Plan B for SriLankan PPP

Saturday, 21 January 2017 02:41 -     - {{hitsCtrl.values.hits}}

  • PM to decide on SriLankan PPP within next two weeks, says Kabir

  • Three- member ministerial committee appointed as backup plan if current shortlisted contenders fall short

  • Slams JO members, denies any wrongdoing, and insists best deal was negotiated with Aer Cap

  • International level investigation into leases under Rajapaksa ongoing 


Public Enterprise Minister Kabir Hashim gestures during the press conference – Pic by Upul Abayasekera


By Uditha Jayasinghe

Stepping into the ring against the Joint Opposition, Public Enterprise Minister Kabir Hashim yesterday denied any wrongdoing in negotiating a $98 million exit from the Airbus deal and outlined a possible backup plan if the current three contenders for a partnership fail to takeoff.

Throwing the book at the Joint Opposition, the Minister rolled out a host of numbers in his defence, recapping how the national carrier, which made a profit of $4.4 million in 2008 under Emirates, plummeted to massive losses in the subsequent six years and racked up $1 billion in debt by 2014.

He also recalled that the four A350-900 aircraft cancelled by the Government were under 12-year inflated leases of $1.4 million a month. An amount, the minister insisted, would have added up to an extra $500 million in debt for the airline had the deal been kept.    


“The cost for the entire southern highway was $700 million. The losses incurred by SriLankan could have built us one and a half highways, or 150 schools or 75 hospitals. It is the money of Sri Lankans that was wasted in the mismanagement of this airline. Bankrupt politicians who said nothing when these terrible decisions were being made now have the audacity to level baseless allegations against us. They have no shame.”

Minister Hashim defended the Government team that negotiated with Aer Cap pointing out that they managed to negotiate down from $159 million to $98 million and if the deadline set by the leasing company had been breached, SriLankan risked litigation. He acknowledged that personally he wished the cost reduced to about $75 million but the negotiators were unable to bring Aer Cap down to that amount.

 “We also had other leases with the same company and if a case was filed then it would have hurt the airline and its standing in the industry. It would have also affected our chances of finding a viable partner. Taking these things into consideration we decided to comply with the compromise of $98 million.”


Despite the inflated lease costs, Minister Hashim refused to fault Aer Cap insisting that the onus was on the Government side to get the best deal for the airline. SriLankan has extended a lease on one A330 aircraft with Aer Cap and is in negotiations to purchase a new A330, he said. Nonetheless, Hashim revealed that an international-level investigation was ongoing into the previous lease agreements signed with Aer Cap under the former Government of Mahinda Rajapaksa, but declined to divulge details.    

SriLankan received nine Expressions of Interest (EOI), of which three have been shortlisted, the Minister said. TPG, a US investment firm, Peace Air and a Maldives-based consortium have been evaluated and the report is before Prime Minister Ranil Wickremesinghe. Hashim expressed confidence that a decision is likely to be made within the next two weeks. If they prove unsatisfactory, a new three-member ministerial committee headed by the Public Enterprise Development Minister would be appointed to seek alternatives. Special Projects Minister Dr. Sarath Amunugama and Development Strategies and International Trade Minister Malik Samarawickrama are to be the other members.        

 “The National Savings Bank (NSB) committee has been evaluating the proposals and they have to look at whether the proposals met certain conditions, such as audited accounts and whether those applied had complied with all the necessary documents.


And now they have to decide who they are going to pick. I think that is the report they have submitted to the Prime Minister. So the Prime Minister will discuss it in detail and decide whether we are going ahead or if we are not happy with it whether we are going to recall expressions.

 “My committee will only be appointed in the event that it stops and there is no sufficient interest in the three then the new committee will have to look at alternatives,” said Hashim.

Open ended discussions with organisations willing to partner SriLankan would be held by the Government, assured Minister Hashim, who also stressed that they would be keen on a venture that would support tourism.  

“Government will not let go 100%. We want to retain national carrier status. But we are open to discussion to get the best possible structure for SriLankan and the country. We are open to discuss anything that will get SriLankan back as a viable entity, which it is not at the moment.”


Minister says “mafia” within SriLankan undermining restructuring

Public Enterprise Minister Kabir Hashim yesterday said a “mafia” formed within SriLankan Airlines during the former Government’s time was still active and undermining reform and restructuring efforts by the current administration.

Noting that the damning Weliamuna report released in early 2015 was “alive and well” and under investigation by the CID, the Minister reiterated that its recommendations would be implemented even though top brass of the airline had previously dismissed it as mere allegations.

Responding to questions, the Minister admitted that he had failed to make significant inroads within the organisation during the past two years and said he was under pressure to allow the status quo to remain. However, he pledged to continue reforming corrupt elements within the national carrier but noted that the Chairman and CEO of the airline would not be removed for simply having a difference of opinion with him.