17 October, 2017

WikiLeaks: Family-Run Airline Manager Vass Links To Financial Impropriety

“The Government of Sri Lanka (GSL) is planning to launch a state-run airline aimed at providing low-cost travel for Sri Lankan migrant workers and tourists to the Middle East and India. The budget carrier, apparently conceived and advanced by close advisors to Sri Lankan President Mahinda Rajapaksa, is to be called Mihin Lanka, after the President (short for Mihindu, which is the Pali name for Mahinda). The non-transparent way in which the President’s coterie has advanced the airline has elicited extensive controversy.” the US Embassy Colombo informed Washington.

Mahinda and Vass

Mahinda and Vass

The Colombo Telegraph found the related leaked cable from the WikiLeaks database. The cable dated March 09, 2007 was written by the US Ambassador to Colombo,Robert O. Blake.

The US ambassador wrote “Critics argue that the carrier’s lack of transparency stems from its leadership – a handful of politicians and advisors close to the President. According to a Civil Aviation Authority gazette, the Board of Directors of Mihin Lanka will be composed of Defense Secretary Gotabaya Rajapaksa (the President’s brother), Finance SIPDIS Secretary P.B. Jayasundera, Air Marshall Roshan Goonetilake, and Presidential Coordinating Secretary Sajin de Vass Gunawardena. Gunawardena, who has been appointed ‘Accountable Manager in charge’ of the airline, has been linked to a number of past allegations of financial impropriety involving government procurement.

“The airline is to be a fully government-owned company utilizing state funds. The initial capital contribution is estimated at around 500 million Sri Lankan Rupees (approximately USD 4.6 million), with an estimated total cost set at Rs. 1.5 billion (approx USD 13.8 million). The government initially intended to tap the state-run Foreign Employment Bureau and the Employees’ Trust Fund for start up capital in the venture. After a strong public backlash supported by negative media reporting against using public funds, the government may be seeking financial backing elsewhere, but has not publicly identified possible alternate sources.

“President Rajapaksa sacked Minister of Ports and Aviation Mangala Samaraweera, who had opposed the Mihin Lanka arrangement (ref A). Rajapaksa did not appoint a replacement for Samaraweera, instead keeping the Ports and Aviation portfolio for himself. On February 17, Samaraweera, who had also served as Rajapaksa’s Minister of Foreign Affairs until he was removed in the January 28 cabinet reshuffle, sent a letter to the President listing a series of grievances (ref B). In this, Samaraweera stated his strong disapproval of the Mihin Lanka project due to the planned use of public funds and the rushed approval process that circumvented normal administrative and financial regulations.”

Placing a comment the ambassador wrote; “Civil Aviation Authority officials and representatives of Airport and Aviation Services Ltd. appear less than enthusiastic about the Mihin Lanka venture. In fielding Post’s queries, they seemed cautious and uncomfortable, repeatedly stating that they were not aware of many key operational details. Post also notes that local media coverage of the Mihin venture no longer mentions any of the earlier controversy around the airline. In fact, coverage disappeared entirely for about two months, and only resumed this week with brief and uncritical coverage of the test flight described in para 3. Many Sri Lankans view the Mihin Lanka venture as a sign that the populist and socialist President Rajapaksa may be tempted to practice crony capitalism if he can avoid press, opposition, and regulatory scrutiny.”

Read the cable below for further details;

VZCZCXRO0826
RR RUEHLMC
DE RUEHLM #0394/01 0681026
ZNR UUUUU ZZH
R 091026Z MAR 07
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 5614
INFO RUCPDOC/USDOC WASHDC
RUEHNE/AMEMBASSY NEW DELHI 0727
RUEHKA/AMEMBASSY DHAKA 9947
RUEHIL/AMEMBASSY ISLAMABAD 6916
RUEHKT/AMEMBASSY KATHMANDU 4991
RUEHGP/AMEMBASSY SINGAPORE 5670
RUEHBK/AMEMBASSY BANGKOK 3155
RUEHKP/AMCONSUL KARACHI 2157
RUEHCG/AMCONSUL CHENNAI 7489
RUEHGV/USMISSION GENEVA 1872
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION
UNCLAS SECTION 01 OF 03 COLOMBO 000394 

