Cement Corp. suffers massive losses: AG report

The Sri Lanka Cement Corporation suffered a loss amounting to Rs.1,229 million due to management inefficiencies and uneconomic transactions, Parliament was informed today.

The Auditor General report for 2009, revealed that the Corporation had invested Rs.1,083 million in the Lanka Cement Limited with no returns for the Corporation right from the beginning.

In reply to the audit query in this regard, the Corporation has said this company ceased operations in 1990 due to the war situation in the north.

A similar investment of Rs.4.8 million had been made in a private company with no returns for the cash strapped Corporation.

Though the cement factory in Kankesanthurai ceased operations in 1990, the Cement Corporation has paid Rs.17 million as salaries to 72 employees. The Auditor General has cited this as an uneconomic transaction. Also, it is observed that a corporate plan was worked for the 2006-2010 period, but no progress has been made to achieve the targets set. The management of the Corporation has responded to the Auditor General saying that although every possible effort was made to achieve the targets, there were obstacles that were beyond the control of the Corporation during the year under review.

However, the Corporation has failed to respond to the query about the uneconomic transaction of Rs.17 million incurred in the payment of salaries to the employees of Kankesanthurai.

Besides, the report said that Rs.23 million had been paid as demurrage charges to the port due to the failure to handle the import activities properly. The Cooperation’s Chairman has replied that he has taken steps to minimise such expenses hereafter. In another instance, 777 cement bags valued at Rs.463,637 had been damaged in the loading, uploading and transportation. (Kelum Bandara and Yohan Perera)