Audits Reveal Deep-Rooted Failures in Fisheries Harbour Governance

Sri Lanka’s fisheries harbour sector is increasingly being exposed as a case study in systemic governance failure, as repeated audits and investigations point to entrenched weaknesses in procurement, financial control and institutional accountability within the Ceylon Fishery Harbours Corporation (CFHC) and the Ministry of Fisheries.

For more than a decade, the Auditor General’s Department has consistently flagged serious violations of government procurement guidelines, ranging from consultancy appointments made without Treasury approval to equipment purchases carried out outside approved procedures. These are not isolated administrative lapses, but patterns that suggest an institutional culture tolerant of shortcuts, political pressure and opaque decision-making.

One of the most striking issues highlighted in audit findings is the manipulation of estimated project costs. In several harbour development projects, politically connected consultancy firms were found to have inflated cost estimates, enabling them to secure disproportionately high consultancy fees. In at least one major case, an official inquiry was forced to reduce payments by half, despite reports of intense lobbying and political intervention to maintain the original figures.

The leasing of fisheries harbour premises has also emerged as a major source of financial loss. The Modara Fishery Harbour lease, terminated due to accounting irregularities, reportedly caused a potential loss exceeding Rs. 470 million to the state after assets were undervalued and rental terms poorly structured. Such arrangements, auditors note, indicate weak internal oversight and a failure to safeguard public property.

Procurement irregularities extend beyond construction and leasing. Auditor General’s reports document instances where high-value equipment was purchased without proper approval, including a fish vacuum packaging machine that resulted in a loss of nearly Rs. 6 million. Consultancy payments for harbour projects were also made without mandatory clearance from the General Treasury, directly violating financial regulations.

Perhaps the most damaging example of flawed planning and oversight is the Oluvil Harbour project. Frequently cited as a “white elephant,” the project consumed billions of rupees without adequate feasibility studies or environmental assessments. Persistent operational problems and coastal erosion have rendered the harbour largely ineffective, reinforcing concerns that political considerations routinely overrode technical and economic realities.

These governance failures have increasingly drawn the attention of investigative bodies such as the Commission to Investigate Allegations of Bribery or Corruption (CIABOC). The arrest of a former CFHC Chairman in June 2025 over procurement violations related to an unsolicited proposal further underscored the depth of institutional vulnerability.

Analysts warn that without structural reform strengthening procurement transparency, enforcing audit recommendations, and insulating technical decisions from political interference the fisheries harbour sector will continue to bleed public funds. More critically, these failures undermine the livelihoods of fishing communities who rely on safe, functional harbours, turning vital national infrastructure into symbols of waste and mismanagement rather than engines of coastal development.