Minister Rohana Dissanaya was responding to questions from legislator Dayasiri Jayasekera had said that Sri Lanka railways had 16,704 permanent employees by June 30, 2012.
He denied that there were temporary workers also on the railways payroll, when Jayasekera charged that 600 temporary or contract workers had been hired.
The 2,689 permanent employed hired since 2005 included 1,656 labourers and assistant technicians, data tabled in parliament showed.
Operational losses (without depreciation) had risen from 3,553.7 million rupees in 2005 to a peak of 4,767.8 million rupees in 2009. In 2011 state railways had lost 4,059.8 million rupees. Total losses for the seven years were 28.3 billion rupees.
Minister Dissanayake said the railway department operated 87 locomotives and 84 power sets. It operated 1,180 gates at level crossings for safety and 230 new 'bell and light' gates were being built
About 400 new gatekeepers would be hired he said.
Sri Lanka's rulers under-price railways to buy votes and gives extra cut price season tickets to state workers, causing operational losses.
State run bus and rail services had also been used to stuff politically connected people with jobs since the 1980s.
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