Maga Neguma owes Rs.1.2 billion to contractors

16 November 2011 09:08 pm Views - 6348

Maga Neguma, the state owned enterprise involved in infrastructure development, has defaulted a massive Rs.1.2 billion to some contractors who carried out road construction work in certain areas of the southern province, the parliamentary Committee on Public Enterprises (COPE) has revealed.

The COPE, during its proceedings last week, examined the account and audit reports of Maga Neguma, and found financial malpractices running to billions of rupees.

In one such example, Maga Neguma has not reimbursed some Rs.1.2 billion to the contractors who did road construction work mostly in the Hambantota district.

A COPE member said Maga Neguma had evaded this payment for more than a year now, and the affected contractors were reluctant to protest fearing victimization by the government in the award of future contracts.

Some of the affected contractors include R.M.K. Constructions; N.K. Constructions; Senura Engineering; Kesara Engineering Company Pvt. Ltd; Gallage Constructions; Ranjith Builders; Ruwan Builders; Mahanama Constructions; L.H.K. Constructions; S.H.S. Constructions; Araliya Builders and Liyanage Builders.

“We learnt that some of these contractors have paid huge commissions to certain politicians. They are unable to speak against this injustice openly. If they speak, they will be harassed in various ways,” he said.

He said COPE could not make inquiries from Maga Neguma Chairman Jaliya Kulasekara because he had been sick the past few days.

“Maga Neguma officials even refused appear before COPE meetings. They even produced letters from the Attorney General’s Department to support their argument that the COPE has no powers to probe them. However, we were able to summon them before the committee,” the COPE member said. 

The government set up three separate companies – the Maga Neguma Road Construction and Equipment Company Ltd; Maga Neguma Construction and Project Management Services Company Ltd and Maga Neguma Emulsions Productions Co. (Pvt) Ltd., to carry out infrastructure development work under the Maga Neguma Project and transferred the assets of the Road Construction and Development Corporation (RCDC) to these three companies.

The COPE member said that Maganeguma authorities had not submitted their account reports for auditing by the Government’s Auditor General for the last few years. 

COPE is expected to complete its proceedings next week and submit the report to Parliament on December 1, 2011. (By Kelum Bandara)