SIPDIS 

SENSITIVE 

SIPDIS 
STATE FOR SCA/INS AND EEB/TRA/OTP 
STATE PASS USTR, DOL/ILAB FOR TINA MCCARTER 
SINGAPORE FOR FAA 
E.O 12958: N/A 
TAGS: ECON EIND ETRD EAIR EINV KCOR CE
SUBJECT: SRI LANKA: ALLEGATIONS OF IMPROPRIETY IN CONNECTION WITH 
NEW STATE-OWNED BUDGET AIRLINE 
REF: A) COLOMBO 263 B) COLOMBO 324 

¶1. (SBU) SUMMARY AND COMMENT:  The Government of Sri Lanka plans to 
launch in March 2007 a state-run airline aimed at providing low-cost 
travel for migrant workers and tourists to the Middle East and 
India.  The budget carrier, called Mihin Lanka, has elicited 
criticism from politicians, the press, and the airline industry. 
The recently sacked Minister of Ports and Aviation has charged the 
President with circumventing procedural and financial regulations in 
the process of creating the airline.  Public criticism may have 
caused the President to back away from allegedly planning to deal 
free shares in the venture to himself and close family members and 
political allies.  Even so, the venture hardly appears to be in the 
public interest:  First, the plan to use civil service pension funds 
to start the new venture is risky, as the South Asia region's budget 
airline market is competitive and the GSL has a poor track record in 
running airlines.  Second, if the venture succeeds in building 
market share, it will come at the expense of Sri Lankan Airlines, 
which is still 51 percent government-owned.  End summary and 
comment. 
CONTROVERSIAL BUDGET AIRLINE TO BE STATE-OWNED, NAMED FOR PRESIDENT, 
RUN BY FAMILY AND FRIENDS 
¶2. (U) The Government of Sri Lanka (GSL) is planning to launch a 
state-run airline aimed at providing low-cost travel for Sri Lankan 
migrant workers and tourists to the Middle East and India.  The 
budget carrier, apparently conceived and advanced by close advisors 
to Sri Lankan President Mahinda Rajapaksa, is to be called Mihin 
Lanka, after the President (short for Mihindu, which is the Pali 
name for Mahinda).  The non-transparent way in which the President's 
coterie has advanced the airline has elicited extensive controversy. 

