By Asiri Fernando/The Sunday Morning
Colombo, February 19: Staff members of some State-Owned Enterprises (SOEs) continued to rake in large paychecks due to massive overtime and allowance pay at the end of last month, despite the Government’s push to increase utility and fuel tariffs citing a need to be cost-reflective, The Sunday Morning reliably learns.
This, in the wake of a Government circular to all ministries and State institutions, to cut their expenditure for 2023 by 6%.
The Sunday Morning last week learned that a number of employees of the Ceylon Petroleum Storage Terminals Ltd. (CPSTL) has been issued paychecks which included overtime pay equivalent or greater than their basic pay. CPSTL, which is part of the Ceylon Petroleum Corporation (CPC), owes the State billions of rupees in debt.
According to a senior official in the Government, the CPSTL in 2022, while the economic crisis was in full swing, had allocated nearly Rs. 1.8 billion for overtime payment in its budget for 2022, Rs. 3.01 billion for the payment of basic salaries of its employees, and Rs. 500 million allocated to be awarded as bonus.
It is understood that in 2021, even during the Covid-19 pandemic and the resultant drop in the use of motor vehicles, the CPSTL spent close to Rs. 1.6 billion on overtime payments, with Rs. 1.17 billion and Rs 1.7 billion allocated for the years 2020 and 2019 respectively.
“The situation with Over Time (OT) pay is clearly being abused by many and the senior management is complacent. This abuse of benefits has been ongoing for decades,” a senior official at the Ministry of Power and Energy, who wished to remain unnamed, said.
According to the source, as recently as January 2023, some employees had more overtime pay listed on the salary strips than the basic salary. In addition, like CPC employees, CPSTL employees are also entitled to a range of allowances.
“One employee, whose basic salary is Rs. 131,000 racked up Rs. 136,000 in OT and, with other allowances, his take-home pay was over Rs. 320,000 for January. Another, who earns a basic salary of Rs. 127,000, racked up Rs. 114,000 in OT and with other allowances, his take-home was Rs. 315,000. Why is the Government tolerating such overheads? If we are in debt and we are trying to be cost-effective, then we need to streamline our operations and reduce wastage.
“This volume of OT is not possible without administrative support. They are all in this for benefits. On some Sundays, where we only have a few operations of fuel bowsers scheduled to happen, some managers and staff who are in excess to the requirements of the day turn up and clock in. Senior officials sign off on their work records, so all of them get OT, even when such numbers are not needed at the terminal on low traffic days,” the senior official told The Sunday Morning.
When The Sunday Morning contacted CPSTL Director General Management (Finance) Pradeep Kaggodaarachchi regarding the massive OT payments and the allowances granted to the staff, he declined to comment, asking that we address our questions to the Chairman.
CPSTL Chairman Mohamed Uvais Mohamed responding to a query told The Sunday Morning that plans were being drafted to restrict the issuance of OT payments to not exceed an employee’s basic salary. He also stated that this issue was partially due to staff working on Sundays being required to be paid double rates at petroleum terminals.
However, Mohamed stated that the culture of seeking OT payments excessively needed to be addressed and would be taken up in the review process for SOE restructuring.
Meanwhile, a senior CPSTL official who spoke to The Sunday Morning on terms of anonymity defended the massive allocation made to sustain large OT payments.
“One of the main reasons for a large OT payment is that our staff work on a shift basis – many of them work 24 hours or sometimes all seven days of the week. That is one reason. Also, Sundays and Poya days incur Special Holiday pay. We are forced to work on such days due to the ongoing crisis. However, earning almost double your salary is unusual. It may be a few individuals. We need to assign more shifts to staff due to a recruitment freeze which has been in effect since the end of 2019,” the CPSTL official said.
According to him, CPSTL which had a staff strength of about 2,400 has now dwindled to approximately 2,000 due to retirement and attrition.
Allowances Galore
According to documents seen by The Sunday Morning, the CPSTL offers their employees nearly 20 allowances and incentives, including an attendance allowance, for which the SOE had forked out Rs. 16 million in 2022, while Rs. 16 million had been paid in 2021.
CPSTL staff who reach a ceiling in their work profession without the prospect of another promotion are paid ‘stagnation allowance,’ which cost the taxpayer Rs. 39 million last year.
As part of the CPC, the loss-making SOE had also forked out Rs. 12 million in 2022 as an ‘Inconvenience Allowance’.
“Many senior officials are issued a vehicle loan through the CPSTL which they have to pay 4% interest on and the CPSTL pays the rest of the interest on the employee’s behalf. The abuse comes when the said employees have the vehicle paying a low-interest rate and still use official transportation and fuel for their work. How is this sustainable?” the senior CPSTL official complained.
The official added: “This culture of reaping all you can and more from State institutions need to stop. A long time ago, being a State employee was an honourable job. People looked up to you and we weren’t called thieves. How can we describe ourselves now, with such things happening?
“No one wants to talk about it as it benefits the administrators and they are afraid of the unions. That’s part of the problem. There is a Government circular that says a State employee can not do OT more than 30% of their basic salary, so how is this all legal?” the official asked.
The Sunday Morning attempted to contact several trade unions close to the petroleum sector but they would not respond to our queries.
Cost Cutting
Last week, Minister of Power and Energy Kanchana Wijesekera, responding to a question from The Sunday Morning, stated that the Ceylon Electricity Board (CEB) planned to cut Rs. 53 billion in expenditure for the year 2023.
The CEB General Manager stated that bonuses would also be trimmed by the CEB. However, when The Sunday Morning asked Minister Wijesekera about how the CPC and CPSTL would reduce their expenditure, he directed us to ask State Minister of Power and Energy D.V. Chanaka. However, neither Minister Chanaka nor his Secretary responded to our queries.
For Industrial Peace
According to to think tank LIRNEasia Founding Chairperson Prof. Rohan Samarajiva, the troubling patterns of OT pay and allowances at CPSTL indicate a managerial subculture at State enterprises which hold monopolies to allow such practices to keep the industrial peace.
He also pointed out that in the State sector there was a culture of keeping the salary looking modest while offering other benefits to retain staff. However, Samarajiva also said that the high OT payments may reflect that the approved cadre amount was not available or that it may be indicative of managerial deficiencies.
“One of the key performance indicators for managers at State enterprises is to keep the industrial peace. This is especially true when they hold monopolies in the market,” Samarajiva opined, adding that such practices should be reviewed in the SOE reforms agenda, which is yet to be clearly outlined by the Government, despite the announcement to the effect several months ago.
Frontier Research Product Head (Macroeconomic and Thematic Research) Chayu Damsinghe opined that such wasteful practices may be an indication of a lack of a national employment management strategy, where the longitude and progression of the workforce was planned in advance.
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