Sri Lanka's national carrier has become a drain on economy - COPE

COLOMBO (The Island/ANN) - SriLankan Airlines, COPE Chairman says the national carrier SriLankan had become a drain on the economy, with losses amounting to US$ 115.77 million, paid as compensation for terminating an airbus deal.

SriLankan had become a drain on the economy, and the situation had been exacerbated by compensation paid for terminating an airbus deal, Parliament was told, yesterday.

Tabling a COPE (Committee on Public Enterprises) on SriLankan Airlines, COPE Chairman MP Sunil Handunnetti said the country’s economy had suffered heavily as USD 115.77 million or Rs. 17,058.1 million had to be paid as compensation when SriLankan abruptly terminated the agreements for acquiring four A 350-900 aircraft, without an adequate cost-benefit analysis.

The COPE report is on the investigations into the replacement of the SriLankan fleet and the termination of the agreement for the acquisition of eight A 350-900 aircraft.

The COPE observed that the opinion of the Attorney General had not been sought on the termination the agreement which had been prepared under the guidance of "Aviation Legal Experts", a UK-based firm.

The COPE has also observed that only the officials from the Ministry of Finance and SriLankan had taken part in the discussion on the termination of the agreement to acquire aircraft and no official from the Ministry of Public Enterprise Development, which is the subject ministry, had participated in the talks. COPE Chairman Handunnetti requested a one-day debate in Parliament on the findings in the report.

The report includes the Special Audit Report submitted by the Auditor General at the request of COPE regarding the replacement of the fleet of aircraft of the SriLankan Airlines Ltd and the final report of the inquiry conducted by the Auditor General at the request of COPE on the termination of the agreement for the acquisition of eight aircraft of A 350-900 model, entered into in the years 2013 and 2014 by Sri Lankan.

According to the COPE, SriLankan has suffered the aforesaid loss due to the process of revocation of lease agreements for obtaining four A 350-900 aircraft, and additional compensation will have to be paid at the termination of agreements on another four of the same aircraft to be delivered in year 2020/2021.

The Management of SriLankan, during the period relevant to the said termination and the decision to add 14 modern aircraft to the fleet within eight years, was responsible for the total loss including the loss of USD 115.77 MN, the special audit report by the Auditor General which is included in the COPE report has observed.

"This report will be released to the public via the Parliament website and the Auditor General Department’s website and we think that there should be a one-day debate in parliament on the content of the report," MP Handunnetti said.

Leader of the House Public Enterprise, Kandyan Heritage and Kandy Development Minister Lakshman Kiriella said that the government was ready to allocate a date for the debate. "These agreements were signed by the previous government. I do not know a way out of that mess causing immense losses to the country’s economy.

UPFA MP Mahinda Amaraweera: We, too, demand that a debate be held so that we can speak on the frauds and corruption that took place under the incumbent government. The compensation is paid by the taxpayers of this country. Most people never travel in aircraft during their lifetime. This matter should be debated in Parliament.

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