Kick-backs and crooked deals cost Sri Lanka over a billion dollars last year amounting to about a fifth of tax revenue, the country's top official whistle-blower told AFP in an interview.
The head of the parliamentary Committee on Public Enterprises, or COPE, told AFP corruption and fraud runs deep in the main foreign investment promotion body and a state-agency involved in privatisation.
COPE, which last year probed 26 of the 210 state enterprises, found fault with Sri Lanka's Central Bank too for not monitoring financial institutions properly and failing to recover large amounts due to the state.
"As a result of these inefficiencies and corrupt deals, we estimate Sri Lanka may have lost in excess of 100 billion rupees (one billion dollars) last year alone," Legislator Wijeyadasa Rajapakshe said Monday.
The loss is about a fifth of government revenue and amounts to about four percent of the 24-billion dollar economy.
He said he had discovered that the Board of Investment (BOI) operated without a business plan and maintained records in an ad-hoc fashion.
"It was shocking discovery to all of us. The BOI is such an important institution and the main agency to attract foreign investments to our country," said Rajapakshe, who is also a ruling party law-maker.
The BOI attempted to mislead parliament by submitting a "false document" under the pretext that it was their corporate plan, he said.
There was no immediate comment from the BOI.
Sri Lanka, is hoping to attract a billion dollars in investments this year, after securing 600 million dollars last year.
But Rajapakshe expressed doubts over the figures quoted and the manner in which investments are secured by the BOI.
"We are not attracting top world-class companies, but people to open Chinese restaurants, massage parlours and karaoke clubs under the BOI banner. It's an insult to our country," he charged.
According to COPE figures, BOI approved more than 2,800 firms to operate over the past 28 years, of which it had cancelled around 1,100 licenses.
"There's no excuses for the BOI, they are thoroughly incompetent. If these tax breaks and concessions are given to local entrepreneurs they can do better."
Rajapakshe pulled up the Central Bank for not taking action against illegal finance companies.
"We estimate over 20 finance companies are now illegally operating without a license, and the bank must take steps to stop it," he said.
Privatisation of state assets had also failed to reap benefits though around 60 organisations were sold, generating over 65 million dollars in revenue, he added.
"Privatisation has been stopped now, but what was done hardly brought in money to pay for five months of interest payments on our loans."
He also found fault with the island's main child protection agency saying it had not utilised foreign aid properly to help children.
The auditor-general last year found that only 13 percent of the 3.2 billion dollars in aid international donors had pledged to support Sri Lanka's tsunami recovery in December 2004 had been utilised.
COPE also called for the replacement of the head of the Institute for Policy Studies, the country's top economic think-tank, who is seriously ill.
"I personally represented him as a lawyer in a case where we proved that he was suffering from Alzheimer's disease and dementia," Rajapakshe said.
The head of the parliamentary Committee on Public Enterprises, or COPE, told AFP corruption and fraud runs deep in the main foreign investment promotion body and a state-agency involved in privatisation.
COPE, which last year probed 26 of the 210 state enterprises, found fault with Sri Lanka's Central Bank too for not monitoring financial institutions properly and failing to recover large amounts due to the state.
"As a result of these inefficiencies and corrupt deals, we estimate Sri Lanka may have lost in excess of 100 billion rupees (one billion dollars) last year alone," Legislator Wijeyadasa Rajapakshe said Monday.
The loss is about a fifth of government revenue and amounts to about four percent of the 24-billion dollar economy.
He said he had discovered that the Board of Investment (BOI) operated without a business plan and maintained records in an ad-hoc fashion.
"It was shocking discovery to all of us. The BOI is such an important institution and the main agency to attract foreign investments to our country," said Rajapakshe, who is also a ruling party law-maker.
The BOI attempted to mislead parliament by submitting a "false document" under the pretext that it was their corporate plan, he said.
There was no immediate comment from the BOI.
Sri Lanka, is hoping to attract a billion dollars in investments this year, after securing 600 million dollars last year.
But Rajapakshe expressed doubts over the figures quoted and the manner in which investments are secured by the BOI.
"We are not attracting top world-class companies, but people to open Chinese restaurants, massage parlours and karaoke clubs under the BOI banner. It's an insult to our country," he charged.
According to COPE figures, BOI approved more than 2,800 firms to operate over the past 28 years, of which it had cancelled around 1,100 licenses.
"There's no excuses for the BOI, they are thoroughly incompetent. If these tax breaks and concessions are given to local entrepreneurs they can do better."
Rajapakshe pulled up the Central Bank for not taking action against illegal finance companies.
"We estimate over 20 finance companies are now illegally operating without a license, and the bank must take steps to stop it," he said.
Privatisation of state assets had also failed to reap benefits though around 60 organisations were sold, generating over 65 million dollars in revenue, he added.
"Privatisation has been stopped now, but what was done hardly brought in money to pay for five months of interest payments on our loans."
He also found fault with the island's main child protection agency saying it had not utilised foreign aid properly to help children.
The auditor-general last year found that only 13 percent of the 3.2 billion dollars in aid international donors had pledged to support Sri Lanka's tsunami recovery in December 2004 had been utilised.
COPE also called for the replacement of the head of the Institute for Policy Studies, the country's top economic think-tank, who is seriously ill.
"I personally represented him as a lawyer in a case where we proved that he was suffering from Alzheimer's disease and dementia," Rajapakshe said.
