SriLankan Airlines (SLA) has been directed to take legal action against the Presidential Secretariat and the Ministry of Foreign Affairs for the failure to pay the airline a sum of Rs 123 million for certain irregular transactions which took place during the Mahinda Rajapaksa regime.
The Committee on Public Enterprise (COPE) made this recommendation when SriLankan airlines and relevant officials of state institutions were summoned before the COPE yesterday.
COPE Chairman JVP MP Sunil Handunnetti said top officials and leading politicians have used the airline service without purchasing air tickets.
According to COPE Chairman, the Presidential Secretariat owes SriLankan a sum of Rs. 114 million and the Foreign Affairs Ministry owes a sum of Rs. 9 million.
The Government is currently in the process of restructuring the SLA, and an Expert Committee was appointed by the President to provide a report of policy recommendations.
Accordingly, the Committee has recommended restructuring the SLA through financial, corporate, and human resource restructuring and developing an effective strategic plan.
Treasury Secretary Dr. R.H.S Samaratunga noted that Finance Ministry cannot infuse money to bail out SriLankan airlines.
The total loss of SLA has increased to Rs.12,961 million in the first four months of 2019, while the total debt of SLA has exceeded USD 750 million.
Further, the Government is currently bearing USD 375 million and Rs. 26,250 million of contingent liabilities that have piled up since 2014.
This includes the guarantee granted for International Bonds and letters of comfort issued to obtain loans during the BIA closure in 2016.
Therefore, it is observed that the GOSL needs to have a significant business restructuring model, owing to the high possibility for the Government to bear the loss, and also due to the high correlation between Aviation industry and the tourism sector in the country
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