26 September, 2020

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SriLankan Airlines Airbus Deal

By Rajeewa Jayaweera

Rajeewa Jayaweera

“With accumulated losses of Rs 105 billion & negative net assets of Rs 65 billion, UL bought aircraft worth Rs 290 billion”

This nation’s track record in terms of leasing and purchasing of commercial aircraft can justifiably be termed as abysmal.  

Some background information

No records of corruption allegations are available in the public domain of early aircraft purchases by Air Ceylon. Those involved and observers are long gone. There were some unconfirmed reports of foreign carriers dumping old aircraft when assisting Air Ceylon under commercial agreements. 

The first known dubious lease agreement relates to the two Lockheed L1011-500 variants purchased by Air Lanka in 1980 for delivery in 1982 and leased out to British Airways in 1984. The amount paid by the lessee to Air Lanka was less than that paid by Air Lanka to the original lessor. According to the Presidential Commission of Inquiry 1986 (PCoI) report, there were dubious payments to a third party. The Commissioners found fault with the entire Board of Directors, which included the then Cabinet and Treasury Secretaries. Nevertheless, there were no porsecutions, and the report mothballed.  

Next was the purchase of two A320 and five A340-300 Airbus aircraft during the Premadasa Presidency in 1990 for delivery commencing 1992. Subsequently, President CBK’s dispensation reduced the number of aircraft. There were allegations of commissions paid by Airbus to a leading mercantile establishment with close connections to the former Head of State. An investigation launched found no wrongdoings nor doers, and the investigation fizzled out.

Then came the mother of all aircraft purchases, the decision to purchase six Airbus A330-300 aircraft, four A350-900 aircraft, and the leasing of an additional four aircraft of the same variant during the second Mahinda Rajapaksa administration. Six A330 aircraft were delivered, and the Yahapalana dispensation canceled four A350 jets. A cancellation fee of USD 115 mil was paid in addition to the pre-delivery payments of over USD 26 mil already paid to Airbus. An additional four A350 aircraft remain in the order books. 

As customary in this land like no other, change of governments bring about investigations into corrupt deals of the previous government. A considerable furor ensued over the agreed lease price for the first ten aircraft after the government change in January 2015.

The Yahapalana government appointed a Board of Inquiry (BoI) headed by senior attorney-at-law JC Weliamuna. Rs 3 mil was paid for this hurriedly prepared report. The Boi report raised some valid and compelling malpractices. The report was critical of the decision to re-fleet with the acquisition of new aircraft requiring a capital outlay of approximately USD 2.3 billion (around LKR 290 billion) despite the airline’s abysmal financial status. The investigators also found fault with the methodology adopted. However, any possible reference to corruption was limited to a ‘directive’ received by the ‘4 man Task Force’ from unspecified sources. The report concluded, “Though there is no material for the BoI to point to specific individuals, there is prima facie evidence to initiate a high-level criminal investigation into the entire re-fleeting exercise.” 

“Given the above, the BoI recommends that an appropriate criminal investigation be directed in this regard.” 

The Yahapalana appointed Chairman at the time declined to even internally investigate some of the less critical findings in the BoI report. There was no mention of the involvement of commission payments related to Re-fleeting. The report is part of history.

Next was the Presidential Commission of Inquiry (PCoI) appointed by President Sirisena to investigate into the malpractices of SriLankan Airlines (UL), SriLankan Catering and Mihin Lanka during the period January 1, 2006, and January 31, 2018, headed by a retired Supreme Court judge and four others. The PCoI deliberated for nearly one and a half years and submitted a 1,800-page report with a 900-page annexure. The CID recorded statements from over 550 persons, and almost 150 others testified before the PCoI. Nevertheless, not a single Director, including Director/CEO Kapila Chandrasena testified nor were they cross-examined. They only provided affidavits. 

The PCoI report, prepared at an unspecified cost but bound to run into many millions of rupees, was handed over to President Sirisena on July 3, 2019. On August 29, 2019, the Cabinet of Ministers approved former President Sirisena’s proposal to forward the report to the Attorney General. Nothing further had been heard. The report’s whereabouts are unknown. 

