PM desperate to defuse SriLankan landmine
by Zacki Jabbar-April 26, 2016,
Most of Mihin Lanka’s losses had been hidden in the Sri Lankan Airlines balance sheet thereby inflating its debt burden to USD 3.2 billion, Prime Minister Ranil Wickremesinghe said in Colombo yesterday.
He told a news conference at Temple Trees that in an effort to continue former President Mahinda Rajapaksa’s pet project Mihin Lanka, much of its losses had been transferred to SriLankan which was already mired in debt.
The end result had been that the national airline saddled with mounting losses now totaling USD 3.2 billion, was on the verge of closure, the Prime Minister added.
Describing SriLankan as a ‘landmine’, he said that the choice was to shut it down or run it as a joint venture with a foreign airline or an investor. "The Cabinet of Ministers has decided on the latter. But, we have to first reduce SriLankan’s debt burden, otherwise it won’t be possible to find a partner. So, the government would be taking over part of the USD 3.2 billion loss."
PM Wickremesinghe revealed that the restructuring programme would include cancellation of the four A330-300 Airbuses equipped with luxury quick change VIP kits which the Rajapaksas had ordered, despite the national airline not being able to afford such extravagances.
Special Projects Minister Sarath Amunugama said that the Opposition had created a wrong impression of the proposed increase in Value Added Tax (VAT).
Taxes would not be imposed on essential commodities.Free health and education would also be continued. The increase in VAT would apply to private hospitals and international schools, he noted.
