Australia debt payment faces fresh trouble as Ranjith Tennakoon says Parliament may need a new bill after $2.5 million vanished.
The Australia debt payment linked to Sri Lanka’s Treasury has become problematic after former Provincial Governor Ranjith Keerthi Tennakoon warned that the government may now need to present a new disbursement bill to Parliament.
Tennakoon pointed out that the government will have to seek parliamentary approval again to pay the debt installment owed to the Australian government, following the misappropriation of $2.5 million from the Department of External Resources of the Treasury.
The missing money had already been approved for payment as a debt and interest installment through last year’s budget document. However, since that money has now flowed to an unidentified party, Tennakoon said it is mandatory for Parliament to reallocate funds so the debt installment can be properly paid to the relevant Australian Export Finance agency.
This raises concerns about the wider financial and administrative impact of the Treasury fund misappropriation. What was initially presented as a missing payment now appears to have created a fresh parliamentary and fiscal problem for the government.
The transaction took place during a transitional period when government debt management functions were being transferred from the Central Bank to the newly established State Debt Management Department under the Ministry of Finance.
Tennakoon further emphasized that under Section 8 of the State Financial Management Act No. 44 of 2024, a special committee made up of officials from the Central Bank and the Ministry of Finance should have been appointed to control such transfers.
However, he pointed out that a serious administrative error appears to have occurred because there are no records showing that these activities were coordinated through such a committee.
This raises serious questions about whether the transfer of debt management responsibilities was handled with the required safeguards, especially during a period involving sensitive foreign debt payments.
Ministry of Finance sources indicate that the State Debt Management Department and the Department of External Resources are currently in continuous communication with the Australian Export Finance agency.
However, questions remain over how Sri Lanka will settle the original debt installment if the misappropriated funds cannot be recovered. The issue could now force the government to return to Parliament for a fresh allocation, even though the same payment had already been approved through the previous budget.
None of the investigations conducted so far have been able to recover the misappropriated funds. It is now suspected that the money is already in some foreign account.
What happens next could be critical, as the government may have to explain not only how the $2.5 million was lost, but also how it plans to repay Australia without creating another financial and parliamentary controversy.
