From paradise to hell: The inside story of how SriLankan Airlines was skyjacked and plundered

By Our Political Editor-Sunday, March 27, 2016

• Minister Kabir Hashim reveals details of how billions were wasted or pocketed by unqualified political lackeys
• Cancellation of huge Airbus order costs millions, but minister says there is no option; Govt. gives six-month lifeline for turnaround of national carrier
• Economic crisis: Govt. must stop giving top jobs to racketeers who rob people’s money

Public Enterprises Development Minister Kabir Hashim

SriLankan Airlines, the country’s national carrier, that once offered a “taste of paradise” to its clients, is now on life support with Treasury handouts. The enormity of its mismanaged financial debacles unfolded last Wednesday when Prime Minister Ranil Wickremesinghe chaired a top level meeting. There, Finance Minister Ravi Karunanayake agreed to continue Treasury funding for the airline only for the next six months. Public Enterprises Development Minister Kabir Hashim, who is responsible for SriLankan, has been tasked to formulate new strategies within this period to pull it out of its deep financial mess. A number of options are being looked at including a possible tie-up with another airline. Even views of different international consultancy firms have been sought by the airline. They will meet the Premier again when proposals are ready to make urgent decisions.

RANIL REVEALS STATE OF THE ECONOMY

That it comes when the Government faces a serious economic crisis has made matters worse. Premier Wickremesinghe told Parliament on Thursday, “Minister Kabir Hashim informed me that the exact debt concerning SriLankan Airlines could be higher than the amount stated at present. The national carrier may not be able to repay it. We have to decide whether the Treasury is going to shoulder this burden. We will inform Parliament of any such decision as soon as the Cabinet of Ministers decides on it. Within the next month the Government will make a final decision on how to handle the current debt situation of SriLankan.”

Wickremesinghe added, “We have had to amend the Budget proposals from time to time due to the fast changing situation in the global economies. The Government has initiated agreements for a US$ 1.5 billion swap from the Reserve Bank of India, while it had also sought another US$ 1 billion swap from the Central Bank of China to face the prevailing foreign exchange issues. There are also ongoing discussions with regard to the tax proposals.” Some will be implemented, he said, from next month and the rest from September. He said the discussions with the IMF are mainly to deal with the tax system while the discussions on “a loan are secondary.” 

Such a standby loan of US $ 1.5 billion is being sought from the IMF was formally announced for the first time at a news conference by Special Assignments Minister Sarath Amunugama.

Finance Minister Ravi Karunanayake

At a tea party on Thursday to mark his 67th birthday, an ebullient Premier Wickremesinghe told reporters gathered at ‘Temple Trees’, of course jokingly, that they may have to liquidate the airline if they cannot turn it around. It transpired at Wednesday’s meeting that SriLankan cannot continue to function with the existing structure as the losses incurred on operations do not even support servicing its loans. In other words, the airline is now insolvent. “This joke can become a serious thing,” warned an official who stood close by. As Minister Karunanayake was to tell Treasury officials at a meeting on Friday that Sri Lankans had to pay more for their essential food commodities because the previous Government pumped millions of rupees to an airline which was then known to be failing. He charged that this was one of the worst ‘economic crimes’ of the previous administration. “We have been dumping billions of rupees to a bottomless pit,” he added.

ARROGANCE OF POWER

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