COPE calls for business model suitable for Lanka Sathosa to make it profitable

The Committee on Public Enterprises (COPE) has informed the officials of Lanka Sathosa Ltd to prepare a comprehensive plan up until 2028 and report on its activities within 2 months while also instructing to prepare an action plan for the state-owned retail network business.

Lanka Sathosa Ltd was called before the Committee on Public Enterprises recently under the chairmanship of Member of Parliament (Prof.) Ranjith Bandara.

Here, attention was drawn towards the fact that a concrete plan for 2021-24 was in place but it was not approved by the Ministry, the Communications Department of Parliament said. 

Thus, the Committee Chair informed the officials to prepare a comprehensive plan up until 2028 and report on its activities within 2 months. He further instructed to prepare an action plan.

Attention was also directed towards internal audit queries not being done properly. It was discussed that although there are 21 internal auditor staff, only 3 audit queries have been submitted for the year 2021 and none for the year 2022. 

Moreover, attention was drawn to the auditor’s difficulty in obtaining information regarding the company’s accounts. Accordingly, the Auditor General also informed that the Internal Audit Department should be notified in this regard through an internal circular.

The statement said that during the meeting, a decision was reached to discuss separately the loss of Rs. 6 billion due to the importation of rice.

It was disclosed that during 2014-2015, there was a loss of Rs. 6 billion due to the importation of rice through Lanka Sathosa. It was also discussed that the imported has been sold for animal feed due to expiry. 

A report has been prepared by the Auditor General regarding this incident and thus it was decided at the Committee to discuss this matter in the future, the release said.

The Chair also said that the loss of Lanka Sathosa in 2022 is close to Rs. 600 million. It was also discussed that the total loss by December 31st, 2021 is close to Rs. 15 billion.

It was discussed in the Committee that instead of importing and selling goods, Lanka Sathosa has missed the opportunity to sell goods at a lower price to the customer and gain more profit for the company by buying and selling goods from the Pettah.

Furthermore, the officials explained about the loss due to the delay in receiving money even though the goods are imported based on the policy decisions taken by the government.

The COPE Chair emphasized the need to prepare a business model suitable for Sathosa. The Auditor General also pointed out the internal administrative weaknesses as well as the need to establish this institution under a business model that can make decisions independently without external interference.

The Committee also emphasized the need to attract more customers to Lanka Sathosa stores.

It was revealed that there are 1,123 employee vacancies in the institution and the Auditor General pointed out the need for a re-evaluation before filling those employee vacancies.

It was also decided to re-summon Lanka Sathosa on August 22nd.

Members of Parliament Mahindananda Aluthgamage, Dayasiri Jayasekara, Nimal Lanza, Jayantha Samaraweera, S. M. M. Muszhaaraff, S. M. Marikkar, Sanjeeva Edirimanna, Shanakiyan Rasamanickam, Madhura Withanage, (Prof.) Charitha Herath, were present at the Committee meeting held.