Govt. dilemma in allocating 672 new vehicles to state entities
Sri Lanka’s transitional government is in a dilemma in allocating 672 more vehicles for new ministries and state institutions which has delayed clearance of these vehicles and lying in the backyards of four main motor traders for the past five months.
Motor traders said that the failure to clear these vehicles out of an order book for the state for 1665 vehicles has pushed the traders into financial constraints and maintenance problems. Earlier the balance 993 vehicles were cleared by state authorities and allocations made.
The vehicles including double cabs, motor vehicles, ambulances and vans were imported in December 2014 by Mitsubishi, Nissan, Micro and Toyota motor franchise on behalf of the government by opening LCs in commercial banks under a leasing plan of the Treasury for government institutions.
The allocation of these vehicles for ministries and state institutions is yet to be finalised by the government as these vehicles were imported by motor traders on purchase orders issued by the Treasury during the previous regime, official sources said.
The procurement of vehicles for Ministries, Departments, Provincial Councils and Government agencies will be made through payments from the Consolidated Fund.
The Department of National Budget has negotiated with the Bank of Ceylon and the People’s Leasing Company, a subsidiary leasing company of People’s Bank (PLC), on the terms and conditions of the leasing arrangement relating to purchase of vehicles in accordance with guidelines on procurement of vehicles, official sources disclosed.
The offer was made to four motor traders by the previous regime calling for bids, a few months before the presidential elections, they said. The Finance Ministry made delivery orders for 993 vehicles and cleared those vehicles from the yards of importers to partly fulfill the requirements of the government entities, but it had yet to take delivery of 672 vehicles, Chairman of Ceylon Motor Traders Association spokesman told the Business Times.
The decision to import these vehicles was taken with the aim of replacing all old vehicles used by ministries and state institutions during the Rajapaksa government and the new vehicle allocation was made in accordance with the requirements at that time.
The present government has pruned the number of ministries curtailing additional recurrent expenditure and suspending the importation of vehicles and other items for ministries in a circular issued by the Treasury in January this year.
Under these circumstances, the new administration is in a catch-22 situation in allocating the balance vehicles among state institutions, official sources said adding that the Treasury is waiting for a directive from the Finance Minister to make delivery orders after ascertaining further vehicle requirements of ministries and state institutions.
He noted that these vehicles could face corrosion keeping them at the yards without using it. The importers of these vehicles are urging the government to take prompt action to clear the vehicles soon. ”These vehicles cannot be sold to anyone else, because they were imported in favour of the Ministry of Finance for government requirements with duty waivers,” he pointed out.
Traders have to bear the interest for credit and cost for maintenance of the stocks and they have already made losses as a sresult of the government’s failure to clear the vehicles, he added.