- Audit report notes 435 confiscated vehicles held at Mattakkuliya facility for years
- Extensive corrosion prevents return, auctioning; Rs. 41.85 m rental loss
Sri Lanka is facing an escalating crisis in the management of confiscated vehicles, leading to significant financial, logistical, and environmental consequences.
Customs officials and Government authorities including Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku have acknowledged the severity of the issue and outlined the pressing need for reforms.
The Government is seeking a mechanism to dispose of the vehicles stuck in the Customs yards over several years, Kodithuwakku informed The Sunday Morning.
Growing storage problem
The crux of the issue lies in the prolonged detention of confiscated vehicles at ports and private yards across the country. An Auditor General’s report on Sri Lanka Customs has highlighted alarming statistics, with 435 confiscated vehicles stored at a facility in Mattakkuliya incurring annual rent costs of Rs. 41.85 million as of 31 December 2023.
Among these, 152 vehicles have been held for over five years. Additionally, 202 vehicles have been detained at the Hambantota International Port area, with 36 vehicles stored for more than five years. The prolonged storage has rendered many of these vehicles unfit for use, diminishing their value and complicating disposal efforts.
“There are vehicles at the ports that cannot be returned or auctioned due to extensive corrosion over time,” Kodithuwakku said.
“We are exploring a legal disposal mechanism because keeping these vehicles is not practical. They are not generating any income and are of no use to anyone, yet we continue to incur costs for storage and maintenance.
“This is a financial burden as these vehicles are deteriorating while occupying valuable space in the yards, especially at a juncture when storage space has become a problem for us,” he added.
Attempts to gain the latest statistics from Customs in relation to the vehicles stuck in Customs yards did not prove successful at the time of going to press.
Financial and environmental consequences
The financial implications of this situation are staggering. The Government’s inability to dispose of these vehicles promptly has resulted in millions of rupees being spent annually on storage while forfeiting potential revenue from auctions.
The vehicles’ prolonged exposure to the elements has led to severe deterioration, reducing their market value. Moreover, the corroding vehicles pose significant environmental risks due to potential leakage of hazardous materials such as oil and battery acid.
An Auditor General’s observation noted that long-term storage and lack of timely disposal mechanisms had further exacerbated the problem. Vehicles held for years without resolution have diminished returns in auctions and contribute to logistical congestion.
Root causes of the crisis
One of the underlying causes is the misuse of import regulations. Kodithuwakku claimed that over the years, vehicles had been imported for political purposes or with the expectation of bypassing proper procedures. While stricter enforcement has curtailed such activities recently, the backlog from previous years remains a challenge.
“Some vehicles were imported for political purposes or with the expectation of bypassing regulations. However, we have addressed this issue. The public is now more aware that importing and clearing vehicles without following proper procedures is no longer feasible. We anticipate a significant reduction in such imports, especially with stricter enforcement of existing laws,” Kodithuwakku noted.
The Auditor General’s report also points to gaps in the legal framework for auctioning confiscated vehicles. While regulations exist to prevent unauthorised imports, delays in enforcement and legal proceedings have contributed to the accumulation of vehicles in storage.
Operational weaknesses and recommendations
The Auditor General has highlighted operational inefficiencies including delays in processing seized goods. For instance, 39 containers with various food items, medicines, and fertilisers have been held for 2-12 years.
The report also reveals that 53 containers of rice stored for over six years had become unfit for human consumption, yet no decisive action had been taken. Likewise, storage over prolonged periods had resulted in a shortage of space in the yards owned by the Sri Lanka Ports Authority (SLPA).
“We must ensure that systematic processes are followed properly. Moving forward, we aim to establish a more streamlined process in collaboration with Customs, as the responsibility for such matters primarily lies with it rather than the SLPA,” Kodithuwakku emphasised.
The Auditor General has recommended expediting the resolution of cases related to confiscated vehicles, implementing efficient procedures to reduce storage durations and financial losses, and enhancing inter-agency collaboration to streamline asset management.
Proposed solutions
To address the crisis, the Government is prioritising regulatory reforms and improved coordination between Customs and other agencies.
One key initiative is the development of a legal framework to expedite the disposal of confiscated vehicles. Ideally, vehicles should be auctioned within two months of confiscation. However, the lack of clear laws governing this process has been a major hindrance.
“When introducing new regulations for vehicle imports, we aim to ensure that unnecessary vehicles are not brought into the country,” Kodithuwakku explained.
He claimed that the re-opening of vehicle imports would be streamlined in such a way that vehicles that were not roadworthy or those that did not comply with existing norms would not be allowed to be imported.
“I do not believe that issues will arise if we implement regulations properly. However, if issues do arise, we will expedite solutions such as re-exporting or auctioning the vehicles as soon as possible,” he said.
Raising public awareness
Public awareness campaigns are another critical component of the Government’s strategy. These initiatives aim to educate citizens on the importance of adhering to import regulations and foster trust in the legal system.
When asked whether the Government would consider introducing new laws to expedite the process considering the storage and environmental hazards caused by prolonged delays in clearing out vehicles, Kodithuwakku replied negatively.
“We believe that the existing laws are adequate to conduct our affairs smoothly. We do not need additional laws to address this matter, but proper implementation is important,” he said, adding: “Instead, public awareness campaigns can educate people on adhering to regulations and foster trust in the system. The people need to be aware that bypassing regulations will no longer be tolerated.”
Judicial challenges
The Judiciary plays a crucial role in resolving cases related to confiscated vehicles. However, delays in legal proceedings have prolonged the storage of many vehicles, further exacerbating the crisis. While the Government has pledged not to interfere with judicial processes, it recognises the need to expedite case resolutions.
Kodithuwakku claimed that the Government would not intervene in judicial matters. “Let the law take its course, we will not meddle with it,” he said.
However, he noted that there were many other vehicles in the yards which were not judicially disputed. “There are many vehicles which were imported by persons who likely assumed that the regulations could be sidestepped. These vehicles can be quickly disposed of. Resolving these cases and filtering out unnecessary vehicles will alleviate much of the congestion in our storage facilities,” Kodithuwakku said.
Future outlook
Kodithuwakku expressed optimism about the future, stating: “With stricter enforcement, streamlined processes, and greater public awareness, we can prevent the recurrence of such issues. This is not just about solving a storage problem; it’s about ensuring accountability and efficiency in our systems.”
The Government’s long-term strategy includes introducing stricter import controls, enhancing enforcement mechanisms, and fostering inter-agency collaboration. Regular audits and transparent reporting will also play a vital role in ensuring accountability.
“Political interference and attempts to sidestep the applicable laws will not be tolerated and those who intend to penetrate the system by engaging in such acts are already aware that they can no longer do so,” he said.
Sri Lanka’s confiscated vehicle storage crisis underscores the need for comprehensive reforms and proactive measures. The financial and environmental impacts of prolonged storage are significant, but with the combined efforts of all stakeholders, the crisis can be mitigated.
By addressing root causes, implementing innovative solutions, and prioritising efficiency, Sri Lanka can transform this challenge into an opportunity for systemic improvement.