Preparation of Re-fleeting plan

The 4-man Task Force was driving the entire re-fleeting program comprised of CEO Kapila Chandrasena, the Chief Operations Officer (a Pilot), Head of Finance and Head of Engineering. The Chief Marketing (Commercial) Officer, with an MBA in Aviation Management and over 30 years’ experience in airline Sales, Marketing, and Commercial activity, perhaps the most knowledgeable person in the airline at the time in the vital area of Planning, was excluded from this core group.  It is necessary to declare; he was my superior during a part of my time with the national carrier and a close personal friend. However, it has no bearing on the issue at hand. 

The development of a Strategic Business Plan (SBP) plan was entrusted to a former Chief Financial Officer. He, together with inputs from senior staffers, developed an SBP in 2010. The plan entailed the part divestiture of the profitable business units i.e., Ground Handling, Engineering, and Catering, to raise the much-needed capital for the airline’s operations. The SBP envisaged a fleet size of 24 aircraft by 2014/15 (see Table 1).

A foreign Consultancy firm, Via Capital/InterVISTA, was hired in 2011 to review and validate the SBP. Via Capital was a fly by night company riding piggyback on InterVISTA. Their review dated May 27, 2011, was submitted to the Board of Directors on June 27, 2011. Director/CEO Chandrasena confirmed the acceptance by the Senior Management Team of the InterVISTA review, the revised financials, and the impact on profit during the term of the plan. He also confirmed fundamental modalities of the SBP and InterVISTA studies were similar. However, the InterVISTA review, which supported 23 aircraft, differed from the 24 jets recommended in the SBP.

Another foreign Consultancy firm Seabury hired in 2012 submitted two plans titled ‘Widebody fleet renewal I and II’ on February 26, 2013.  This document, primarily a Re-fleeting Plan, validated the initial SBP along with modified financials of InterVISTA. The Re-fleeting plan recommended the acquisition of six A330-300 and seven A350-900 aircraft (total of 13 widebody aircraft) by 2019/20. The document provided a comprehensive comparison of the pros and cons between A350-900 and Boeing 787-8/9 aircraft. 

Tables 2 and 3 provide a summary of Forecasted Revenue and Profit/Loss over five years in the initial SBP as well by foreign Consultants. Each of the Tables also contains Actual Revenue and Profit/Loss each year between 2010/11 and 2017/18. 

Readers will note substantial variances between Projected and Actual Revenue (Table 2) as well as Projected and Actual Losses (Table 3). Most organizations, when faced with such significant variances between Projections and Actuals, would revisit and revise financials besides adjusting Capital Expenditure and expansion plans.  

SriLankan Airlines, on the other hand, proceeded with aircraft acquisition plans regardless.

Table 1 also contains the recommended fleet size in the respective plans. ‘Fleet meant to be’ column contains fleet size, had the airline taken delivery of all-new aircraft.

Whereas the SBP and InterVISTA plans projected achieving profitability by 2013/14, the airline continued its loss-making streak, peaking out at USD 253 mil in 2013/14 (Table 3). 

Despite the downward trend in global fuel prices commencing 2015, the company’s losses continued and remained above USD 100 million each year. Fuel prices were lowest in 2016, averaging USD 40.68 per barrel against USD 109.45 in 2012. The airline’s loss in 2015/16 amounted to USD 156 mil. 

Despite continuous losses, management did not consider other options. Replacing aging aircraft with leased aircraft with not so new jets, a more phased out acquisition of new-generation aircraft, and change of Business mode are some such options. 

Board Approval

Board of Directors during the re-fleeting exercise were: Nishantha Wickremasinghe (Chairman), Kapila Chandrasena Director/CEO, Nihal Jayamanne PC, Shameendra Rajapaksa, Manilal Fernando, Sanath Ukwatte, Susantha Ratnayake and Mrs. Lakshmi Sangakkara

On March 1, 2013, a special Board Meeting was held in the Conference Room of the official residence of former Speaker Chamal Rajapaksa, arranged courtesy of his son Shameendra Rajapaksa, also a Board member. The former Speaker subsequently denied all knowledge of this meeting, which is no better than the denials of Ravi Karunanayake during the Bond Commission hearings. The final decision to purchase eight A350-900 aircraft is believed to have been made during this meeting. Though not stated in Board Meeting minutes, there is also some speculation of the presence of outsiders at this meeting.

