Sri Lanka state bus ‘service’ exposed; rulers wash shocking SOE dirty linen
ECONOMYNEXT – Shocking details of how a state-run bus company is operated for the benefit of the elected ruling class and state worker unions, while ordinary people are footing the bill running into billions of rupees, have been revealed in a parliamentary debate.
Sri Lanka Transport Board has 14 billion rupees of debt and unpaid dues, is heavily overstaffed and guzzling a billion rupees a month in people’s money to pay salaries, Transport Minister Nimal Siripala de Silva has revealed in parliament.
SLTB is a key political darling of the elected ruling class with politically-connected trade unions and Janatha Vimukthi Peramuna, a pro-state party, resisting previous efforts to reform or privatize the cash-guzzling agency and reduce its burden on the people.
The bus agency had been a heavy burden on the people for years, with tens of billions of people’s taxes being injected to keep it running. In 2013 it lost 10.6 billion rupees and in 2014 it lost 9.4 billion rupees.
The bus company claims to be ‘service’ to the public, but the key beneficiaries of its ‘services’ were revealed in parliament this week, showing why legislators want to build and keep state owned enterprises.
Money is usually siphoned out of SOEs by loading them with henchmen, directors, advisors and also through procurement fraud.
Former Transport Minister Kumara Welgama said Minister de Silva was going around saying that he had stuffed the SLTB with people.
By December 31, 2014, SLTB had 34,763 employees and over two years there had been an increase of 957 workers, the bulk of who were drivers, conductors and mechanics, Welgama said.
"To run the buses drivers, conductors and mechanics are needed," he claimed.
Serving the electorate
The new ‘Yahapalanaya’ administration had hired 748 people in to the SLTB in the five months up to May 31, 2015 and there were now 35,510 employees, Welgama claimed.
Minister De Silva said 5,440 buses were operated each day at the moment, indicating that there were seven employees for each bus.
Minister De Silva retorted that while people may have been hired as conductors and drivers, they had no work and 1,890 ‘conductors, drivers and mechanics have been made into as ‘clerks’ or ‘depot inspectors’ instead.
He said that in 2010, 864 people; in 2011, 2,829 workers; in 2012, 1,559 workers; in 2013, 1,824 workers and in 2014 a whopping 3,548 workers had been hired.
During the ‘Yahapalanaya’ administration 1,708 persons had been hired during nine months, he said, which is higher than the number claimed by Welgama for five months.
"But during my time no one was hired," he said. De Silva said he will not mention the home towns of the people hired into the SLTB.
"When he was health minister, people who came to the hospitals in our area, to Nagoda, to Mathugama were from Badulla," Welgama retorted. Minister de Silva represents from Badulla.
"If there is a member of parliament who cannot help his area, I do not think there is any of such a legislator," he said.
Minister de Silva said all administrations had mis-used the state bus company.
"This is what both administrations had done," he said. "This year each month the government is giving 1,000 million rupees to pay the wages of SLTB."
When parliaments started in Europe, tax payers voted and elected representative made sure that the king used the taxes wisely not to divide them up to special interest groups or their henchmen.
However legislators in Sri Lanka now do not even pay the tax on their cars, while imposing massive taxes on the people.
Sri Lanka’ state enterprises as well as the public service are notorious for being stuffed with political henchmen and unemployed graduates. Unemployed graduates use their brains to agitate for state jobs and become tax-spenders for life.
There were 55 graduates with no work at the SLTB, ex-minister Welgama said.
Welgama said there was a manager who was sacked for selling 29 engines during his time, and a powerful union leader was now attempting to re-instate him and pay back wages of 4.7 million rupees.
Welgama denied charges that commissions of 10,000 dollars per bus had been taken from a 2,200 bus deal made with Ashok Leyland.
He said in January 2014, the SLTB had 4367 buses. About 2,453 buses could not complete their journey due to mechanical defects. Only 1917 could complete their rounds.
That is why he bought new buses, he said.
Charges of procurement corruption is rife at all state agencies and at the moment there is growing storm over alleged attempts by Sri Lanka Telecom to buy a mobile firm at an inflated price.
Welgama said he had bought 2,200 buses during his time mainly on supplier’s credit with only a part of the money coming from the Treasury and he expected to pay it back with revenue from operating the buses.
De Silva said whatever the claims made, the Treasury was now giving a billion rupees a month to pay the salaries of SLTB workers.
Welgama charged that about 150 of the new buses had already crashed or were off the road because engines had seized due to bad management.
"This was because of bad maintenance and not changing oil on time," he said.
"When I was there I went into the garage and checked. This cannot be from an air-conditioned office. he said laying claim to remarkable micro-management skills and usage of ministerial time perhaps not found in ministers of most countries.
" You have to get down go, (bahalar yanna owner) then only the engine seizing will stop."
De Silva said whatever the claims made, there was now 10.751 billion rupees of Employees Provident Funds payments in arrears, 2.409 billion rupees in gratuity owing and 45 million in ETF.
No steps were taken to pay the EPF dues for five years, he said. Now the directors were getting warrants from court, he said.
Unpaid dues for re-built tyres were 394 million rupees, Steel Impex was owed 237 million, Nimbus 107, CEAT-Kelani 107 million, the Attorney General was owned 33 million, Ceylon Petroleum Corporation and others totalling 14.315 billion in unpaid dues.
Welgama said revenues of the SLTB buses were falling.
Minister De Silva said people were now buying three wheelers and motor cycles and abandoning buses, leading to revenue losses, which was not his fault. (Colombo/Dec10/2015 – corrected – monthly payment to SLTB is 1,000 million rupees)