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Turbulence ahead: Airline on the block in Sri Lanka reforms

Published

3 years ago

2022/11/13

By Amal Jayasinghe

Dozens of state-owned Sri Lankan companies employing tens of thousands of people could be restructured or closed as part of an IMF bailout of the bankrupt country, with the country’s airline top of the list for reform.With nearly 6,000 staff, SriLankan Airlines is the biggest and most expensive of the cash-haemorrhaging, sclerotic companies that have drained the budget and compounded the worst financial crisis in national history.

According to treasury figures, the carrier was losing $4.50 for every dollar it earned at the start of this year. It has not turned a profit since 2008, when its chief executive was sacked for offending the country’s then-leader.

“Even those who have never stepped into a Sri Lankan aircraft are paying to subsidise the airline,” government spokesman Manusha Nanayakkara told reporters this month.

“We can’t continue like this.”

Sri Lanka defaulted on its $51 billion foreign debt in April and is now neck-deep in the arduous process of renegotiating its obligations with creditors.Its 22 million people suffered through months of food and fuel shortages, and at the peak of the crisis, a furious mob stormed government buildings and chased Sri Lanka’s former president into exile.

The International Monetary Fund (IMF) has given preliminary approval to a $2.9 billion bailout, and the government hopes to be able to access the first tranche by the end of the year.Terms of the deal have yet to be released, but IMF cash is usually conditional on painful reforms, such as tax hikes, removing consumer subsidies, and privatising or closing underperforming state firms.

The country has more than 300 state enterprises, ranging from nut farms to fuel retailers, and the top 52 firms lost nearly $2.4 billion between January and April — around $140 million a week.

SriLankan Airline’s future is the most urgent priority, and the government last month instructed the finance ministry to begin its restructuring, ideally by attracting outside investment.

But finding a company willing to pour money into the airline will be immensely challenging, analysts say, given its history of interference, mismanagement and turbulent partnerships.In 1998, Emirates bought a minority stake in the carrier and took over its management.

It stayed in the black for most of the next decade, although one of its most profitable years was — ironically — 2001, when the Tamil Tigers separatist movement attacked the country’s main international airport. Several of the airline’s planes were destroyed in the July attack, but insurance payouts and the removal of excess capacity offset a downturn in ticket sales.

But the partnership was terminated and the chief executive sacked by then-president Mahinda Rajapaksa in 2008 after the carrier refused to bump fare-paying passengers to make room for members of his family returning from a jaunt in London. The leader packed SriLankan’s management with relatives and loyalists, several of whom now face corruption charges, and the airline has bled cash since.Rajapaksa even started a rival state-owned airline named after himself, a colossal failure that was eventually merged into SriLankan — along with its accumulated losses.

Authorities tried to sell a 49 percent stake in SriLankan back in 2017 when the island nation’s tourism market was booming, but even then private equity firm TPG eventually withdrew its bid after deciding it was not a viable operation.Airlines are “generally not that attractive” to investors, Singapore-based aviation analyst Brendan Sobie told AFP, “particularly airlines that are government owned and have a lot of legacy issues, have a lot of debt, like SriLankan does”.

“There’s not many foreign airlines, particularly in this post-Covid environment, that are even looking or considering buying stakes in airlines overseas,” he added, and the track record for strategic investments in the sector was “very bad”.

“It’s very difficult,” he said.SriLankan chairman Ashok Pathirage acknowledges the airline’s current balance sheet is not an attractive proposition.

“If you try to privatise the whole thing, people will come and ask the government to take half of the debt,” Pathirage told AFP.

But he said SriLankan could settle about half of its liabilities by splitting off and selling profitable business arms, including its virtual monopoly on catering and ground handling at Colombo airport.Trade union leaders and employees support a restructuring along those lines, on the condition that no jobs are cut.

“The airline is losing money not because of the staff, but expensive leases and poor financial structures,” a cabin crew member, who requested anonymity, told AFP.But selling off the airline’s profitable divisions would leave the rump operations generating even bigger losses for the government.

Former state finance minister Eran Wickramaratne told AFP that if authorities could not find an investor, the airline should be grounded permanently before it could burden the public further.

“We are a bankrupt country,” he said. “We have not been able to service our debt and that reality has struck home.”

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CIABOC probe: CC under pressure to ask Speaker to step down as Chairman

Published

9 hours ago

2026/02/9

Thilina Walpola

Dayasiri questions legitimacy of appointments made by Council

The Constitutional Council (CC) should ask its head, Speaker Dr. Jagath Wickramaratne, to step down temporarily pending an investigation by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) into a complaint lodged by sacked Deputy Secretary General of Parliament Chaminda Kularatne, SJB MP Dayasiri Jayasekera has said.

Former Minister Jayasekera said so in response to The Island queries pertaining to Kularatne’s recent complaint to the CIABOC.

Jayasekera pointed out that the CC, which is responsible for key appointments, couldn’t afford to have a person under CIABOC investigation as its head. “We have never experienced a similar situation since the establishment of the CC in 2000,” the Kurunegala District lawmaker said.

Parliament introduced CC under the 17th Amendment to the Constitution. It was abolished in 2010, reinstated in 2015 through the 19th Amendment, then replaced by a Parliamentary Council in 2020, and reintroduced via the 21st Amendment in October 2022.

MP Jayasekera said that the NPP government had turned a blind eye to his recent request made in Parliament for the Speaker to step down. He said that subsequently he had discussed the issue with other MPs and they were of the view that Dr. Wickramaratne’s continuation as the Chairman of the CC undermined the integrity of the council.

