Once envisioned as a vital arm of Sri Lanka’s maritime future, the Magampura Port Management Company (Private) Limited (MPMC) now stands as a stark reminder of how poor planning, weak oversight, and delayed accountability can sink state ventures into deep financial waters.
Formation and Purpose of MPMC
Established on July 5, 2013, as a subsidiary of the Sri Lanka Ports Authority (SLPA), MPMC was tasked with managing operations at the Hambantota Port later renamed the Magampura Mahinda Rajapaksa Port.
The company began functioning as a licensed fuel supplier under the Ceylon Petroleum Corporation, importing and storing fuel for re-export to international vessels. In 2014, it secured a hefty US $24 million loan from a private bank, guaranteed by the SLPA, in a bid to build a lucrative bunkering business.
Operational Collapse and Mounting Losses
But the dream was short-lived. A global oil price crash and operational inefficiencies soon turned MPMC’s high-stakes fuel venture into a financial nightmare.
By 2017, losses had piled up, operations were suspended, and the company’s financial position had collapsed. As of 2023, an estimated US $18.8 million about Rs. 6.8 billion remains unpaid, with interest swelling the debt further.
The loan default led to two court cases filed in 2020 against both the company and the Ports Authority, while liquidation proceedings only began in June 2022 nearly five years after operations ceased.
Audit Findings and Governance Failures
Auditor General’s reports reveal a grim picture of mismanagement: failure to verify fuel stocks, missing bank confirmations, and no clear action plan to recover losses or repay the loan. MPMC recorded a negative net-asset position of Rs. 2.79 billion by 2018, with accumulated losses of Rs. 2.87 billion.
Yet, despite these warning signs, state authorities allowed the company to remain dormant, draining public funds and credibility.
“The collapse of MPMC represents a breakdown in corporate governance and financial accountability within the Ports Authority’s oversight structure,” a senior official at the Ministry of Ports and Shipping admitted, speaking on condition of anonymity. “It is a costly lesson on how not to manage state-owned subsidiaries.”
The repercussions extend beyond balance sheets. The Hambantota Port touted as a strategic maritime gateway—continues to battle public skepticism over its profitability and management after being leased to a Chinese joint venture in 2017. The dormant MPMC only adds to that shadow, raising concerns about how state-backed projects are planned and monitored.
The Cautionary Legacy of MPMC
Analysts warn that this failure could deter future investors and complicate Sri Lanka’s efforts to attract private participation in port and logistics infrastructure. “The problem wasn’t the port it was the execution. You can’t run a billion-dollar asset with a short-term business mindset and no risk safeguards,” said a former SLPA director.
As liquidation drags on, MPMC’s legacy remains a cautionary tale. It underscores the urgent need for the government to impose stronger financial discipline on its enterprises, ensure swift closure of loss-making entities, and align subsidiary operations with national strategic goals—before another “dormant” company silently drains the public purse.
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