PCoI questions SL Airlines Commercial Procurement Manager on liquor tender

• Alleges SL Airlines CEO favoured Phoenix Duty Free Services

By Maleesha Sulthanagoda

The ongoing cross-examination into allegations of large scale frauds and malpractices in SriLankan Airlines (SLA), SriLankan Catering Ltd. and Mihin Lanka Ltd. before the Presidential Commission of Inquiry (PCoI) yesterday focused on the tender procurement procedure on the controversial tender signed between the National carrier and Phoenix Duty Free Services in 2012.

SLA Senior Manager Commercial Procurement Deshan de Silva testifying before the PCoI said they called for a tender to procure liquor as there was a request to procure it, and because their agreement with Free Lanka Trading Ltd. was coming to a close on the 30 July 2011.

He also stressed that despite shortlisting 17 bidders, the former SLA CEO Kapila Chandrasena was in favour of awarding the tender on liquor procurement to Phoenix Duty Free Services.

“We received solicited tender bids from 46 suppliers. 17 out of the 46 got shortlisted and were waiting for a Wine-tasting session. The 17 shortlisted bidders were also notified about them being shortlisted, but after the bid submitting time frame came to a close our CEO Kapila Chandrasena told me to take a look at a bid from Phoenix Duty Free Services. However, according to the Procurement Manual of SLA, unsolicited bids are to be rejected. 

Those should only be taken into evaluation if they prove to be necessary for the betterment of the National carrier,” he elaborated.

Furthermore, he noted that Chandrasena instructed the Board of Directors to take a look into the proposal by Phoenix Duty Free Services as SLA was going through a liquidity crisis at the time and to terminate the tender calling.

“The CEO also told the board to terminate the tender calling so that they can move forward with the negotiations with Phoenix Duty Free Services Ltd.,” de Silva said.

He added that, at the time of the negotiations, he wasn’t aware that Phoenix Rising Ventures Ltd., which is the mother company of Phoenix Duty Free Services, had applied for another bid as the in-flight cosmetics and fragrances supplier for SLA.

Noting that SLA had notified the 17 shortlisted bidders about a wine-tasting as criteria in selection of a viable supplier, de Silva said it was not carried out.

“Wine-tasting did not take place for the 17 shortlisted bidders because SriLankan Airlines was negotiating with Phoenix Duty Free Services about the tender. Nevertheless, the other 17 shortlisted companies were not notified that they had ongoing negotiations with Phoenix Duty Free Services,” he added.

He also emphasised that the tender submitted by Phoenix Duty Free Services was predominantly focused on providing duty free services and not only for supplying liquor, but through rigorous negotiations that the concessionaire agreed to provide only liquor due to differences regarding the credit consignment basis on other services.