A parliamentary committee headed by Dr. Wickramaratne sacked Kularatne on January 23 over alleged irregularities pertaining to his appointment as Deputy Secretary General of Parliament and Chief of Staff. Kularatne lodged the complaint with the CIABOC on 2 February.

Austin Fernando, Professor Wasantha Seneviratne and Ranjith Ariyaratne were appointed as non-Members of Parliament to the CC on 23 January, the day Parliament sacked Kularatne.

MP Jayasekera said that the CC should discuss the issue with the Speaker. Political parties represented in parliament should intervene to ensure that the controversy over the Speaker’s conduct didn’t undermine the apex body.

The CC consists of Prime Minister Dr. Harini Amarasuriya (Ex-officio), Speaker Dr. Jagath Wickramaratne (Ex-officio), Leader of the Opposition Sajith Premadasa (Ex-officio), one MP appointed by the President (Bimal Rathnayake), five persons appointed by the President, upon being nominated as follows: one MP nominated by agreement of the majority of the Members of Parliament representing the Government (Aboobucker Athambawa, M.P), one MP nominated by agreement of the majority of the MPs of the political party or independent group to which the Leader of the Opposition belongs—Ajith P. Perera—and three persons nominated by the Speaker by agreement of the Prime Minister and the Leader of the Opposition—Austin Fernando, Professor Wasantha Seneviratne and Ranjith Ariyaratne—and one MP nominated by agreement of the MPs other than those representing the Government and those belonging to the political party or independent group to which the Leader of the Opposition belongs, and appointed by the President (Sivagnanam Shritharan, M.P).

The CC recommend nominations to the President for the appointment of Chairpersons and Members of Election Commission, Public Service Commission, National Police Commission, Audit Service Commission, Human Rights Commission of Sri Lanka, Commission to Investigate Allegations of Bribery or Corruption, Finance Commission, Delimitation Commission and National Procurement Commission.

Jayasekera asked how Dr. Wickramaratne could continue as CC head as appointments to CIABOC, too, are made by the 10-member body.

The CC also approve/disapprove recommendations by the President for the appointment Chief Justice and the Judges of the Supreme Court, President and the Judges of the Court of Appeal, Members of the Judicial Service Commission, other than the Chairman, Attorney-General, Governor of the Central Bank of Sri Lanka, Auditor-General, Inspector-General of Police, Parliamentary Commissioner for Administration (Ombudsman) and Secretary General of Parliament.

MP Jayasekera said that it would be really interesting to see the response of the newly appointed civil society members to the developing situation. The SJBer pointed out that the recent appointment of Samudika Jayaratne, a Senior Deputy Auditor General as the Auditor General was made after Kularatne moved the CIABOC against the Speaker.

The JVP and NPP, having preached other political parties of transparency, couldn’t pretend the Speaker’s issue was not serious. Dr. Wickramaratne was appointed Speaker in Dec 2024 after Asoka Ranwala had to step down after being exposed for making false higher education qualifications.

by Shamindra Ferdinando

News

Auditor General urged to probe coal scam

Published

9 hours ago

2026/02/9

Thilina Walpola

The Electricity Consumers’ Association (ECA) Friday (6) called on newly appointed Auditor General Samudika Jayarathne to begin her tenure by launching an investigation into the controversial coal procurement deal, which has drawn widespread public criticism.

Addressing a media briefing in Marandagahamula, Gampaha, ECA Secretary, Sanjeewa Dhammika, said the probe should be conducted independently. The appointment of a new Auditor General, following a vacancy of nearly six to seven months, was a crucial step in restoring the effectiveness of the state audit system, he said, extending congratulations to Jayarathne.

Dhammika urged the Auditor General to carry out a swift, independent investigation into the questionable coal procurement deals, alleging that they had caused significant economic and environmental harm to the country.

He called for the findings of such an investigation to be disclosed to the public as a priority.

He also called for an immediate audit of Lanka Transformer Ltd, which has faced severe criticism from the Committee on Public Enterprises (COPE). Dhammika said the audit should reveal details of alleged irregularities, identify those responsible, and disclose any misuse of public funds.

Noting that the government held a substantial share in Lanka Transformer Ltd, he stressed that the matter constituted a direct responsibility of the State.

“The audit system should not function to provide political protection, but to safeguard public funds,” Dhammika said, adding that the Association expected the new Auditor General to uphold this principle.

By Anuradha Hiripitiyage

News

First-ever monkey holding centre to be set up in Matale

Published

9 hours ago

2026/02/9

Thilina Walpola

A 150-hectare site near the Kalu Ganga Reservoir in Matale District has been earmarked for Sri Lanka’s first-ever holding centre for Toque Macaques, the Department of Wildlife Conservation (DWC) announced.

The centre will feature water, food, and security facilities, providing a safe environment to manage macaques that cause damage in nearby communities. The Matale District Development Committee has approved the project, following a recommendation from the DWC.

Wildlife Range Officer Chamath Lakshman Perera told the Committee that similar holding centres operate in several countries, including Malaysia. A total of Rs. 283.87 million has been allocated for the project.

Under the plan, macaques causing destruction will be captured and relocated to the centre. Population control measures will include fitting loops on female monkeys to prevent breeding. The facility will be secured to ensure the animals cannot escape back into the wild.

Officials said the site has sufficient natural food sources, but additional supplies will be provided if necessary. Each macaque is expected to require around 70 grams of food per day.

The project aims to balance wildlife conservation with community protection, offering a model for managing human-macaque conflicts in the country, Perera said.

by Nimal Gunathilake