to take any action to recover the same”.

Superintendent of Audits of the Auditor General’s Department, K. K. S. Jayakody said that CFHC has openly violated government rules and regulations and added that although instructions have been given to the CFHC management to furnish answers for the audit queries, they are yet to send their answers for the latest queries although the deadlines have elapsed.

“Earlier CFHC never sent answers to any of our audit queries and hence we had a discussion with them at the ministry recently. They promised to send the answers and sent the responses for the early queries but not for the latest. Even we cannot accept certain answers they have sent to me,” said Jayakody.

Speaking further, Jayakody said that it is a huge loss to the corporation as they have failed to recover the rents due to the corporation from the properties that have been leased out.

“What did the Legal Department do all these years without taking action against those who failed to pay the rent?” queried Jayakody.

Jayakody also said that he is under investigations as to how Weligowwa dredging machine has been leased out to a foreign company which is strictly against the law.

“This is a donation and was in perfect working condition when I went to Kirinda to inspect its work. But later they have leased it out to a foreign company which is said to be an underhand transaction with the knowledge of the Fisheries Ministry officials as well,” he added.

However Fisheries and Water Resources Ministry Secretary, Dissanayake said that he did not know that Weligowwa has been leased out but added that it is being hired to private parties when there are no work to be carried out.

“I am not aware that this dredging machine has been leased out to a foreign company. I have to check with my officials and find this out. I thought that this machine is hired only when there is no work to be carried out,” he added.

When asked as to why CFHC has failed to respond to audit queries Dissanayake said that it was due to a ‘mix up’. “Some officials have failed to handover these audit queries to the relevant officers. Anyhow I gave instructions to these officers not to repeat this in future. We have already sent 60% of our answers to the Auditor General’s Department (AGD),” said Dissanayake.

In regard to CFHC’s failure to adhere to Management Services Department instructions, Dissanayake said that since CFHC is managed by a board, there is no necessity to get the cabinet approval if renewing services of those who are on contract basis, although they are over 60 years.

When asked as to what action the ministry could take against the officers who are accused of corruption and those who have failed to follow government guidelines, Dissanayake said that it is the COPE that will take action against these officers.

“It is the COPE that will decide on them. I am unable to answer your questions as I am not aware of most of these things as I assumed duties in this ministry only three months earlier,” he said.
Meanwhile, refuting allegations Chairman CFHC Upali Liyanage said that there is no wrong in getting delayed to answer the audit queries as it is not done purposely.

Speaking on recruiting staff on contract basis and extending services of staff members who are over 60 years, Liyanage said that there is no necessity to obtain cabinet approval to extend the services of these employees and to recruit staff on contract basis because they are on contract basis.

“There is no necessity to get the cabinet approval as they are on contract basis. I am empowered to give extensions without the cabinet approvals. I have not violated Public Enterprises circulars or Public Administration Circulars,” said Liyanage.

Speaking as to why CFHC has failed to recover the rentals from the leased out properties, Liynage said that he could not do anything if the rents were not paid.

“I know I am responsible for all these but what can we do when they are not paying us,” he added.
Responding as to why his corporation has footed the fuel bill for three Fisheries Ministry vehicles, Liyanage said that CFHC is not at fault for this accusation.

“These three vehicles have been used by the Ministry Media Unit. When they visit our 22 harbours in the country to give us publicity we have to pay for the fuel. The media crew travels in separate vehicles and their equipment in another vehicle,” he added.

However Liyanage refuted allegation levelled against him for giving fuel on credit for fishing boats.

“We have never given fuel on credit. This happened before I joined but not now,” said Liyanage.  With regard to Weligowwa machine, Liyanage said that it was the Fisheries Ministry that gave orders to lease it out since the machine was out of order.

“Weligowwa was idling at Kirinda and we had to lease it out as we did not have money to repair it. The Dockyard wanted Rs.8 million to tow it to Colombo. Hence we leased it out to a Korean firm and we will get it back after six years,” he added.

Meanwhile Legal Consultant CFHC Palitha Gunasekera said that he too could not take the blame for not recovering the rents of the leased out properties as he joined CFHC only one year ago.

“We have recovered most of the money which is stated in the audit query. This is a matter with us and the Auditor General’s Department but not the media’s.

We have filed a number of legal actions against those who have failed to pay us the rent. We have submitted all these documents to the auditors. We cannot accept what the AGD says. They are misleading,” he added.

When asked as to why CFHC cannot cancel the lease agreements with those who have failed to pay the rents rather than taking legal action, Gunasekera could not provide an answer.

1 Comment for “Fishery Harbours Corporation In Troubled Waters”

  1. gamarala

    When COPE which is the parliament’s watchdog is unable to institute legal action on the many instances of fiancial mismanagement reported annually by the Auditor General,the political stooges usually appointed to state enterprises know that they are “safe” and carry on regardless.
    Political patronage is destroying economic infrastructure.
    All know, but government lawmakers cannot protest, & opposition lawmakers are helpless.
    This has been happening since the eighties.

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