Minutes of another Special Board Meeting held on March 14, 2013, indicates, the Board formally approved the following and resolved to seek GoSL approval to;

Item 3. Purchase six (6) A330-300 aircraft for delivery commencing the last quarter of 2014/15.

Item 5. Purchase by way of ECA backed financing four (4) A350-900 aircraft for delivery commencing 2020/21 

Item 6. Source for an additional three (3) A350-900 aircraft on lease for delivery in 2017 

Cabinet Paper

It was in this background, former Minister for Civil Aviation Priyankara Jayarathna submitted Cabinet Paper No 2013/08 under Ref No MCA/AV/04/100 dated March 27, 2013, by Minister of Civil Aviation dated March 27, 2013.

The memoranda recommended the purchase of;

six Airbus A330-300 aircraft powered by Rolls Royce Trent 700 engines for delivery in 2014 2015

four Airbus A350-900 aircraft powered by Rolls Royce XWB engines for delivery to commence in 2020 2021 for replacement of A330-200 aircraft

to lease aircraft for an additional three A350-900 aircraft to be delivered in 2017 as a replacement for A330-200 aircraft

to fund (1) above on sale and leaseback method for all six (6) A330-300 aircraft. As these are current generation aircraft, it is not proposed to own any of them due to the risk of falling value in the future

to make funding available for USD 80 million required for the SLA widebody re-fleeting program during the second and third quarter of 2013

It further stated, Airbus had offered a USD 25 million credit towards purchases made from Airbus to develop an aircraft maintenance capability (MRO) in Sri Lanka. Also on offer was an additional USD 6 mil in credits to help set up an advance aircraft technical training center.         

The cabinet memoranda recommended the purchase of a total of thirteen (13) new aircraft as recommended in Seabury Re-fleeting Plan and not 14 new planes as per the final Purchase Order.

A summary of observations to the cabinet paper from several ministries and organizations is found in Table 4.

On April 16, 2013, a meeting was held in the office of Secretary to Treasury (ST) attended by himself, Secretary Civil Aviation, Deputy Treasury Secretary, Chairman UL, CEO Kapila Chandrasena, DG Public Enterprises, and Asst. Director of Public Enterprises. 

During the meeting, ST had instructed Treasury officials to withdraw cabinet paper no 2013/07 as aircraft purchases did not require cabinet approval.  

Minutes of this meeting were prepared by CEO Chandrasena instead of Treasury officials. Minutes stated, “It was then agreed, Sri Lankan Airlines should proceed with the recommended Wide Body Replacement exercise, as approved by the Board.”

The directive to purchase aircraft was deceitfully camouflaged as a collective decision.  

Even though Jayarathna signed the cabinet memoranda, testifying before the PCoI, he had stated the following. “Although as Civil Aviation Minister, he signed documents on Sri Lankan Airlines to obtain state funds to be submitted to the Cabinet, the five-year plan of the airline mentioned in Cabinet papers was never shown to him. Though he was the Civil Aviation Minister, he had never held discussions with the Board of Directors of the airline. The airline had not obtained the approval of the ministry for purchasing aircraft.” – The Island, October 24, 2018. 

On June 11, 2013, Directors approved the purchase of Rolls Royce Trent engines for A330-300 aircraft as recommended by Fleet Replacement Working Group (Board Minute 13.08/05).

On June 19, 2013, CEO Chandrasena ordered six A330-300 aircraft during the Paris Air Show (see Regina vs. Airbus SE).

On June 25, 2013, Directors approved Board Paper FIN/2013/06/63 for the purchase of four A350-900 aircraft.    

On June 28, 2013, CEO Chandrasena signed up for four A350-900 aircraft (see Regina vs. Airbus SE).  