¶3. (U) GSL officials say Mihin Lanka will begin operations this 
month.  (Mihin Lanka offices at the airport and Colombo are now 
open, but a targeted launch of February 4, Sri Lanka's Independence 
Day, came and went with no official explanation of the 
postponement.) On March 5, the airline secured a provisional license 
to fly after overcoming technical problems that temporarily delayed 
its maiden test flight.  Its initial flight from Colombo 
Bandaranaike International Airport to India was a requirement for 
the airline to get an "air operating certificate" from Sri Lanka's 
Civil Aviation Authority (CAA).  The certificate gives Mihin Lanka 
clearance to operate and handle all aspects of a commercial flight 
using a leased Fokker-27 aircraft.  At this time, the airline does 
not own any aircraft. 
¶4. (U) The GSL is billing Mihin Lanka as the country's only national 
airline.  (Note: This is odd, because the government still has a 51 
percent majority Sri Lankan Airlines; Emirates Airlines owns 43 
percent, and the remaining six percent is owned by Sri Lankan 
Airlines employees).  This no-frills carrier is designed to cater to 
local migrant workers traveling to the Middle East, and to tourists 
to and from the Indian sub-continent.  The government says Mihin 
Lanka will also function as a cargo airline, transporting goods 
produced by small and medium scale producers.  The venture plans to 
directly or indirectly create 500 jobs, including positions for Sri 
Lankan Air Force personnel who want to move into civil aviation. 
¶5. (U) The airline is to be a fully government-owned company 
utilizing state funds.  The initial capital contribution is 
estimated at around 500 million Sri Lankan Rupees (approximately USD 
4.6 million), with an estimated total cost set at Rs. 1.5 billion 
(approx USD 13.8 million).  The government initially intended to tap 
the state-run Foreign Employment Bureau and the Employees' Trust 
Fund for start up capital in the venture.  After a strong public 
backlash supported by negative media reporting against using public 
funds, the government may be seeking financial backing elsewhere, 
but has not publicly identified possible alternate sources. 
¶6. (SBU) Critics argue that the carrier's lack of transparency stems 
from its leadership - a handful of politicians and advisors close to 
the President.  According to a Civil Aviation Authority gazette, the 
Board of Directors of Mihin Lanka will be composed of Defense 
Secretary Gothabaya Rajapaksa (the President's brother), Finance 
Secretary P.B. Jayasundera, Air Marshall Roshan Goonetilake, and 
Presidential Coordinating Secretary Sajin de Vass Gunawardena. 
Gunawardena, who has been appointed "Accountable Manager in charge" 
of the airline, has been linked to a number of past allegations of 
financial impropriety involving government procurement. 
AVIATION MINISTER'S OPPOSITION COSTS HIM HIS JOB 
¶7. (U) On February 9, President Rajapaksa sacked Minister of Ports 
and Aviation Mangala Samaraweera, who had opposed the Mihin Lanka 
arrangement (ref A).  Rajapaksa did not appoint a replacement for 
Samaraweera, instead keeping the Ports and Aviation portfolio for 
himself.  On February 17, Samaraweera, who had also served as 
Rajapaksa's Minister of Foreign Affairs until he was removed in the 
January 28 cabinet reshuffle, sent a letter to the President listing 
a series of grievances (ref B).  In this, Samaraweera stated his 
strong disapproval of the Mihin Lanka project due to the planned use 
of public funds and the rushed approval process that circumvented 
normal administrative and financial regulations. 
LAUNDRY LIST OF IRREGULARITIES SUGGESTS IMPROPRIETY 
¶8. (SBU) Since its conception, Mihin Lanka has appeared to evade a 
number of Sri Lanka's standard business start-up regulations, many 
of which former minister Samaraweera outlined in his public letter: 

-The President's October 2006 budget proposal for FY 2007 did not 
mention Mihin Lanka despite plans to use public money to capitalize 
it. 
-Presidential advisors submitted a memorandum to the Cabinet for 
endorsement of the airline only hours before the cabinet meeting at 
which they sought approval of the venture. 
-No capital appraisal report was conducted on the venture. 
-The Board of Investment (BOI) allegedly approved the airline 
proposal in less than 24 hours. 
-The Civil Aviation Authority had already short-listed three budget 
airline operations prior to Mihin Lanka, but put further processing 
of their license applications on hold until after Mihin Lanka 
launches. 
DUBIOUS BUSINESS MODEL: STEAL THE OTHER GSL AIRLINE'S CUSTOMERS 
¶9. (SBU) Aviation industry insiders told Econoff that if Mihin Lanka 
succeeds, it would only be by cannibalizing passengers from Sri 
Lankan Airlines' most profitable routes - those to India and the 
Middle East.  They add that the government's plan to launch the 
airline by wet-leasing a single plane makes little economic sense, 
as the high cost of a crew- and maintenance-included wet lease is 
unlikely to be covered by ticket sales in the low-cost travel 
sector.  Finally, the local aviation market is skeptical of Mihin 
Lanka's prospects simply because the GSL had such a poor track 
record for many years running Sri Lankan Airlines, before bringing 
in Emirates Airlines as an operating partner. 
¶10. (SBU) Comment:  Civil Aviation Authority officials and 
representatives of Airport and Aviation Services Ltd. appear less 
than enthusiastic about the Mihin Lanka venture.  In fielding Post's 
queries, they seemed cautious and uncomfortable, repeatedly stating 
that they were not aware of many key operational details.  Post also 
notes that local media coverage of the Mihin venture no longer 
mentions any of the earlier controversy around the airline.  In 
fact, coverage disappeared entirely for about two months, and only 
resumed this week with brief and uncritical coverage of the test 
flight described in para 3. Many Sri Lankans view the Mihin Lanka 
venture as a sign that the populist and socialist President 
Rajapaksa may be tempted to practice crony capitalism if he can 
avoid press, opposition, and regulatory scrutiny. 
BLAKE
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Latest comments

