Keep promises

Friday, 25 March 2016 00:00 - - {{hitsCtrl.values.hits}}

LOSS-MAKING State Owned Enterprises (SOEs) are a well-known burden on the Budget with Prime Minister Ranil Wickremesinghe telling Parliament this week the loss-making National Carrier will not be able to repay its debt of nearly $1 billion.

To make matters worse, with its own finances in a rocky state, the Government will decide within six weeks whether it can afford to take over SriLankan Airlines’ debt repayments, the Premier noted, voicing the very real possibility that the opt-tapped option of Treasury bailout would not be a safety net.

State Enterprise Development Minister Kabir Hashim, who oversees the carrier, earlier this month put its debt at $933 million but on Wednesday it emerged the figure could be higher. When the National Carrier was started many decades ago, former President J.R. Jayewardene appealed to Singapore for assistance to set it up, in response his counterpart Lee Kwan Yew warned it could become an unsustainable ego trip. Between SriLankan and Mihin Air debt, the Sri Lankan Government has to make some very tough decisions.

A mounting debt crisis of its own has forced the Government to request a bailout of its own from the International Monetary Fund. The beleaguered National Carrier has drawn controversy in recent years after an independent investigator last year found evidence of serious corruption in a $2.3 billion deal to buy Airbus aircraft.

Wickremesinghe said Wednesday he was still reviewing the deal reached under the administration of former President Mahinda Rajapaksa, despite huge losses at the airline. The deal is also being probed by the police Financial Crime Investigation Division.

The situation of SriLankan initially came last April when a report ran the entire gamut from simple financial fraud to human smuggling and even cross into the murky waters of the former Chairman’s love life – read like a detailed explanation of how to run an airline…into the ground.

Despite the ferociousness of the report, holding relevant parties responsible has moved at snail’s pace. The public perception that the new regime may just be ‘all talk, no action’ has been building up and certainly must be a source of concern with Local Government elections looming ever closer.

Consequently, the report on SriLankan Airlines has the potential to turn the tide in the debate on corruption, giving the ‘Yahapalanaya’ regime its first true victory over clear-cut corruption. The new regime has been fond of hurling vitriol at the malpractices and corruption of the previous Government but it also needs to show that it is committed to reform in a genuine and real way.

SriLankan is important because larger State-Owned Enterprise reform will not be successful unless accountability is infused into the core of organisations. It is no secret that the largest four organisations including the Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB) are among the most inefficient establishments in Sri Lanka and little has been done to clean them up since the new Government came into power more than a year ago.

The new set of policymakers often point out that corruption and mismanagement of the former regime caused its end. Given the current scenario, they would do well to take their own advice.