Precarious cash position

CEO Chandrasena, on May 14, 2014, submitted Board Paper FIN/2013/04/51 “to appraise the Board of options available following the rejection by the Treasure of our request to trade Treasury Bonds to raise cash.” The document apprised Directors of the rejection by the Treasury of the proposed sale of two Treasury Bonds expected to raise USD 200 mil. It also highlighted the company’s immediate need of USD 500 mil to fund operations, including capital expenditure and servicing of loans during the coming year.  He further stated unless a minimum of USD 401 mil was not forthcoming (this did not include settling dues to CPC USD 80 mil and AASL USD 8 mil);

1. A future turnaround as projected in the revised Business Plan cannot be realized and

2. The company will not have any funds to manage the day to day operations

It was therefore recommended, the shareholder be engaged for a capital infusion or to prepare a plan to Re-structuring the airline. Such an exercise would include a change in the business model, a new network, closure of loss-making stations; reassess aircraft requirements; renegotiate all aircraft lease agreements and employment contracts. There was no mention of canceling existing aircraft purchase commitments. 

It was a strange predicament for an airline that had committed itself to purchase aircraft worth USD 2.3 billion one year ago.

The airline commenced taking delivery of A330-300 aircraft on November 14, 2014.  

A comparison

This writer spent some time in the UK in 2015. During a social engagement, I met an aviation professional involved in aircraft leasing. I shared some of my articles on the national carrier, which aroused his interest. I then provided him with the lease rentals of UL’s aircraft acquisitions and requested him for his comments. He very graciously compared the lease payment for each aircraft with market rates at the time. Table 5 contains comparative lease rates.

MSN denotes the Manufacturer’s Serial Number. My source opined, purchase prices seemed higher than current market rates. However, they would also depend on the Type and Version (Low Gross Weight vs. High Gross Weight) and seat configuration. He also opined the airline could have negotiated on the basis of the newer versions A330-800 and A330-900 neo (new engine option) due to enter the market. The newer versions, with a 14% reduction in fuel burn off per seat, due to enter the market in the not too distant future, would depress the market for the A330-300 ceo version.

The monthly differentials between USD 1.5 mil and 2.5 mil cumulatively work out to an amount between USD 115 mil., and USD 180 mil. at the end of 6 years, roughly the time, a new aircraft would fall due for its first D Check. Some airlines opt to replace aircraft at the time of D Checks.

A cover-up?

With the change of government in January 2015 and the appointment of a new Board of Directors, the aircraft acquisition program came under scrutiny. Meanwhile, the airline found itself burdened with lease payments for seven A330-300 aircraft. It had a crippling effect. 

The first Yahapalana Board of Directors were: Ajith Dias (Chairman), Rajan Brito, Chanaka de Silva, Mahinda Haradasa, Rakhitha Jayawardena, Lt.Col. (Retd.) Sunil Peiris, Hadindra Balapatabandi, and N. De Silva Deva Aditya.  The CEO Suren Ratwatte was not a Board member. 

Directors met on October 27, 2016. Board Minute 7.3 of this meeting is titled ‘Airbus being investigation by EU on Bribery Charges.’ Rajan Brito informed his co-directors of the said investigation over aircraft deliveries to UK and Switzerland tabled draft letters for dispatch to Airbus (for aircraft), Rolls Royce (for engines), and AerCap (for the lease of aircraft). The drafts informed the said three companies; transactions may not have been based purely on commercial grounds but also monetary considerations. A350 aircraft with a market value of USD 1.2 mil was valued at USD 1.4 mil.  Letters requested the information on the involvement of any facilitators in securing the deals. 

During the following Board meeting on November 24, 2015, it had transpired, the Chairman, had not written the three letters as previously agreed on the advice of CEO Suren Ratwatte and two other Chief Officers. They had opined, UL was in negotiations with Airbus and Rolls Royce for favorable terms to cancel aircraft purchase commitments. Such letters might sour relations and be disadvantageous to the airline. 

Considering millions of dollars involved, the former Chairman ignoring Brito’s suggestion to say the least is controversial and highly questionable. 

The Chairman, a businessman, is the joint owner of a chain of coffee houses with a renowned former sportsman and also a very close friend of the Chairman. This individual is also the brother-in-law of former CEO Chandrasena (more later in Regina vs. Airbus SE).

It is this writer’s considered opinion, Brito’s letter required the attention of Parquet National Financier (PNF), the French counterpart of the British SFO. Institutions such as SFO and PNF receive and investigate complaints related to bribery and corruption. 

PNF recently prosecuted Airbus over aircraft sales to airlines in China, Colombia, Nepal, South Korea, the United Arab Emirates, Saudi Arabia (Arabsat), Taiwan, and Russia.

