No more aircraft for Sri Lankan; reports not submitted: COPE

Aug, 10, 2016 (LBO) – The Committee on Public Enterprises (COPE) of Sri Lanka’s parliament has recommended that SriLankan airlines officials not to go ahead with the purchase of new aircraft while also calling them to submit several other reports on irregularities.

“The transaction of purchasing new aircrafts without conducting a cost basis analysis should not be continued as this transaction by the institution with its net assets at minus value has caused the economy of the country to bear a huge expenditure,” a summarized interim report of the COPE for the first 3 months 2016 presented in Parliament Tuesday, said.

SriLankan Airlines had an accumulated loss of 128 billion rupees as of March 2015, up from 110 billion rupees in 2014. The company also has 143 billion rupees (1.07 billion dollars) in capital commitments for the purchase of four A350-900 aircraft over the next few years.

In total, six A330-300s and four A350-900 aircraft have been contracted for delivery between 2014 and 2021.

Among other recommendations of COPE are that the former board of directors should be summoned before the committee.

“Discussions should be held with Ceylon Petroleum Corporation and necessary steps should be taken to review the arrangements regarding fuel prices and assistance of Ministry of Finance should be sought in this regard,” it said.

“It has been observed that preparing a plan including strategies to overcome the unfavorable financial situation that prevails in the company at present, subsequent to a proper market analysis and financial analysis and restructuring the institution to implement those strategies need to be done speedily.”

Reporting on the current status of investigations the committee said that the relevant reports has not been submitted to the COPE even by 16th of May 2016.

Chairman of COPE, Parliamentarian Sunil Handunnetti said the summarised report contains progress of 19 Public Enterprises and covers the period of January 26 to April 08 this year.

The COPE report of the Central Bank bond investigation will be presented to the Parliament in the coming two weeks, he said.