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UDA losses since 2006 total Rs. 1,230 million: Auditor General
The Urban Development Authority (UDA) continues to incur losses since 2006 with accumulated losses amounting to over Rs 1,230 million by 2011, a report by the Auditor General presented to Parliament this week revealed.
And even though the Authority had realised a profit before tax of Rs242 million in 2011, the profit was due to a receipt of Rs 532 million from the General Treasury, the Audit report said.
The UDA Chairman, in response to this observation, said that, even though the UDA continues to incur losses from 2006, it has been able to minimise the net loss in 2010, relative to 2006, and to reduce the Administration and Operational cost by a large amount, and generate a profit at the end of 2011, by improving the income through the implementation of proper Administration in the Authority within 2011.
The Auditor General has also made note of several other financial losses running into millions of rupees incurred by the UDA over the years.
In one instance, the UDA had issued debentures amounting to Rs. 10 billion redeemable in five years, in October 2010, with a view to obtaining funds for the national programme, on the construction of 60,000 permanent houses for shanty dwellers in Colombo City. The General Treasury had guaranteed their redemption and payment of interest for a period of three years. A sum of Rs 1,097,197,364 should have been paid for 2011 as debenture interest, and a sum of Rs 532 million out of that amount had been reimbursed by the General Treasury to the Authority.
The Auditor General also noted that even though the Authority had been informed by the Attorney General in writing, that the UDA was not authorised to establish a company for managing rest houses, the Authority had established a company named UDA Rest House, exceeding its legal powers. The Company had been renamed as Lanka Rest House Company with effect from Nov.15, 2010.
The Auditor General also said that no action had been taken to pay Rs 406,483,000 to a Company on behalf of the “Waters Edge Hotel”, which was vested in the Authority in 2008, according to a Court decision.
The UDA Chairman said in response to this, that the “Waters Edge Hotel” was vested in the Authority on a Court Decision in 2008, where it was mentioned that the compensation of Rs 406 million be paid to the relevant company, for the value of the buildings, and should be paid by the UDA or the Government. However, as the final decision has not yet been taken whether the compensation payment is made by the Government or the Authority, the compensation will be settled on that decision.
The Auditor General in his report has said that special attention should be paid to Personnel Management, Issue of Permits for Development, Accounting of Income, Recovery from the Debtors and obtaining advances from the Customers in the future.