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SriLankan Airlines ready to sell stake in its ownership

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by Sanath Nanayakkare

SriLankan Airlines (SLA) would soon announce the sale of an ownership stake subject to Cabinet approval in order to reduce its huge financial stress, Aviation Minister Nimal Siripala de Silva said, in Colombo, yesterday.

The Minister said negotiations with potential investors would be conducted to safeguard the rights of current employees of the airline.

“Today, there is a lot of discussion in the country about the loss-making national carrier and the reforms it should undergo. SLA’s debt payable to an international sovereign bond (ISB) on a government guarantee is USD 175 million. A loan, taken from Bank of Ceylon, mortgaging shares of SriLankan Catering, is USD 80 million. Debt payable to BOC and People’s Bank is USD 386 million. Arrears amount due to CPC, Aviation Services, etc., are USD 325 million. Arrears due for leases amounts to USD 80 million and SLA’s total debt is USD 1,126 million – more than one billion USD.

“SLA doesn’t have the financial capacity to repay these debts as the Airline was severely affected in the past few years and also because of the economic crisis the government itself is embroiled in. The government can’t help out SLA anymore. So, restructuring of SriLankan Airlines, and obtaining capital investments, is critically vital and if such capital infusion does not happen, SLA will certainly collapse and the company will have to be closed down which will end up creating a social distress as 6,370 local and foreign employees are working for the national carrier.

“They are employed in areas of administration, cabin crew, aircraft maintenance, engineers, etc. They could lose employment in such an event. So, it is the responsibility of the government to safeguard the employees, without creating the environment for retrenchment, and also keep the national carrier flying.

“SriLankan was making profits when it was operating as a joint venture with Emirates in 1998, and it was not a burden to the government back then. In the new collaboration we envisage, we will make strategic decisions. The profit-making Ground Handling Division, which is currently undertaken by SLA, is to be continued and administered as a separate unit. Our landing rights, in 26 destinations, which is an invisible asset, will also be retained. We will keep 49% stake of the profit-making Catering Division and offer potential investors the balance shares with a negotiable share of its management.”

“If the restructuring could be completed successfully, foreign debt of USD 175 million, and the bank overdraft obtained from BOC of USD 80 million, could be repaid, as priority payments.

Further, USD 80 million arrears, due for aircraft leases, could be paid and then there won’t be any foreign debt to be paid.”

“It is also significant to note that if USD 466 million, owed to BOC and People’s Bank, could be paid, the said banks will be strong institutions to support the national economy. And when USD 322 million, the arrears payments to CPC is settled, CPC will also be a financially viable institution.

“Therefore, we believe that SriLankan Airlines, its debtors and its employees could only be protected through this restructuring process.”



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Fuel price hikes trigger transport disruptions and calls for fare increases

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The latest fuel price increases have sparked widespread concern among transport operators and raised questions about the government’s supportive measures. Cabinet Spokesman and Minister Dr Nalinda Jayathissa told a media briefing yesterday that the government was incurring a monthly loss of Rs. 20 billion by maintaining subsidies on fuel. According to the Minister, the state loses Rs. 100 per litre of diesel and Rs. 20 per litre of petrol under the current pricing system, a burden that the Treasury continues to absorb as part of a “supportive mechanism.”

The Ceylon Petroleum Corporation (CPC) revised fuel prices from midnight on March 21, raising the price of a litre of Lanka Auto Diesel by Rs. 79 to Rs. 382, Super Diesel by Rs. 90 to Rs. 443, Octane 95 petrol by Rs. 90 to Rs. 455, and Octane 92 petrol by Rs. 81 to Rs. 398. Lanka Kerosene was increased by Rs. 60,bringing the price to Rs. 255 per litre. Other suppliers, including Sinopec and Lanka IOC, also implemented similar hikes, with Sinopec’s Super Diesel rising sharply by Rs. 219 to Rs. 572 per litre.

The surge in fuel prices has had an immediate impact on public transport. The Chairman of the Lanka Private Bus Owners’ Association, Gamunu Wijerathne, told The Island that 90% of private buses were off the road yesterday (22). He called for a 15% increase in bus fares, raising the minimum fare from Rs. 27 to Rs. 35, warning that services could be suspended if fare adjustments are not approved.

Three-wheeler operators have also pressed for immediate fare revisions. L. Rohana Perera, General Secretary of the National Joint Three-Wheeler and Industrialists’ Association, said the rising fuel costs have made it difficult for drivers to continue operating. The Association has proposed a Rs. 20 increase for the first kilometre fare for all meter-operated three-wheelers and plans to present its concerns to the Presidential Secretariat.

Fuel price monitoring has also intensified amid concerns over potential smuggling. A senior police officer told The Island that intelligence units have been deployed near fuel stations to prevent hoarding. The police suspect that certain fuel station employees and owners could be facilitating stockpiling.

Political leaders have warned that the hikes will ripple across the economy. SJB MP S.M. Marikkar said transport cost increases will drive up the prices of essential goods such as rice and fish, leaving consumers struggling under rising costs.

Import and export container transportation charges will be increased by 20% from midnight yesterday (22) due to the recent fuel price hike, according to the Container Transport Vehicle Owners’ Association.

The latest increases follow two rounds of price hikes since March 9, driven by surging global oil prices amid the Middle East conflict. Since then, Lanka Petrol 92 Octane has risen by Rs. 105 to Rs. 398, Petrol 95 Octane by Rs. 115 to Rs. 455, Auto Diesel by Rs. 101 to Rs. 382, and Super Diesel by Rs. 114 to Rs. 443 representing an overall increase of around 35% across key fuel categories.

by Norman Palihawadane and Pradeep Prasanna Samarakoon

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Prof. Peiris honoured by International Institute of Rehabilitation

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Felicitating Prof. Peiris at the event were Senior Lecturer Ravindra Samarawickrama, Chairman of the International Organisation for Crime Prevention and Rehabilitation, Director Nilantha Kotikawatte, and Senior Lecturer Udaya Kumara Amarasingha, Head of the Department of Criminology and Criminal Justice at the University of Sri Jayewardenepura

At the award presentation ceremony of the International Rehabilitation Institute last week, Professor G.L. Peiris, as Chief Guest, in his keynote address, dealt with the special relevance of rehabilitation at this time. The traditional criminal law makes provision for punishment after a crime has been committed, and punishment usually takes the form of a prison sentence. It is even more important, however, to explore practical means of prevention and also to have recourse to a custodial sentence as a last resort rather than as the typical response.

The modern approach is that punishment is seen not as retributive but as a means of rehabilitating the offender in society. Prison sentences, bringing a first offender into the prison environment and association with habitual offenders, carries the risk of recidivism, the available statistics indicating the likelihood of return to prison on repeated occasions.

He placed emphasis on the importance of informed social attitudes to ensure that an offender does not carry a permanent stigma, reducing his opportunities for employment and acceptance in society. The importance of religious instruction in early childhood, and the close connection between temple and village, was stressed.

Professor Peiris was honoured with an award of appreciation by academic colleagues.

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CMC resumes parking fees

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The Colombo Municipal Council (CMC) has resumed parking fees in the city with effect from today (23).

Parking management and fee collection will recommence from 6 am, following a decision by the Finance Standing Committee of the Council.

Charges were temporarily suspended from March 18 due to heavy traffic and long queues near fuel stations. Authorities said the situation had improved with the introduction of the QR code system and odd-even rationing.

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