The country’s national carrier SriLankan Airlines, now in a deep financial crisis, will make its last instalment payment — the penalty for cancelling an order for three Airbus A 350–900 aircraft — this month. There is an irony over this total payment of US$ 146.5 million (more than a staggering Rs 22.4 billion), technically termed [...]


Termination deal: SriLankan pays more than the bond issue loss


The country’s national carrier SriLankan Airlines, now in a deep financial crisis, will make its last instalment payment — the penalty for cancelling an order for three Airbus A 350–900 aircraft — this month.

There is an irony over this total payment of US$ 146.5 million (more than a staggering Rs 22.4 billion), technically termed “termination fee.” The loss to the State is much more than the money known to be reportedly lost to the Central Bank of Sri Lanka (CBSL) due to the bond scam.

ccording to the Auditor General’s report to (the parliamentary Committee on Public Enterprises (COPE), the estimated loss was Rs 889,358,050 and Rs 784,898,755, respectively in the bond issues of February 27, 2015 and March 29, 2016. That totals more than Rs 1.6 billion. However, the Commission of Inquiry now probing the scam, heard the Central Bank’s retired Deputy Governor D.A. Wijewardena testify that according to his calculations, the long-term loss of the impugned Treasury bond auction for a period of thirty years will be Rs. 10 billion.

The termination package, besides the payments, also includes the lease of an A330-200 Airbus aircraft to the recipient. Making it worse is the ironic fact that the Airbus A350-900 aircraft were not ordered by the present management. These were part of a multimillion dollar purchase deal concluded by the previous Mahinda Rajapaksa administration. Who placed the order and who benefited will not be known. The reason – there has been no probe so far.

The settlement is in terms of a “Termination and Amendment Agreement.” For SriLankan Airlines, Chief Executive Officer Suren Ratwatte signed it whilst Sean Sullivan, Chief Executive Officer did so on behalf of the International Lease Finance Corporation (ILFC). The funds, however, were remitted to AerCap Global Aviation Trust’s account in London with the Citibank.

Upon the signing of the agreement, an immediate payment of US$ 10.5 million was made. Thereafter, from January to June (six) instalments of US$ 13.3 million were paid. In addition to the “Termination Fee,” the agreement has also allowed Aercap to retain a security deposit of US$ 56 million.

This agreement had also made provision to exclude Value Added Tax (VAT) and other taxes from the “termination fee.”
As part of the deal, SriLankan Airlines has also offered on lease to Aercap an Airbus A330-200 aircraft used by Mihin Lanka under the “Termination and Amendment Agreement.” This is an aircraft the national carrier had leased in November 2011 from Whitney Leasing Limited. The new lease is to be extended until December 7, 2028 or the date when the “Design Service Goal Limit for the aircraft is reached.”
The “Termination and Amendment” agreement was approved by the Cabinet Committee on Economic Management (CCEM).

Who gave those bananas? Cabinet directs probe by CID
Lands Minister Gayantha Karunatilleke complained at last Wednesday’s weekly Cabinet meeting that the Criminal Investigation Department (CID) had declined to investigate a complaint of attempts to slander him.

It was reportedly on the grounds that the CID did not have adequate resources and was already burdened with a number of investigations.
The complaint itself referred to alleged attempts by opposition supporters who had carried out a campaign over his distributing bananas to flood victims. To create mischief, he said, bananas were packed in polythene packs bearing his name.

Minister Karunatilleke had the backing of his colleagues that the matter should be investigated. So much so, President Maithripala Sirisena directed Law and Order Minister Sagala Ratnayake, who was present at the meeting, to ensure the CID conducted an investigation into the matter.

One of three official spokespersons now, Minister Karunatilleke could not help but speak about his issue at the news briefing on Wednesday. He told the media briefing, which follows weekly ministerial meetings, that he was aware of the culprit behind the campaign against him.

Trilingual sign- boards soon
Sign boards at Government institutions and public places will be in three languages, Sinhala, Tamil and English, the Cabinet of Ministers has decided.  The move follows a recommendation by National Co-existence, Dialogue and Official Languages Minister Mano Ganeshan.


MI detectives to probe attacks on Muslims
The role of Military Intelligence (MI) operatives under the previous administration was a hotly contested subject during the presidential and parliamentary elections in 2015. So much so, some of them were hauled up in courts over alleged attacks on different persons including journalists.

Last Wednesday, however, President Maithripala Sirisena declared that he would order the deployment of Military Intelligence personnel to identify those responsible for the alleged attacks on mosques and business establishments owned by Muslims. He made the announcement at a meeting of the Government Parliamentary Group, both the SLFP and the UNP, at the Parliamentary complex. His announcement was greeted with continuous applause by the MPs.

Colombo District UNP parliamentarian Mujibur Rahman raised issue at the meeting which was summoned for MPs to be briefed on rehabilitation work in areas affected by the recent floods and landslides.

President Sirisena noted that he had issued many a directive to the Police but they had failed so far to identify the suspects or arrest them.
A witty UNP MP who was at the meeting remarked, “President Sirisena’s declaration was not only an indictment on the Police but also an acknowledgement that MI operatives, controversies notwithstanding, were still capable at ferreting out intelligence.”

CCEM restructured
An Economic Unit comprising middle level officers from the Treasury and the Central Bank is to be set up to serve the Cabinet Committee on Economic Management (CCEM) chaired by Prime Minister Ranil Wickremesinghe.Comprising five officials, this Committee is to provide “technical inputs.” Charitha Ratwatte, Senior Advisor to the Prime Minister, has been tasked to monitor decisions of the CCEM and report back every month.

The CCEM has also been restructured. One meeting will focus exclusively on policy matters, a second will approve projects, a third will handle fiscal matters and the fourth will be devoted to the private sector. All project proposals, it has been agreed, should first be scrutinised by the official committee of the CCEM.


Extradition agreement with Russia
A Gazette notification has given legal effect to an Extradition Agreement between Sri Lanka and the Russian Federation.
Wednesday’s notification says the aim is to “establish a bilateral legal mechanism governing the transfer of persons subject to prosecution and sentenced persons and to improve the efficiency of justice…”

A similar agreement was signed between Sri Lanka and Ukraine and given legal effect a month ago.

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