The Presidential Commission Probing the malpractices in SriLankan Airlines yesterday inquired the issues relating to a company selected to handle web services of the Airline.
It was revealed that two companies had been paid money for six months in 2012 for similar services as the company had entered into a similar agreement with the second company while the agreement with the first company was in force.
Sri Lankan Airlines former Head of e-Commerce, Ajith Weerasekara testified before the commission yesterday. Sri Lankan Airlines outsourcing the Web Development and Maintenance Activities of its websites had entered into an agreement with a company named E-Futures Pvt. Ltd. in June 2010. The agreement was signed for a period of three years till June 2013. Although, these activities were handled by a third party, the e-commerce activities including web marketing and managing were handled in-house during this period. However, the senior management of in November 2011, decided to terminate the agreement with the E-Futures by July 2012, as they had planned to enter into an agreement with another Company named H-Group.
Accordingly, the airlines in January 2012 issued notice to the E- Futures, which is six months prior to the termination of the agreement. However they had made relevant payments to E-Futures during this period.
While the agreement with the E-Futures was in place and there were six months for the agreement with them to be terminated, the SriLankan entered into another agreement with the H-Group Pvt. Ltd. in January 2012 for the same services and also for the handling of e-commerce activities including the Internet Booking Engine (IBE) system. It was revealed that this agreement had been signed without following the due procurement process. The witness told the commission that there was not even a review form for this contract.
Weerasekera said that he didn’t know the reasons for this agreement to be signed in a hurry with H-Group, but, a Board Paper in 2011 November indicated that the Board of Directors of Sri Lankan Airlines had made an observation that the web revenue contribution from IBE should have been increased. It had been their expectation to increase the share of the IBE from the Total Passenger Revenue to go over 10 per cent. The SLA- H Group agreement came to an end in June 2015 and the share of the IBE had not achieved the expected the target except several months from 2012 to 2016.
It was also revealed that, although web developing and maintenance are carried out by a third party, it is very unusual that an airline is outsourcing its web services as many confidential details of passengers are also stored there. According to the witness, web services could have been maintained in-house without outsourcing if there is an additional staff with proper training. He said Sri Lankan Airlines could do that after taking back the handling of web services from the H-Group.