Committee on Public Enterprises (COPE) Chairman Prof. Charitha Herath said that the annual revenue earned by State-Owned Enterprises (SOEs) should be properly received by the State Treasury.
COPE noted that while the State Timber Corporation had earned an operating profit of Rs. 1.4 billion (1,496,155,864) for 2021, only Rs. 100 million had been transferred to the State Treasury. The COPE Chairman stated that State institutions should be prepared to send a significant portion of their earnings to the State Treasury.
The Chairman made these remarks when the State Timber Corporation was summoned before the COPE recently (22) to examine the Auditor General’s Reports for 2019 and 2020 and to evaluate their performance.
The COPE noted that the Forest Department had granted approval to the State Timber Corporation on June 30, 2020, for the removal of 28,958 pine trees from the Heinford Estate in Weligampola, Kandy, but the trees had not yet been removed. Member of the Committee Mahindananda Aluthgamage, Member of Parliament, stated that the State Timber Corporation could earn a huge profit if it could efficiently remove and export the timber recommended by the Forest Department for felling.
The COPE inquired into the write-off of Rs. 14.4 million worth of debtors by the Corporation without the approval of the Treasury. The officials said that the decision was taken by the then Acting Board of Directors in 2007 with the approval of the Corporate Audit and Management Committee. The COPE Chairman said that since the Secretary to the Treasury is in charge of the Consolidated Fund for Public Debt, if the debtors are cut off, the Chief Accounting Officer should inform the Secretary to the Treasury and obtain permission.
The COPE, which met in 2012, directed that the losses at the Kaldemulla Furniture Factory to be increased to profit, but the COPE noted that it was still in a loss-making condition.
The COPE Chairman inquired as to what was the need to maintain the relevant institution at such a loss. The Chairman further stated that the furniture outlets owned by the Corporation as a whole have incurred huge losses. The Auditor General stated that the wastage of large quantities of timber in the production of furniture has been observed as a reason for these losses and that by-products of discarded timber can reduce this loss to some extent. Officials said that this was due to the lack of employees with proper knowledge of furniture manufacturing and the need to compete with the private sector in the market. However, it was revealed that the major shortcoming of the State Timber Corporation was not producing furniture. The Chairman instructed the Secretary to the Ministry to send a report within a month on the future course of action to be taken in consultation with the relevant officials.
The meeting was attended by Members of Parliament Mahindananda Aluthgamage, Jagath Pushpakumara, Harsha de Silva, Eran Wickramaratne, Indika Anuruddha, Sagara Kariyawasam, Madhura Withanage as well as the Secretary to the Ministry of Wildlife and Forest Conservation and officials of the State Timber Corporation.
