That 2,200 Bus Purchase Deal

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Yesterday this newspaper carried a story under the heading ‘80 imported buses lying idle at Panagoda yard’, with a strapline, ‘Allocated to transport schoolchildren’.

It read, “Despite receiving Cabinet approval, 80 imported buses designed to transport schoolchildren have been parked at a Homagama Panagoda vehicle yard for the past seven years without being used.

Transport Minister Bandula Gunawardena said, during an inspection of Ashok Leyland’s vehicle yard in Homagama, that the company imported 80 buses specially designed to transport schoolchildren seven years ago with Government of Sri Lanka collaboration.

Upon checking, it was found that these buses were a part of 2,200 buses imported from the above Indian vehicle manufacturing company, which has a branch office here, sans tender call, in June 2014, during Mahinda Rajapaksa’s Presidency. Minister Gunawardena was then Education Minister and the Transport Minister was Kumara Welgama.

Nearly four years later, in a statement dated 28 January 2018, Auditor General Gamini Wijesinghe, commenting on this purchase, said, “In 2014 Sri Lanka Transport Board (SLTB) purchased 2,200 42 and 54 seater buses from Ashok Leyland of India at a cost of US$ 72,520,000 (Rs 10,331,775,516) without calling for tenders.

Instead, purchase had been made after being evaluated by a committee appointed by the Cabinet, based on the bid forwarded by a single supplier. Furthermore, in accordance with this lease agreement dated 16 May 2014, the 2,200 buses should be supplied within a period of six months from the date of forwarding the letters of credit, whilst demurrages of 0.01 per cent should be charged in case of a delay as per a condition of the agreement.

Nevertheless, of the total number of buses that the supplier had agreed upon, only 1,900 buses had been supplied on time, while the rest of the 300 buses had been supplied after a delay of one month and 21 days, but demurrages for delay amounting to Rs 146,800 had not been  recovered  thereon as had been mentioned in the agreement.” 

The Auditor General’s comments are found in SLTB’s 2014 Annual Report lodged on the Parliamentary website as late as at 9 January 2019, ie four-and-half years after the bus deal was executed, in June 2014.

Meanwhile, the Auditor General’s report on the SLTB  financial performance for 2019 said, “According to the agreement entered into in the year 2014 to purchase 2,200 buses on  a five-year credit basis, payments on those buses should have been made in full within the period of  five years, but  payments had not been made until March 2020.

As the loan period had been exceeded and due to the failure in regularly paying the instalments on a quarterly basis, an interest of Rs. 419,237,588 (Rs 419.2 million) had been paid on the delay. According to the agreement, a sum of US $ 72,620,000 ($ 72.6 million) should have been paid for 2,200 buses, but the Board had sustained a loss of Rs 1,788 million (Rs 1.8 billion) following the devaluation of exchange rates. Accordingly, the Board had sustained a loss of Rs 2,207 million (Rs 2.2 billion) due that agreement thus indicating an average loss of Rs one million per bus.”

The Auditor General’s report, on the above bus purchase, is only a glimpse of the fiduciary misconduct that took place at the highest level during Rajapaksa’s over nine-year ‘governance’ from 17 November 2015 to 8 January 2015 that ultimately resulted in Sri Lanka declaring itself bankrupt five months ago in April. Rajapaksa is currently the SLPP leader and MP in a Parliament dominated by the SLPP.

Nonetheless, UNP leader and President Ranil Wickremesinghe, who, like the three proverbial monkeys ‘sees no evil, speaks no evil and hears no evil’, governs the country in an environment where, like a volcano, it is waiting to erupt at any moment, more ferocious than the eruptions of ‘9 May’ and ‘9 July’, which could be stopped/stayed, only if immediate remedial measures are taken. ‘Nero fiddles while Rome burns!’