  • 20
    1

    Well, well Rajapaksa brothers’ shit is hitting the fan big time!
    Thanks for unearthing this cable CT Editors – Good Work!
    Goon Gotabaya’s Defense Ministry Monitoring MP, Murderer cum Kudu Duminda Silva seems to be missing in action and the DiG Vas must be a relative of dear old Sajin!

    BOOMERANG is the name of the game played by the Rajapaksa regime today.
    Things are not going well for the corrupt family. By preventing foreigners from traveling to the northeast Gota is trying to whip up a fear psychosis to distract from the Rajapaksa family’s corruption and justify brother Mahinda’s power grab and illegal run for a third term as Executive President.

    But people are tired of the fake fear psychosis mentality and Goon Gota’s paranoia. They struggle to make ends meet because of the economic mess that the corrupt clowns PBJ and Nivard Cabraal have made. All this will BOOMERANG in the face of Mahinda Rajapaksa soon.

    • 18
      2

      Dude,

      “All this will BOOMERANG in the face of Mahinda Rajapaksa soon”.

      Correction: All this will BOOMERANG on our own collective face soon.

      State belongs to the people. Not to Hamba Clan. Banda Clan or Premedasa Cronies. They will fly away with the loot in the middle of night someday soon.

      We will be left with a bottomless pit of high interest Chinese loans to service. For all eternity. And that’s just tip of the Iceberg.

      Cheers!

      • 8
        2

        Ben

        “We will be left with a bottomless pit of high interest Chinese loans to service”

        What if we don’t pay the loans just like greece did?After all they did not go through the normal procedures of our parliament.our international credit rating also will not be affected because china is not an international lending agency that goes through rigorous lending criteria.If china gives loans to all the tinpot characters in order to peddle their influence, when those characters are no longer there for them to deal with,they can go fly a kite where the repayments are concerned.They know the risk and that is why they have built it into the interest rate.

        You can be sure that china will throw more money if necessary to keep the rajapakshes in power so that they can get a return on their investment in srilanka.

    • 5
      1

      Rajapakshes are born marawarayas later thanks to Bandaranayakes taken to forward in the society. As it is the case baluwaligaya unupuruke dammath ada arinna ba wage – no efforts can help straigneing dogs tail – their inborn over corrupted rascal mindedness can not be changed. But the average of the country are out of all the facts and figures or their mind sets are not that educated enough to get this. iN SIMPLE WORLDS mervin the vermin and MR person is not far from each other. It is tool late now even today people are far from getting it.
      They only maraud the nation without any ethics and morals.

  • 7
    1

    Stitch in time saves nine. Now the hole is too big to stitch- only option is to send it to dumpyard and buy a new clothe if we can afford to buy one or go back to vedas life -shame,shame life- good luck to all of us.

  • 4
    0

    So, when Mihinlanka was briefly grounded, Sajin was replaced by a an eccentric, yet a Professional Airline Executive Anura Bandara, brought in by another Rajapaksa brother to re-establish the carrier.

    As a sign of coming times,a ” Nonis ” was done on Anura Bandara then. When Bandara was driving home in Nugegoda, he was accosted by thugs who assaulted him, stripped him, threw his car keys away and the poor fellow had to walk home only in his underwear.

