Sri Lanka’s Finance Minister Ravi Karunanayake last week said the Ministry of Finance and Planning will take legal action against those responsible (in the former regime) of concealing state liabilities with the Ministry having already made police complaints.

Addressing a press conference held at Sirikotha, Minister Karunanayake said about 81% of the total hidden liabilities of Rs.1.1 trillion uncovered by the new government came from loans taken by three state-owned enterprises, namely SriLankan Airlines, the Sri Lanka Ports Authority and the Ceylon Petroleum Corporation.

Karunanayake said a team from the International Monetary Fund (IMF) had helped the government do a forensic audit to unearth the hidden liabilities and find out the true state of the island’s finances.

The rest of the liabilities had been incurred by about a dozen other state institutions.
“The former president Mahinda Rajapaksa did build up infrastructure but has left tax payers with huge debt repayments with many infrastructure projects, like the Hambantota port and Mattala airport, not generating any returns,” Karunanayake said.

“Although Rajapaksa claims the Hambantota port cost 55 billion rupees, our books show the first phase alone cost 79 billion rupees,” Karunanayake said. “What happened to the balance?”

“While Rajapaksa says the Mattala airport cost 25 billion rupees, the cost shown in our accounts is 46.8 billion rupees. Into whose pocket did the balance go?”

Likewise, while Rajapaksa claimed the Katunayake expressway cost 35 billion rupees, government accounts show it cost 49 billion rupees, he added.

A stock of rice imported by the former regime at 75 rupees a kilo had to be sold in the wholesale market at 45 rupees a kilo, incurring a loss of 40 percent, Karunanayake added.
Meanwhile, former President Mahinda Rajapaksa issuing a statement last week said the allegations, that there are undisclosed loans and liabilities of his government which are only now coming to light, were complete falsehood.

“State-owned enterprises engage in commercial activities and they have their own dealings with banks. Borrowings by state entities are governed by their respective acts of parliament and have to be approved by cabinet. Such borrowings are paid back from their own revenues. Some loans may be guaranteed by the Treasury and in such event are reported to Parliament,” Rajapaksa said.

Addressing a public rally on Thursday, the Former President also challenged the government to not pay for the dues they felt were not officially recorded.