Regina vs. Airbus SE   

On January 31, 2020, the Crown Court at Southwark in the UK passed judgment on a case filed by the Serious Frauds Office (SFO) against Airbus SE. 

The following has been extracted from the Statement of Facts utilized in the Regina vs. Airbus SE litigation in the Crown Court at Southwark. The SFO had investigated aircraft sales to carriers in Malaysia, Sri Lanka, Taiwan, Indonesia, and Ghana.

A person referred to by Airbus as Intermediary 1 had incorporated a straw company on October 5, 2012, in Brunei. The sole owner/employee had no aviation experience.

On March 29, 2013, Airbus entered into a consultancy agreement with Intermediary 1 in relation to the sale of six A330-300 aircraft, four A350-900 aircraft, and the lease of an additional four A350-900 aircraft. The applicable fee was USD 11.84 mil. (USD 1 mil per A330, USD 1.16 per A350 and USD 300 per leased A350)  Readers will note, even though Board Paper FIN/2013/06/63 dated June 25, 2013, approved the purchase of four A350-900 aircraft, the consultancy agreement signed on March 29 refers to eight A350-900 aircraft. CEO Chandrasena was aware of it all along. On October 30, 2015, Airbus also signed a Market Share Agreement with Intermediary 1. The agreement stipulates, no competitor aircraft would be purchased before October 30, 2015, in return for an additional lump sum payment of USD 5 mil. 

Consequent to CEO Chandrasena signing up for six A330 and four A350 aircraft at the Paris Airshow in June 2013, Intermediary 1, on August 26, 2013, submitted an invoice for USD 1 mil pursuant to the consultancy agreement. Airbus is a company based in the eurozone and required a euro account to make payments. A Euro account had been opened with Standard Chartered Bank in Singapore. A person identified as SLA 1 (SriLankan 1) communicating with Airbus employees had submitted a further invoice for USD 1 mil on December 2, 2013, through a private Gmail account. Airbus transferred a sum of Euro 1,454,651.24, being the equivalent of USD 2 mil to the account on December 27, 2013.             

Meanwhile, Airbus had applied to UK Export Finance (UKEF) for export credit facilities in connection to the aircraft deal inked with UL.  UKEF, during a due diligence exercise, had questioned Airbus if Intermediary 1 was the wife of SLA 1. As UKEF questioning became more intense, Airbus withdrew the application for export credit finance. Dissatisfied with the information provided by Airbus, UKEF reported the matter SFO.

According to information available in the public domain, funds in the Standard Chartered Bank euro account in Singapore had been transferred to former CEO Chandrasena’s account in Australia. Chandrasena has supposedly made two to four remittances to individuals in Sri Lanka, one of them, apparently a sportsman. There is speculation if this sportsman is the same close associate and business partner of the former UL Chairman (see Conspiracy?). It also proves UKEF’s suspicion; Intermediary 1 was the wife of SLA 1. It requires no Einstein to decipher the identity of SLA 1!  

Conclusion

The aircraft deal was worth USD 2.3 billion or thereabouts. Consultancy payments amount to USD 16.84 mil or 0.73% thereof. Commission payments are an integral part of industries such as aircraft, arms, ordnance, etc. By no stretch of imagination can it be accepted, this aircraft deal entailed a commission of 0.73%. It can only be a small part paid to a small-time facilitator. 

What is more important is how much more was paid/was to be paid, and who are the recipients? In this context, I would once again draw the attention of readers to Table 5. Since the figures are a comparison of limited data and facts and not the deliberations of an in-depth study, they must be utilized as a guideline only.

USD 115 million amounts to 5% and USD 179.8 mil 7.78%. Payments for the four aircraft to be leased need to be factored in. As a rule of thumb, the industry norm for such transactions is more in the range from 4% to 7%.   

Utilizing the more conservative figure of USD 115 mil. and Chandrasena’s allocation of USD 16.84 mil, who was tagged to receive the balance USD 98.16 mil?  

President Gotabaya Rajapaksa has his work cut out. At least this time around, will we see a no holds barred investigation? 

Will the Chandrasena’s be offered a deal if they turn state witnesses and help to bring the real culprits to book? 

