In the latest of the blazing crisis after crisis or scandal after scandal over fuel imports, a five-year battle between the Rajapaksa regime and the Standard Chartered Bank over flawed hedging deals has ended in somewhat of a disaster for Sri Lanka with the Government agreeing to paying US$ 60 million (Rs.7.5 billion) to settle the dispute.
The SCB’s Chief Executive Officer Anirvan Ghosh Dastidar told our sister paper the Sunday Times over the weekend that the money was paid to the bank by the Ceylon Petroleum Corporation (CPC) after a commercial decision was reached to resolve the long-standing dispute. Ministries such as Environment, Technology and Research, Foreign Employment, Fisheries and Rehabilitation received much less than the amount paid to the SCB. Even for a vital subject such as Education, the allocation is Rs. 37.9 billion and Higher Education Rs. 27.9 billion.
Our sister paper also quoted well-informed sources as saying the SCB was unlikely to get involved any more in hedging contracts on any commodities with the Government because of the 2008 oil deal which was badly mishandled and resulted in the loss of billions of rupees in public funds.
The CPC is facing similar problems with several other banks and how much more the country will have to pay is still not known. On the SCB deal the Supreme Court had ruled that payments need not be made but the bank sought international arbitration.
UNP Parliamentarian and economist Dr. Harsha de Silva has called for a full probe to identify all guilty parties and said they should be dealt with in the strictest possible manner. He and other independent economists believe that Treasury Secretary, P. B. Jayasundara and Central Bank Governor Ajith Nivard Cabraal are among those responsible for these multi-million dollar losses to Sri Lanka because of the flawed hedging deals. In fact the Supreme Court during the tenure of the controversial Chief Justice Sarath N. Silva severely reprimanded the Treasury Secretary for the damage he caused and directed that he be removed from his key post. This was done, but only for some time. The decision was revoked by the Supreme Court when Justice Asoka de Silva took over as Chief Justice and Mr. Jayasundara today is not only back in his post but is playing a bigger role working out economic development policies and financial allocations.
Sri Lanka or any other country obviously cannot control world oil prices. But the Rajapaksa regime must act immediately to stop corruption and fraudulent deals by the CPC and others involved in oil imports while effective steps are also taken to reduce fuel consumption.
We need to go clean and go green. If government leaders, other politicians, religious leaders and others holding high positions set an example in reducing fuel consumption, the people also are likely to take steps to reduce their carbon footprints. If the example comes from the top more people are likely to use public transport instead of private vehicles. For instance the thousands of vans used to transport children to school could be reduced to a fraction if an effective school bus service is worked out between the Sri Lanka Transport Board and the school authorities. If 300 CTB buses are brought in instead of 3000 school vans, then fuel consumption, air pollution and traffic conjestion could be reduced to significant extent.