Kabir defends Govt. decisions on Hyatt and Sri Lankan

Thursday, 30 November 2017 01:22 - - {{hitsCtrl.values.hits}}

By Skandha Gunasekara

Responding to allegations made by the Opposition against his ministry, State Enterprise Development Minister Kabir Hashim said the deal for the fleet of A350-900 aircraft was cancelled as the losses incurred in the deal would have been too high to mitigate.

Taking part in yesterday’s committee stage debate on the expenditure heads of the Ministry of Enterprise Development, Minister Hashim said that losses for a single aircraft amounted to $ 2.2 million.

“According to the agreement, a single aircraft was to be leased at $ 1.3 million, $ 900,000 more than the market value,” he said.

Minister Hashim noted that a lack of an exit clause in the deal had resulted in the Government having to pay an exorbitant fine.

“The type of aircrafts ordered was unsuitable for SriLankan Airlines. The aircrafts that were ordered had been capable of flying 15 hours. However, such aircraft are not needed as it takes only 10 hours to get to destinations such as London.”

The Minister said the agreement had been signed by several higher-ups from the former regime who had signed the deal without informing SriLankan Airlines’ Board of Directors.

Remarking on the issue related to the Italian contract for Hotel Hyatt being cancelled, the Minister said the contract in concern for the interior design and wiring was too high and that a new contract signed afterwards with a different company had offered cheaper rates.

“This agreement was signed by the former Government one day before the 2015 Presidential Election, on 7 January 2015. Why was it signed in such a hasty manner? The contract was because the costs were too high. This initial contract was for $ 26 million while the new contract entered into by our Government was for $ 19 million, $ 7 million less,” the Minister revealed.