Or, will the findings be mothballed once again, and the Chandrasenas walk free? 

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Latest comments

  • 13
    1

    I feel sorry for the writer. He has toiled hard to investigate and research the facts about these aircraft deals and has laboriously listed them in a CT article. Soon, commentators (readers) will opine on the article, debate and insult each other and generally discard the work he has ardently compiled, relishing in the mud-slinging and rhetoric instead. The writer must then make an analysis. Has his trouble been worth it? Will his future articles on this forum be as scientific, methodical and (sorry about this – boring) to the readership? What’s new about corruption in SL deals? Points to ponder..!

    • 3
      0

      Lasantha,
      You have a point. Considering the fact that a masterfully crafted scheme backed by the then executive Prez MaRa & the family was able to evade all the scrutiny of a smell of grand corruption until revealed finally from foreign sources, it is extremely difficult to expect anything other than, as the writer himself has put, the report become another mothball allowing all the conspirators – not just Kapila Chandrasena – walk free. The corruption has infiltrated not just the top level of bureaucracy but also the political system that has close ties with it making it very difficult to punish the thieves.

      Public also make it hard for the few honest investigators to do their job by looking at charges through colored glasses. As you have correctly suggested, all the responses to the essay will follow lines of political biases. Politicians love to see it b’cos it makes very for them to get away with dracula type sucking the blood out of the poor economy. Public must understand that these are the instances where patriotism must rise above the party loyalty. Unfortunately, media will push these two “mega corruptions” (Bond scam & the Airbus scam) into the forgotten list by focussing heavily on Shavedra Silva case. We must not let this happen!

  • 1
    0

    The aviation industry in SL has always been a gentlemen’s club providing lucrative jobs to those with the right connections. I can vaguely remember Air Ceylon, which, if I am not mistaken, was wounded up by the UNP govt. under JR for mismanagement & continued losses, thereafter, a new flagship air line was incorporated with much hype to compete with the big players internationally. Even then, there were whispers of corruption when the aircraft were purchased from ailing Lockheed Corp. but nothing changed fundamentally with high profile political board of directors enjoying the generous perks. It was even a known fact that Premadasa appointed his son in law who was in the cut flower export business as a director so that he could benefit from free air cargo perks he was entitled to as a member of the board. Irregularities are only unsubstantiated rumours, unless whistle blowers make it public.

    Whistle blowers, due to their conscience or malice, reveal irregularities & corruption but it is a fact that they never gain personally as they are shunned by employers in general & usually never able to work in that industry anymore. Nevertheless, whatever the reasons, it is commendable as corruption will never come to light if not for the self sacrifice of whistle blowers & I raise my cap to Mr Jayaweera. However, considering the corrupt climate we have in SL (& has been all these years), I doubt if the true scale of corruption & the beneficiaries will ever be prosecuted, the most likely victim at the end being Mr Jayaweera himself, criticised for personal vendetta against Sri Lankan airlines. Whether any action is taken or not by the authorities, it is clear that Sri Lankan Airlines is a luxury we can’t afford & it’s time public funds going down a black hole is stopped immediately. Sri Lankan Airline should now sink or swim & no more lifelines with public funds.

  • 3
    0

    Lasantha I agree with you. Though in my opinion Rajeewa ia a racist I have to admire his home work behind this article. Though I am a novice in finances I can confidently say Air Lanka has been fleeced for years since the time of Air Ceylon. Yet the maximun blow was dealt during Rajapaksa time. What Rajeewa needs is further to do some work , on Mihin and add up the losses for our sorry nation. Just thing about bringing the pet puppy by our own President and the cost for the tax payers. It is a minisculle of the abuse compared to real loot which took place during MR times. Also the free rides taken by Rajapaksa family,relatives,friends Rajapaksa s side kicks and their family, ministers who accompanied on each visits and their family and relatives —etc —etc. At times hundreds have gone for Geneva parties, sports promotions and MS floged the dead horse further throughout his stay. Imagine the odacity he had to complain about the snacks he was served. Trust me every Govt service including Telecom, Cricket Board, Port, Banks are in the same situation, if not worse. Now that most of them are filled up my trusted people , public will be in bliss until nexy inquiry commission is established by spending millions more. If not for AirBus revelations ,we would not even come to know the real losses. Lankan politicians especially Rajapaksa have made corruption and looting an ART. Well done and way to go Stupid Lankns of Silly Lanka.

