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Report to PM this week

Internal restructuring of SriLankan:

The Public Enterprise Development Ministry is expected to submit a report on the internal restructuring of SriLankan Airlines to Prime Minister Ranil Wickremesinghe by the end of this week.

Minister of Public Enterprise Development, Kabir Hashim speaking to Daily News said they would submit the report on September 1 or 2. As the Airline continues to face stormy weather, many of the potential investors seeking to partner with the government on a public-private partnership have abandoned ship in the last two years.

The Minister however believed that the internal restructuring would help reduce the current losses and keep the National Carrier going until they find a suitable partner in the next one or two years.

“But we will work on the assumption that the restructuring has to take place and needs to be done by ourselves because we cannot let it bleed more and more,” Hashim said.

“Right now the Ministry has got a team together and got the SriLankan management team to work together with the ministry and we are coming up with a restructuring plan,” he added.

In June of this year, the Sri Lankan’s Directors and Chief Executive were summoned before Cabinet to answer for the lack of success in the Airline and grilled for not implementing the Weliamuna report which found incriminating evidence of corruption and malpractice by the previous regime.

President Maithripala Sirisena at the time had promised to take decisive action on the SriLankan’s Board. Whilst many had asked that the President sack the whole Board, the Prime Minister had promised that the management team would be restructured within weeks.

As recommendations on the internal restructuring are to be made soon, Minister Hashim noted that if the need arose, the hard decisions have to be taken.

“When TPG (US private equity firm) did a full due diligence and they were well aware of the fact that the debt factor would be taken out, conditionally of course, but they also cited many other reasons. Also at present it is not an easy time for the airline industry globally. Then we have the lease agreements signed by the previous government and they have signed the most disadvantageous; some of them can’t be cancelled. So when they see that they run a mile. MR is responsible for Sri Lankan’s problems.

“And then they went and employed 4,000 odd people from 2008-2014,and that is a colossal number of people to take on. So anybody who wants to take it up looks at it as a political issue,”he explained.

However,as a potential restructuring of management spells success or failure for the Airline, the Minister believed that, “If we turn around the balance sheet and PNL and do some reallocation of staff to different units and present a better picture, we can make it a success.”