    There ended Bandara’s professional commitment to Mihin.

    Oh the times, how they foretell what is to come.

    • 4
      0

      Good recall! Unfortunately NO prizes for those who can correctly guess the Monitoring Thug who blessed the undignified end to Anura Bandara.

  • 4
    1

    Well, what can anybody do about it?

    The Rajapaksa brothers and their extensive circle of friends, cronies and other hangers-on have been sucking the national coffers dry for years without any serious challenges from any quarter. The Mihin Lanka story is not new and Rajapaksa knows that no one can do anything about it.

  • 2
    3

    It is written on the wall – Rajapakses WILL NOT let go of any Power, they are consolidating it with every move, on the only grounds of winning the War!!! The
    goon brother is 101% in support of every move, as his life is at stake in the long-term
    for all his “patriotic” activities.

    If there is no PE – there has to be a “palace coup” to keep their seats intact. The
    Opposition – be it JVP TNA JUH or UNP cannot do much, as they are liable to be taken
    into custody very democratically under PTA ! The SB Voter will mind his business I
    guess.

  • 2
    2

    The baggage-boy and the King jointly have done well – even a future COI will not
    touch them. Culled from comments in CT reveals this wealth:-

    1. 7 helicopters and a company called Cosmos Avaiation + Offices – $500,000 x 7 =
    $5,000,000
    2 Owns a luxury 15 roomed luxury mansion at Horton Place Colombo 7 (with large
    swimming pool,jacuzzi and elevator facility – $500,000
    2. 100 roomed Luxury Ameythist Resort in Passikudah – $2,000,000
    4. Owns a 79 room resort in Maldives – $1,000,000
    5. Owns a fleet of Benz,Jaguar,and other luxury vehicles. – $2,000,000
    6. 23 room mansion in Toorak, Melbourne, in the millionaires’ row. – $3,000,000
    7. The block of 16 apartments in Pitt Street, Sydney City Centre. – $2,000,000
    8. Part owner of the racehorse Black Caviar, (Australian Thoroughbred undefeated in 25
    races) with the Emir of Kuwait. – $2,000,000
    9. A vineyard (350 Ha) in Borossa Valley, South Australia – $3,000,000

    Totals only 20 M USD!!

    • 2
      1

      Punchinilame

      Just to add to your excellent comment.

      1. Sajin’s palatial house down Horton place Colombo 7 is located in the private road right opposite the Laksman Kadirgamr Institute of International Relations.It bears assement no.19/2.Just a look at the palatial house reveals it’s luxury.An unauthorized guard house at the top of the lane blocks free movement of cars on that road.The dozen or so of back up vehicles inconvenience the neibourhood but no one dare complain for sheer fear.

      2.Sajin is always provided with an escort by armed Commandos who always follow this rouge in 2 government owned Land Rovers.In addition a black Land Rover with thugs dressed in white short sell even shirt and black pants also follow .So tax payers are paying to protect a thug !!!

      3.Sajin also owns the massive building down down Dudley Senanayake Mawatha ( formerly Castle street) Colombo 8.this building is located in the lane next to the MINI Showrooms, the first private road to the left as one travels from the Horton Place / Kynsey Road traffic light junction.The building is is the second to the right on that private road.It now houses KOICA a Korean company that pays Sajin Rupees three million a month.Formerly this building housed Cosmos Aviation Services which operates Sajin’s fleet of 7 helicopters.What a tragedy , afellow who could not afford to pay1800 bucks on his Volvo car fiancé now travels in one of his own helicopters when he visits his luxury 100 roomed Ameythist Resort in Passikudah.

      Who will inquire and punish this thug who has made millions out of the deal setting up Mihinlanka alone ?

    • 3
      0

      Apparently most of it belongs to MR, and Sajin Vaas is the caretaker cum baggage boy. MR cannot survive with Sajin, whilst Sajin knows every darkest secret of MR. They were both made for each other, and operate as a pair.

