by Saman Indrajith
Public Enterprise Development Minister Kabir Hashim told Parliament yesterday that the government decision to cancel three A-350 aircraft ordered for SriLankan Airlines had been taken by the Economic Management Committee after discussions with all stakeholders.
In answer to a question by UPFA MP Mahindananda Aluthgamage, the minister said the government had been left with no alternative but to cancel three aircraft to avoid a loss of Rs. 32 billion.
Minister Hashim said that as the subject minister he had not been made aware of the procedure followed in cancelling the aircraft deal. He added that steps had been taken to rectify the situation and get SriLankan to follow the directions of the Ministry.
The minister also rejected the allegation that the cancellation was consequent to an email message sent by Prime Minister’s Senior Advisor Charitha Ratwatte to SriLankan CEO Suren Ratwatte. “That message was intended only to communicate the Prime Minister’s instructions to the other party,” he said.
“There has been racket involving the purchase of these three aircraft. The former government agreed to pay USD 1.4 million per month for each of the aircraft, whereas the market value only amounts to USD 950,000. That is USD 450,000 extra for each aircraft. During the entire lease period of 12 years, we would have had to incur a loss of USD 644 million from the three aircraft.”
The minister pointed out an order placed by the previous government for four more A 350-900 aircraft had not yet cancelled. “The former Government agreed to pay USD 200 million for each of them, where as they could have been bought at USD 120 million each,” he said.
SriLankan, which recorded Rs 4 billion profits in 2008, recorded a loss of Rs. 9 billion in the year after that, and the loss increased to Rs 32 billion in 2014. “By 2016, we were able to reduce the loss to Rs 16 billion and we will turn it around within this year,” he said.
MP Aluthgamage asked if there had been financial frauds at the SriLankan Airlines as claimed, why no one had been arrested. He repeatedly charged that the powers of subject ministers had been usurped by certain figures in the government and important decisions were made by others.
Minister Hashim replied that the practice of overlooking the subject ministers had first started during the former government. Cabinet approval had not been sought for purchasing those aircraft and the subject minister and his deputy had been kept in the dark.