7 February 2020 09:45 am Views - 364
By Nishel Fernando
Cabinet of Ministers has approved a proposal to present a resolution to Vote on Account (VoA) in Parliament to settle arrears and to finalise the accounts for ‘out-of-the-books’ expenses incurred in relation to implementing projects utilising external financing resources by the previous regime.
Making a special statement in Parliament on Wednesday, Prime Minister Mahinda Rajapaksa, who is the Finance Minister revealed that an additional allocation of Rs.156 billion is required to settle arrears to various contractors and suppliers, including Rs.101 billion for unsettled recurrent expenditure and Rs.55 billion for unsettled capital expenditure.
Further, Rs.211 billion is also required to finalise the accounts for expenses borne in implementing projects using foreign loans.
“A resolution will be presented to Parliament to make changes to the VoA in order to clear the arrears, which were not provided for in VOA originally,” Treasury Secretary Sajith Attygalle told Mirror Business.
He noted that although Rs.211 billion was borrowed from foreign sources, there was no record of allocation of these borrowings.
Therefore, the government will seek Parliamentary approval to increase the debt ceiling from Rs.721 billion to Rs.1, 078 billion to record these borrowings and to obtain funds in order to settle arrears to various contractors and suppliers.
The previous government allocated Rs.1, 474 billion through a VOA to cover government expenditure for the period January 1, 2020 to April 30, 2020 due to the presidential election.
However, Prime Minister Rajapaksa said the funds allocated on VoA were exhausted by November 20, last year.
The unsettled payments include Rs.45.8 billion due to banks for senior citizens’ interest subsidy, Rs.18.4 billion owed to highway contractors, Rs.6.8 billion for contractors of ‘Langama Pasala Hondama Pasala’ projects, Rs. 25,696 million due to suppliers of medicine and services obtained for the health sector and Rs.23.9 billion owed to fertiliser suppliers.
Gunawardena noted that some construction firms are facing the risk of losing their collaterals due to late payments while facing financial difficulties due to delayed payments.
He blamed that the financial mismanagement and inefficiency of the previous government for the failure to settle these overdue payments.
Prime Minister also revealed that the budget deficit had shot up to 7 percent of GDP from the targeted 4 percent as State revenue had recorded a sharp shortfall of Rs.600 billion.