    • 1
      0

      punchinilame [Edited out] Antony Peter masses of people are waiting for your legal action against Mahinda and little old me in Haig. [Edited out]

  • 5
    0

    It is disgusting and stinking to note how these people have handled the tax payers money. This man from “no where”, “no qualifications”, “no industry or related experience”, “no aviation background” and “without any shame” being appointed as the “ACCOUNTABLE MANAGER IN CHARGE” is nothing but a “SLAP” in the face of the poor tax payers, I know this man busted nearly Rs. 3.00 Billions in this operation before he was elected to the Parliament. The most alarming thing is during the initial formulation stage of the airline all the “Big Shots” were involved and they too kept quite. Is this the way our President and the related Authorities handle the affairs of Governing the country entrusted to them with utmost confidence by the people. All these men and women have completely disregard and shown no respect for the public to whom they are responsible.

    I think this a very good clue for those aspiring to be our “Masters”. Any political party who ask for a mandate to govern the country must make a pledge to the people that they would bring “Constitutional” provisions to publicly prosecute any and all those involved in mismanagement of public affairs and upon prosecution if found guilty to CONFISCATE all assets belonging to them and any who are connected with wrong doing. If there is NO PLEDGE like that, then DO NOT VOTE. Period.

  • 0
    0

    [Edited out]

  • 2
    0

    Sadly, the days of CBK, there were live VICTOR IWAN to attack her for his own reasons. Very same the like Journalists to stay as if they are fed with Kirimati -clay today is the question I raise again and again.
    Even if Rajapakshes and their goons would have raped lovely ones of the people, only for the very thing that his term eleminated the LTTE terror, they are seen to be worshiped by the poor uneducated lankens. The country s situation today is not even to that of Simbabwe folks that struggle with THEIR leader.

  • 1
    1

    Good piece of detective work. Keep up your good work. What you have uncovered is just a small fraction of plunder. What about the role of Nivad Cabral?

    • 0
      0

      “What about the role of Nivad Cabral?”

      [Edited out]

  • 2
    1

    Just look at the picture accompanying this reveling article.Isn’t it just revolting that makes one vomit ? These are the thugs and swindlers we he have ” democratically ” elected to run our paradise country.What does this say of the intelligence of our idiotic voters?What does the picture reveal of our so called ” 2500 year old civilization”?

    • 1
      0

      Patriot aka Antany Peter aka Punchinlame aka SModaya (plus few more aliases)I have followed this character’s writing for a while. It’s a known fact around New Zealand Tamil community Antony Peter who lives in Wellington is a out favour among his own Tamil community because he is a LTTE sympathizer. His hatred any thing Sinhalese and West for not supporting the LTTE is self evident in his writing. He use the same handles to write to Lanka Truth contents and the words been the same. Regardless who govern Sri Lanka he will not dilute his hatred towards Sinhalese simply because his sympathy for LTTE. In his now defunct Asia Unite Web site he wrote that he has been booted out OF Canada, Germany, Australia and Sri Lanka and not been allowed enter in to India. He once wrote that he had suffered more than Dr M, L. King Junior but conveniently forget to mention that he lives a pretty comfortable life in Wellington New Zealand a western country albeit with out a job. His favourite description of any Sinhalese is Sinhala Modayas.

    • 1
      0

      Patriot aka Antany but all you can do is moan from New Zealand sad life.

  • 1
    0

    For whom the bell tolls….

    BUDAPEST — A move by the United States government to declare six unnamed Hungarian public officials suspected of corruption ineligible for visas has blown up into a diplomatic incident that has transfixed Hungarian political circles and provided fresh evidence of growing tension between the two nations.

    American diplomats, who have been monitoring public corruption in Hungary for more than a decade, detected “a deterioration of the situation, an overall downward trend,” according to M. Andre Goodfriend, chargé d’affaires at the American Embassy here…..

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