Editorial

The Auditor General’s findings on the botched, if not corrupt, coal tender have further tested and eroded the credibility of the governing party while raising the profile and reputation of the department – the National Audit Office (NAO).

The appointment of the head of the NAO became a controversial issue not long ago. Political chess games between the President and the Constitutional Council saw numerous nominees of the President for the job being rejected by the Council. Eventually, a new Council approved the President’s nominee (who is the present incumbent), ignoring a request for someone else from the High Priests of Kandy, leading to some consternation that the appointee was going to taint the long-held reputation of the NAO as a professional, independent body that audits public-financed institutions. Its report on the coal tender proves otherwise.

Hats off, therefore, to the NAO for coming up with an audited report on the coal tender that is timely and now part of the debate on the controversy based on proven facts. It has embarrassed the ruling party, but the NAO is not there to please the government. In its report it has pointed out a series of deficiencies in the tender.

Among the more serious are;

• Flawed supplier registration and selection: The Lanka Coal Company relaxed its supplier registration criteria to unacceptable levels, allowing companies with a history of supplying coal at or near the rejected Gross Calorific Value (GCV) to qualify. The selected supplier had not even paid the full fee by the bid notice date. The procurement contract was signed even before the Attorney General’s consent was granted.
• Standard coal quality and uncredited testing: The coal supplied consistently failed to meet the GCV standard and, in some cases, was below the absolute rejection threshold. The inspectors appointed were not properly accredited to test coal samples.
• Severe operational impact: Due to the low-quality coal, the power plant was unable to generate full capacity, causing damage to the plant.
• Massive financial losses: The estimated loss stands at Rs 2,237.7 million (Rs 2.23 billion).
• Delivery delays and emergency procurement: The severe delays caused the company to initiate an order of 300,000 metric tonnes from a supplier that had previously failed to meet the rejection threshold.

What was a ‘spotless white’ image of the ruling party when it assumed office, now has soot all over it. The New Age politicians who pledged from every platform, they would cleanse the corrupt political system are found wanting on their promises; torn between the traditional politics of defending ‘their man’ come hell or high water and maintaining their holier-than-their-predecessors’ image at the same time.

This was best showcased when the party defended the Energy Minister during the No-Confidence Motion against him. And yet, the party hierarchy at least remains mindful of the steadily mounting criticism of their conduct and the minister was asked to fall down on his own sword, to make a sacrifice for the party and resign from his portfolio. The escape route to quit ‘with honour’ was the appointment of a Presidential Commission of Inquiry, the time-tested but patently obvious tactic of all previous governments to shift the heat away from an ongoing public outcry.

Since assuming office, the Government has often blamed the public servants when things go wrong. They must know the common saying in governance; “The buck stops here” – that the ultimate responsibility lies with the political head. And yet, there is a lot the ministers have to learn in their first time jobs. Officials, especially when it comes to tenders under their subjects, can run rings around them, especially with tech-talk to bamboozle the uninitiated. That does not mean, however, the political leadership has a free pass from taking responsibility for corruption as this Government demonstrates with past governments.

The fun and games of tender procedures are still at play. Corrupt officials have found ways and means of circumventing the rules from under the very noses of the political leadership. The Government as a whole better learn fast of the ‘tricks of the trade’ before their own wheels come off completely.

Coping with digital danger

While the carbon continues to blow over from the coal scandal, the bombshell exposure that the Finance Ministry has been conned to part with USD 2.5 million, allegedly to a computer hacker, has rocked the Government even further. The politicians have feigned ignorance, and the Finance Secretary has been asked to ‘bell the cat’ in explaining what had happened and why the ministry, which ironically shares the portfolio with the Digital Economy and Defence Ministries – those directly relevant to the cybersecurity of the state – kept silent until public interest whistleblowers came out with the details of the scam.

The incident must, in the least, be a thorough embarrassment to the much-vaunted digitalisation drive of the government. A simple email took the entire Ministry for a ride, or so we are told. For some time there have been concerns about Government data being on the Dark Web and available for a fee. It is widely observed that across the government sector, very few cybersecurity firewalls have been put in place. The Government is also being questioned if it has sacrificed the nation’s sovereign data to another country despite the official denials. The recent mega robbery of a semi-state bank through its IT unit demonstrates the vulnerability to digitalisation fraud.

While the claim is that the Finance Ministry was suckered through a simple email, The New York Times and Foreign Policy magazine this week published that the US tech company Anthropic has announced that its latest AI Model – Claude Mythos – has unprecedented capacity to identify cyber security vulnerabilities in digital software that runs much of the world’s critical infrastructure including the world’s banks. It has said it is too dangerous to release to the public and warned of cyber adversaries and bad actors having access to this Claude Mythos and raised alarms in the banking sector and Central Banks in the USA and elsewhere. Some have compared it to a nuclear weapon in cyber security.

A digital economy has been prioritised in Sri Lanka’s national budget and is at the core of the government’s economic recovery and development strategy. Significant failures in the country’s digital financial infrastructure and related administrative precautions are being exposed regularly in many government and semi-government quarters – and now the Finance Ministry. Future ‘Digital Sri Lanka’ needs to be well prepared for the growing challenges – whether of bad actors internal to the system or external – that are threatening far more advanced digital environments globally.