SriLankan fails to implement US$ 300mn strategic business plans

21 December 2018 04:45 am - 8     - {{hitsCtrl.values.hits}}

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SriLankan Airlines management had assigned former Chief Financial Officer (CFO) S. A. Chandrasekara to formulate two business plans in 2008 and 2010 but none of the recommendations made through the business plans had been implemented, former CFO S. A. Chandrasekara informed the Presidential Commission of Inquiry (PCoI) into irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka yesterday.

S. A. Chandrasekara was appointed by one of the former SriLankan Chairmen, Nishantha Wickramasinghe, to formulate a strategic business plan for SriLankan within three months for four financial years in April 2010.

The witness informed the Commission that he had prepared a four year (2010/11-2014/15) business plan for USD 300 million. During his testimony, he informed that both business plans had focused on selling shares of SriLankan to earn profits and to avoid obtaining loans or sovereign guarantees from the General Treasury.

In the business plan, he also created separate subsidiaries with ground handling, catering and engineering so that these entities could enter into agreements with other institutions, enabling them to sell shares.

“Ground handling, catering and engineering are profitable processes. For example, ground handling operations alone are worth at least USD 400 million and if we had issued shares for half its worth, USD 200 million, we could have paid off a lot of debt. Moreover, the fact that ground handling, catering and engineering is with SriLankan allows the covering up of losses incurred by the flight operation. I wanted to continue this operation without being a burden to the Treasury,” Chandrasekara said.

Meanwhile, Yasantha Dissanayake, Head of Financial Management at SriLankan, told the PCoI that former CEO Manoj Gunawardena had informed him that the Chairman and the Treasury wanted Chandrasekera’s plan to be reviewed by an international company.

SriLankan Airlines Management paid Rs.50.7 million to Via Capital Company in 2010 to evaluate the business plan formulated by Chandrasekera for Rs.750,000. The selected international company, Via Capital, then went through the business proposal formulated by Chandrasekara and came up with a new proposal, for five years, by May 2011.

They suggested a number of proposals including expanding the fleet to 23 aircraft - 9 narrow body and 14 wide-body. The total cost for this proposal was USD 510 million compared to USD 300 million in the plans created by Chandrasekara. (Yoshitha Perera)

  Comments - 8

  • ra Friday, 21 December 2018 05:54 AM

    Whatever they promise to deliver to the people should never be counted because breaking promises is very easy for Sri Lankan politicians including Tamils, Sinhalese, and Muslim. It is very hard to trust Sri Lankans.

    Pradeep Friday, 21 December 2018 06:54 AM

    Is it pertinent to inquire who this VIA CAPITAL COMPANY was, what are their credentials to make a counter proposal? Is it pertinent to inquire the logic to pay Rs.50.7 million to examine and report on the proposal prepared for 7.5 lakhs? It is pertinent whether this VIA CAPITAL COMPANY is still in existence and if so where are they registered?

    Karu Friday, 21 December 2018 06:58 AM

    Why not more flights to Tiruchirapalli the most expensive sector in the Universe

    Pilots without skills Friday, 21 December 2018 07:22 AM

    None is implemented. This is the operational pilots (plane drivers) attitude. Our people are working for other best airlines.Best wishes.

    ConcernedCitizen Friday, 21 December 2018 07:40 AM

    Their service is pathetic and aircrafts are old. I want to avoid flying in this airlines. Especially the cabin crew does not know what customer service is about. Keep this afloat costs more than Rs 12,000 per citizen. Why so much burden on the tax payers when no competent people are running it.

    Sach Friday, 21 December 2018 08:35 PM

    Yahapalana stopped the whole modernization of the planes paying a hefty cost for compensation

    ConcernedCitizen Friday, 21 December 2018 08:51 AM

    Salute to you for the hard work putting up a strategy to get out debt. But as you know, our stupid directors/CEO do not know what is aviation. Their only mission is Commission.

    BuffaloaCitizen Friday, 21 December 2018 09:11 AM

    After all this notoriousness, many citizens of this country wave and greet the return of the Rajapakse regime. That is the crux of the culture that has bankrupt this country.


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