  • 4
    1

    Just see the stupidity behind this one incident. Air Lanka gets looted by Rajapaksa Govt and then a commission is established by further spending millions ,losses are added in totalling, fact finding, and come up with remedy. The new CEO dosent even agree with the recommendations and RW/MS shelves it to further flog the dead horse and now the old thieves have return back for yet another commission, recommendations and deal making. (add Mihin and MIG to this losses). OMG my head is already spinning.

  • 6
    0

    Corruption in Srilanka is sponsored by the top of the political leadership of both UNP and SLFP (SLPP). Judiciary is aligned with the political leadership in safeguarding these criminals. The Mahanayage’s are not worried about these crimes but worried about singing National anthem in Tamil as long as they are having a wonderful life. They don’t teach what Lord Buddha said but they teach what Mahinda taught to them (lie, cheat, bribe).

  • 3
    0

    Mr. Jayaweera: I just rushed through it. I heard, after the meeting in Speaker Chamal Rajapake’s house, the decision was taken to establish a “buying committee” consisted of four people. But the committee had only two and was Kapila Chandrasena and the other may be chairman or one Engineer.
    The problem is every high caliber corrupt deal involves prominent politicians. So, it will go to the garbage bin. They will choose Judges, courts and court dates etc. Crminals will be in the Prison Hospital (right now Udayanga Weeratunga is in the prison hospital). How do you overcome those.
    I think after the case, Kapila may migrate to Australia or so, after that every one will live happily ever after.
    But youn in Sri Lanka earns via SERVICE INDUSTRY (TOURISM) AND NANNY WORKING OVERSEAS (500 a year come in coffins because of beating by the house owners).
    Sri Lankan media will not publish in Sinhala or Tamil because they are paid.

  • 4
    0

    Rajeewa: The last “Proposition” in your conclusion will be the most certain outcome of all these “FINDINGS” and that in one word is: “MOTHBALLED”. The very same “SLAVES” will “Empower” both the UNP and now SLFP Plus SLPP in succession at all the elections . In a “Face Book” presentation a few days back, I saw, Ranil W in conversation with MR: Ranil W says to MR: “Machang, Api Horakam Keruwata, Banum Ahanne JVP Un” Then MR replies to Ranil: Eka Nang Hari. Un Kawadawath Andu Kareth Neha. Namuth Minissu Unta Kawadawat Balaya Denneth Nahe. Eka Nam Sure. Eka Nisa Bayawenn Epa Machan”. ( In English: Ranil W tells MR: “Friend though both of us robbed, the people blame JVP. Then MR tells Ranil W: That is correct. JVP never Governed the country and the people will never give power to JVP. So don’t worry friend) That is the WAY all these findings would be placed in “Waste Paper Basket”.

  • 4
    2

    The revelations by Jayaweera are shocking but not surprising.
    Since independence corruption in public service has become the norm rather than the exception. Over the years, most of the politicians and bureaucrats became corrupt and greedy. As pointed out by Chiv corruption and looting became not only an Art but a Fine Art under Mahinda Rajapaksa’s rule. Everyone close to the Rajapaksa family looted the Treasury at will and pleasure. Rajapaksa turned a blind eye because he himself was corrupt.
    The rot can be fathomed from the arrest of two top bureaucrats I.H.K. Mahanama, the President’s Chief of Staff, and P. Dissanayake, the head of the State Timber Corporation (STC), by the CIABOC on May 03, 2018.
    They were arrested while accepting 20 million (rupees) in Colombo.
    Mahanama, a former secretary of the lands ministry, had asked for a bribe of 540 million Sri Lankan rupees ($3.43 million) from an Indian investor interested in acquiring a state-owned sugar factory.
    The two were arrested at a car park of a hotel in the capital, Colombo, while they accepted 20 million rupees (a part payment) from the investor for the transfer of land and machinery.
    At the time of arrest, Mahanama was the Chief of Staff of the President’s office. Though he was not the Secretary to the Land Ministry he was wielding considerable influence with that Ministry!
    He would not have been caught if not for the fact the Indian investor complained to the then Prime Minister Wickremesinghe when the latter visited Kantalai.
    This arrest of high ranking officials exposed the deep-seated and endemic corruption in the public service. There must be many others still at large.

