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Agreement to purchase four airbuses -- MR regime that first decided to cancel it

22 August 2017 02:00 am - 9     - {{hitsCtrl.values.hits}}

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It was the Mahinda Rajapaksa government which decided to abrogate the agreement it signed with Airbus Industries to purchase four airbuses just before the regime change Minister Susil Premajayantha said.

He said the situation worsened after the yahapalana government appointed a new board of directors and told Daily Mirror that the Rajapaksa administration had decided to do so after the exposures made in the COPE report.

“The COPE under the chairmanship of former minister DEW Gunasekara in its report sounded alarm bells in Parliament on the losses incurred by SriLankan airlines. COPE prepared a ‘Businesses Plan’ which called for the removal of the A340 aircraft from proposed purchase agreement and lease four A350 airbuses by 2020. But the regime change in January 2015 put a stop to business plan,” the minister said.

He said the new management appointed by the yahapalana government closed down three important destinations -- Paris, Frankfurt and Rome from where thousands of European tourists visit Sri Lanka while the officials in the top management increased their salaries and allowances further precipitating the financial situation of the ailing national carrier.

“To make the situation worse, there was unplanned and unnecessary recruitment resulting in SriLankan being overstaffed,” the minister said.

In early 2015, the government decided to cancel the lease agreement for four A350 airbuses resulting in a termination surcharge of US$146.5 million in addition to the forfeiture of US$7.5 million deposit there by incurring a massive loss of US$154 million or over Rs.231 billion.

However, the Finance Ministry intervened at this stage and renegotiated the purchase agreement with Airbus Industries with the SriLankan now having to pay US$95 million in installments after they agreed to waive US$54 million from the total commitment.

“All in all, I don’t understand as to why the top management of the SriLankan airlines fails to take the most pragmatic decision at the right time and run this national asset at least on a break-even point because the loses incurred by it is a heavy burden to the economy,” the minister.

Quote -- The COPE report sounded alarm bells in Parliament on the losses incurred by SriLankan airlines. COPE prepared a ‘Businesses Plan’ which called for the removal of the A340 aircraft from proposed purchase agreement and lease four A350 airbuses by 2020. (By Sandun A Jayasekera)

 

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  Comments - 9

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  • cheers Tuesday, 22 August 2017 09:22 AM

    Anura Kumara where are you can you explain what you mentioned before elections??????

    Nic Tuesday, 22 August 2017 09:43 AM

    What have you been smoking? Yeah - you expect us to believe what you say? Come on get real.

    JUMP ER. Tuesday, 22 August 2017 10:04 AM

    THE MAN ON THE FENCE IS GETTING READY TO JUMP. via DM Android App

    Desmond Fernando Tuesday, 22 August 2017 10:24 AM

    By the way Mr Minister who ordered it?Was it during Chandrika' regime.Another stupid culprit who imported the inferior Oil, Another Wijedasa;Please go.

    Nihal Amarasekera Tuesday, 22 August 2017 10:34 AM

    Sick of listening to these Air Stories.

    Nimal Tuesday, 22 August 2017 11:12 AM

    Sri Lankan had a bright future under the management of Emirates. However, due to family appointments of the previous regime began the downfall of our national carrier.

    Dayan Tuesday, 22 August 2017 11:42 AM

    It was an 'Economic Crime' to nationalize profit making SL Air line under Emirates and turning into 'loss enterprise' because king want to get under 'Family control'I don't know how you call SL Air line as a 'National Asset' when it asset base over 'minus 65 billion rupees'

    Lakshman de Silva Tuesday, 22 August 2017 01:14 PM

    So, Nimal Cooke gets his 10% commission which elevates his commissions from SRi Lanka public funds at now 300 M USD. A Former Car salesman now a multi millionaire from bribery and undeclared tax free money

    ed Wednesday, 23 August 2017 04:51 AM

    MR. SUSIL PREMAJAYANTH , YOU HAVE BEEN A VERY PROMINENT MINISTER WITH THE FORMER REGIME AND STILL WE SEE YOUR CONDUCTS AND SPEECHES WEIGH IN THEIR FAVOR. HOW CAN YOU KEEP ONE LEG ON EITHER SIDE AND TALK ABOUT YAPALANAYA AND INDIRECTLY SUPPORT FORMER REGIME? THIS SHOWS THAT YOU ARE NOT TRUTHFUL TO THE PUBLIC AND TO YOURSELF. ARE WE TO BELIEVE YOUR NEXT MANIFESTO OF JO ???? GOOD LUCK !


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