Infrastructure led growth unsustainable – PM

Staff Writer

Colombo (News 1st) – Prime Minister Ranil Wickremesinghe said at an event that “infrastructure led growth is not sustainable in the long term.” He added that this has resulted in an ever-increasing debt service burden.

The Prime Minister went on to say: “I have no intention of doing a reform but what else can you expect when you cannot distinguish that the Central Bank’s duty is to audit the central government debt”. The Prime Minister also stated “that the Auditor General’s duty is to audit the debt of the Republic of Sri Lanka, which is much larger with state-owned enterprises, provincial councils and the local authorities. Then if we act in that ignorance this has to be expected.”, PM Wickremesinghe added.

When News 1st contacted the Auditor Generals department for comment, they stated the Central Bank is the Government’s broker when it comes to borrowing money for the Government using the least cost method. The Auditor Generals department questions how can the Central Bank audit the loans they have obtained? The Auditor General’s Department also says the country is yet to establish a system to audit foreign loans.

Based on the comments made by the Auditor Generals department, the Prime Minister’s statement is misleading and far removed from the factual position.

The Central Bank has no role to audit the national debt. The role of the Central Bank is to ensure the stability of prices and the marketplace, in addition to ensuring the stability of the financial system of our country. The Auditor General and his department have a most specific function in this country. It is the auditor general who is charged with auditing all government debt, including those of state-owned enterprises.

What has been made fundamentally clear is that the Central Bank, given the spate of scandals, should be subject to the purview of the Auditor General’s Department.

Whilst the Prime Minister now publically states he is unaware as to the reason why infrastructure led development was used it is his own Minster Kabir Hashim as the Minister in charge of Highways presented a paper asking to raise Rs 20 billion to fund Highway projects.

Eventually, this led to the infamous bond scam involving Perpetual Treasuries and several government ministers and members of parliament.

Further, it is the Prime Minister who signed off the documents authorising the raising of USD 900 Mn for the Central Expressway phase three project. And it is Minister Lakshman Kiriella who broke with traditions and broke the procurement guidelines and conducted meetings with the contractors causing a breach of due process. Additionally, it is unsurmisable as to why large amounts of money were spent on the Rajagiriya Flyover which has failed to abate traffic.

The fact there are infrastructure projects that have been initiated and loans obtained for, it is unclear as to why the Prime Minister who has stated, he does not understand why there is infrastructure led growth, is continuing to approve such projects and increasing the national debt burden.

Sri Lanka’s national debt stood at over Rs 10.269 Trillion as of 18th April 2018.