  • 5
    0

    Rajeev a well elaborated piece. Basically, in short corruption was rampant in the National airline from AirLanka days even Rakitha’s time a 20 year old 747 was taken over a boeing offer of a better equipment with 2 spare engines. During Ranasinghe Ps time like you mentioned Two Lockheed L10s Had two different door sizes and the cargo pallets would go onto one aircraft and not to the other. The planes went to Fukuoka carrying orchids of the son in law with no passengers. The list goes on. Sri Lankan is a paradise alright for thieves and scavengers.Straightforward, forthright people have no say. If you challenge them you are targeted. So many opportunities to steal due to the sheer numbers. Our branded steel cutlery was found in a Delhi hotel, or on the Pettah payment. 50 blankets goes missing per day. If you remove the pillows from the days time short haul flights we save millions a month, but wouldn’t do it. If you re contract the staff transport companies (annual budget of Rs.300m plus) with Sri Lankan branding on two sides of all vehicles, we could save on the local advertising budget. Won’t do it. In short this company is ruined by shady, covered crooks who says just keep quiet, don’t say anything if you want to survive. I can name many! . I have been in service during the most corrupt era of the company and the imprisoned CEO was a real Gold digger. He made commissions on systems, refund of tickets, IT reservation systems, internet booking department, GSA appointments and even Mihin cargo selling rates allocated to one agent in the city. Basically this airline is humiliated and degraded as a loss making company mainly because we have paid 43% above the market rates for these aircrafts and with the highest ticket prices, with 89-94% passenger loads we cannot meet the fix operating cost of these aircraft.

  • 7
    0

    We are not daft. Sri Lankan and Mihinair were run as a family enterprise. There will be more half-hearted enquiries resulting in the attribution of blame to a fall guy who will spend a few weeks on the merchants ward before being quietly released. Fury towards Airbus will be expressed without focusing on the local architects of this scam that robbed ordinary folk of the $116m that could have paid for schools, roads and hospitals. As night follows days ordinary Lankans are having the bread taken out of their mouths by a vile political class of all stripes. Call a spade a spade.

  • 4
    0

    A nice, informative piece by Rajeewa. Just a few points to add
    *
    How about a little name-and-shame? All the names are published in the Weliamuna Commission Report. COO was Druvi Perera. This is part of the public record.
    *
    There is no mention of the new A320/321 aircraft also leased in a similar manner.
    *
    These contracts have no termination clause – this has been admitted by the Clowns running Sri Lankan. This means they have to pay these high lease fees for the duration of the 12 year lease period. This represents a huge liability (100s of Millions US$). It also means that Sri Lankan will be unable to make money – makes no difference what they do. Don’t believe any talk from Sri Lankan “Management” – they’re just pocketing huge salaries for doing nothing.
    *
    The reason for not having a termination clause? Easy – this increases the total value of the deal hence the amount of Commission paid. This is what these deals are really all about.
    *
    The 4 A350 still on order appear to also have no termination clause in the contract – this is why Sri Lankan has been unable to cancel this order. This order represents a liability of US$ 1 Billion to the Sri Lankan tax payers.
    *
    Sadly any investigations will go nowhere imho – the people involved are all protected.
    *
    It made my day seeing Kapila Chandrasena in hand cuffs – unfortunately this is probably as far as it will go imho.

  • 5
    1

    Private sector company owners CEO ,Chairman’s namely from the blue chip companies are involved in money laundering and financial crimes with the government we have seen how some companies grew into large organisations from 2005 to 2015 now these retired chairman’s and present chairmen s has been appointed again to top post because they want to continue with their nefarious activities again . Its the same with stock brokers and related companies doing the same thing Bond scam reports reveals the details of how the Central bank was robbed by these criminals the public has to pay for for their sins unfair taxes forced on them. the floating voters you can give you vote to Lotus with 2/3 majority and create a record in money laundering 2019 to 2025 or extend till 2030 choice is yours

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