COPE reveals financial and governance weaknesses at Shipping Corporation

The Committee on Public Enterprises (COPE) has revealed that Ceylon Shipping Corporation Limited invested Rs. 630 million in six subsidiary and associated companies but received only around Rs. 400,000 in annual dividends.The findings were disclosed during a recent COPE meeting held in Parliament under the chairmanship of Parliamentarian Nishantha Samaraweera, where the Auditor General’s reports for 2021 to 2023 and the corporation’s current performance were reviewed.COPE also observed that the corporation’s Corporate Plan for 2024–2027 was not practical and appeared to have been prepared mainly for administrative compliance rather than as an operational guide.The committee further noted that several key senior positions, including the General Manager, had been held in an acting capacity for extended periods, weakening decision-making within the institution.Officials informed the committee that out of a US$ 70 million loan obtained in 2016 for the purchase of two vessels, US$ 47 million remains outstanding, leading to loan restructuring. Rising operational costs and maintenance issues were also cited as factors affecting revenue generation.COPE was also told that no formal investigation had been conducted into the disappearance of 1,852 litres of lubricating oil from the vessel Ceylon Breeze. In addition, losses of Rs. 1.4 million were reported in a school uniform fabric distribution project, while Rs. 6.3 million remains unrecovered.The committee further noted concerns over a ship management agreement with Singapore-based Wallem Shipping, which has been in place since 2016, saying it had failed to meet revenue targets and lacked penalty clauses for underperformance.Officials said the agreement is due to end in September 2026, after which a new model involving six registered direct brokers is expected to be introduced to reduce costs and improve direct access to international markets.COPE directed that the corporation be fully restructured and recommended that alleged irregularities be investigated by the Criminal Investigation Department or the Commission to Investigate Allegations of Bribery or Corruption, if necessary.