CPC, CPSTL staff default billions of rupees obtained as loans
The Ceylon Petroleum Storage Terminal Ltd (CPSTL) and Ceylon Petroleum Corporation (CPC) are now facing serious financial consequences as a result of defaulting loans taken by its employees, a recent Auditor General’s report exposed.
This was in addition to massive loss and debt running up to billions of rupees by the CPC and the CPSTL due to honouring high prices by the limited suppliers with the rise in international oil price.
The CPC recorded an accumulated loss of Rs.1,051 billion at the end of August 2022 associated with high-risk turmoil.
This has resulted in the interruption of competitive procurement process of petroleum products with increasingly unsettled Letters of Credit by banks due to the financial turmoil in the country.
Both CPSTL and CPC employees have obtained loans from a number of loan schemes introduced and operated by the two entities.
The total outstanding loan balances were Rs. 3.36 billion and 4.31 billion respectively up to 2021/2022 financial year, the inspection revealed.
Even though a significant loan portfolio had been maintained by the entities, no proper financial policy had been established in relation to the management of the loan portfolio.
It was observed that the employees have to work overtime due to the fact that their basic earnings are not enough to pay the loan instalments and other expenses.
Accordingly, more than 40 per cent of the total employees of the corporation and more than 50 per cent of the total employees of the company are compelled to work overtime exceeding 50 per cent of their basic salary.
As a result of the implementation of inappropriate loan schemes regardless of the ability to repay the loan, employees were tempted to take loans, which directly affected the unnecessary increase in overtime expenses of the organisations Auditor General’s report observed.
CPSTL and CPC have 4,200 employees where only 500 are required, and a sum of Rs. 3 billion has been paid as overtime for the workers at the petroleum refinery at Sapugaskanda during the year under review (2021/2022), the report said.
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