Net worth of CPC erodes by Rs. 200 bn in two years – UNP

The Ceylon Petroleum Corporations (CPC) net worth had eroded by an estimated Rs. 200 billion in the past two years, an Opposition legislator said yesterday.With loss in capital alone accounting for Rs. 200 billion, the CPC was bankrupt and would cease to be a going concern, unless the Treasury came to its rescue once again as it had done time and again in the case of SriLankan Airlines, Mihin Air and the Ceylon Electricity Board, Financial Analyst and UNP MP Eran Wickremeratne


told The Island.The CPC has not tabled its audited accounts in Parliament since 2009. Recent contaminated fuel imports alone had resulted in losses of over Rs. 300 million, Wickremeratne said, adding that fuel had been sold to a private company at a loss in excess of Rs. 450 million.

Wickremeratne noted that the Auditor General had questioned the violation of standard tender procedures. In one instance the tender had been advertised on Friday and closed the following Monday, he said.

The staggering losses due to low quality fuel imports, corruption and hedging contracts, the MP said, should be investigated by the Cabinet of Ministers without leaving it to a three-man team appointed by the subject minister.

The open tender procedure had been violated in the past on the grounds that government to government transactions gave a better return to the country. But that was not true. It was an open secret that payments to overseas public officials to procure business was practised in many countries. The only way to save foreign exchange was to have a transparent and competitive bidding process, he observed.

Wickremeratne said that poor management, corruption and losses in state owned enterprises were like cancers, and they put the country’s banking system also at risk.

The Bank of Ceylon’s foreign currency letters of credit and loans exposure to the CPC was in excess of 60 percent of the total foreign currency exposure of the bank. Unless the government plucked up the courage to restructure the state owned enterprises which would include tackling rampant corruption amongst its own ranks, the badly managed and corrupt state owned ventures would eventually destroy the banking system, he warned.