The “Christmas Tree” that is costing SriLankan airlines Rs 100mn a month

The “Christmas Tree” that is costing SriLankan airlines Rs 100mn a month

Written by Staff Writer

14 Jan, 2019 | 8:47 pm

Colombo (News 1st) -Sri Lankan airlines, continues to pay over 100 million rupees on a monthly basis, for an unused aircraft that is currently parked at the Katunayaka airport. The airlines’ trade unions say that this loss is the result of wrong decision making, in the process of procuring new aircraft to the national carrier.

In 2013, Sri Lankan formed an agreement with an aircraft leasing company named Aercap, to purchase four A350 – 900 type planes, and lease another three. While the order to manufacture the four aircraft had already been given to the foreign company, following the government change, the present government decided to cancel this agreement.

While the government was compelled to pay 98 million USD to Aercap company as compensation for the cancellation of this order, the cancellation agreement also included a few more conditions.

As a consequence of the cancellation, then CEO of SriLankan Suren Rathwaththe agreed to the procurement of an A330 -200 aircraft.

Janaka Wijeyapathirana chairman Sri Lankan Nidahas Sewaka Sangamaya of Sri Lankan Airlines stated that the airlines agreed to purchase an aircraft that every other airline company refused to accept. He noted that after signing the agreement, the respective aircraft was brought to the Katunayaka airport six months ago. However, since then the aircraft was never used for a single flight.

In addition, he stated that the government has already wasted millions of public funds to maintain the aircraft. Public funds worth nearly Rs 100 million is spent on this aircraft every month, the aircraft has been named Christmas tree. He further noted that spare parts are taken from the Aircraft and used for other aircraft. The aircraft has become a huge burden to the national carrier. The trade union revealed that while the plane is valued at $ 137mn, Sri Lankan airlines has already paid compensation amounting to a total of $98mn. The Trade unions charge that SriLankan could have procured a brand new aircraft with the money that was wasted.

Whilst a vast sum of money was spent on cancelling the deal and another 100 million rupees is being wasted every month on an unused aeroplane, the manner in which this agreement was reached is also astounding. An email addressed to the chairman by then CEO, Rathwaththe, dated 3rd October 2016, reveals that the prime minister had recommended that the former should CEO advise the chairman to proceed with the respective transaction.

Janaka Wijeyapathirana stated that on the 7th of November, the President had informed the prime minister that cabinet approval needs to be obtained for the cancellation of the agreement and requested that a cabinet memorandum be presented to the cabinet. He noted that on the 17th of November the prime minister’s office had informed the Ministry of Enterprise Development, under which Sri Lankan airlines then operated, to present this cabinet memo. However, all of this was done after the agreement was cancelled. The agreement was cancelled on the 4th of October 2016.

Wijeyapathirana also revealed that on the 3rd of October 2016, then SriLankan Chairman Ajith Dias sent an email to several email addresses informing that the PM had decided to cancel the agreement. He went on to note that It is clear that the cancellation of this agreement did not take place legally, and was through the direct intervention of the prime minister.

Hasantha Yasarathne General Secretary of SLNSS stated that an individual named Dr Rajan Sara joined the discussion on the cancellation of this agreement. He took part in the meeting despite not being a member of the Ministry of Finance, but merely a minister’s friend. It reveals that this was a suspicious transaction. Yasaratne alleged that kickbacks may have been obtained through the cancellation of this agreement as well.

An email sent by then CEO Rathwaththe, reveals that this transaction, that cost our country billions in losses, was due to the recommendation of the prime minister. Incidentally, it must also be noted that it was the prime minister’s recommendation to implement an auction system to issue Treasury bonds in 2015, which resulted in perhaps the largest bond scandal in the history of Sri Lanka.

When cronies are appointed to responsible positions and procedures are changed as per their whim and fancy, isn’t it the people of this nation who suffer in the end?

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