COPE finds more bad loans granted to LG bodies
Feb 9, 2013

The parliamentary Committee On Public Enterprises (COPE) which resumed its sittings last Wednesday said it had found how millions of rupees in public funds had been wasted by granting loans to local government bodies without collateral or a mechanism to recover them, a parliamentary source said yesterday. The funds released by the Treasury had been granted to local government bodies headed by ‘our chaps’ by a fairly unknown ‘Local Loans and Development Fund’ (LLDF) under the Ministry of Finance and Planning.

For instance, the LLDF had to recover loans amounting to Rs.567 million which had been given to 21 local government bodies up to December 31 last year. The source said these figures were revealed in a report submitted to COPE by LLDF acting chairman W.M.P.G. Wickramasinghe.

COPE found that only Rs.3.3 million with accrued interest had been recovered by the LLDF of the total amount of loans disbursed under the ‘Urban Development and Low Income Housing Projects’.

Only the Anuradhapura Urban Council, Badulla Municipal Council, Gampaha Urban Council, Matale Municipal Council and Matara Municipal Council had re-paid even a small part of their loans and 16 local government bodies had failed to pay back even a cent at the time COPE summoned the LLDF officials.

“The actions by the LLDF came under heavy criticism of COPE members and its Chairman and Senior Minister D.E.W. Gunasekara who instructed officials to take action to recover the loans with interest from local government bodies as early as possible,” the source said.

Loans had been granted through the Urban Development Authority (UDA) for various projects launched by local government bodies such as construction of low income family houses, infrastructure development and crop development projects etc.

The LLDF has requested the Treasury to write off Rs.1,888,754 released as loans to seven local government bodies in the North.

Mr. Wickramasinghe admitted that the responsibility for recovery of loans remains with the LLDF but that the loans were given without the consent of the LLDF and there were no guar- antee of repayment.

The source pointed out that loans had been released to local government bodies run by the UPFA members and the LLDF had failed to take any meaningful action to recover these loans.

Source: Daily Mirror - Sri Lanka

comments powered by Disqus