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Friday March 31st, 2023

Missing documents, compliance delays mar SriLankan Airlines security tender

ECONOMYNEXT- The Presidential Commission of Inquiry into irregularities at the state-owned SriLankan Airlines this week questioned the senior security official at the airline over years of delay in complying with European standards and missing documents which led to refloating a tender for security scanners.

Senior Security Manager Titus Kannangara, currently acting as Head of Security, testified that SriLankan had pledged to comply with the European Union’s (EU) ACC3 regulations on security in 2012, as noncompliance would increase the time and cost of exports for Sri Lankan manufacturers.

Compliance with ACC3 regulations was the choice of a country, and not mandatory according to international or national regulations, he said.

However, he said that since the EU did not distribute the regulations to compliant members, the SriLankan country representative in the UK was responsible for collecting the regulatory documents and sending them to the head office in Sri Lanka.

“The London Station Manager had to go and get them. We got the hard copies on our flights in January 2014,” Kannangara said, as commission members questioned the two-year delay in complying with ACC3.

By then, SriLankan’s security department was in the middle of a tender for two x-ray baggage scanners, and one heavy cargo x-ray scanner.

The airline had selected Nimrod Systems (Pvt) Ltd to supply the Rapiscan brand of scanners, since Nimrod had scored the highest in technical evaluation.

Kannangara confirmed that the technical evaluation committee had selected Nimrod due to SriLankan and its predecessor Air Lanka having 25 years of experience with Rapiscan, Nimrod’s good after sales service, and compatibility with ACC3 regulations.

However, Kannangara said that he was instructed by then Group Head of Security P. Chandrawansa to form a committee to cancel the tender.

He said that the order was verbal, with no meeting minutes or documents existing as evidence.

Kannangara and two other security managers had decided to cancel the tender based on their understanding that SriLankan had only in early 2014 received the ACC3 regulation books, and the equipment selected through tender which was floated in December 2013 would have been in violation of ACC3 standards.

The disappearance of Malaysian Airlines MH-370 had increased concerns over global terrorism at that time, weighing in on the decision, he said.

Further, the shooting of a police constable in Jaffna during the period had also worried the committee over a resurgence of the LTTE, he said.

When the commission questioned Kannangara on how the tender was cancelled on the basis of not adhering to ACC3 standards, when the technical evaluation committee had chosen the Rapiscan machines specifically due to this requirement, he said that he was at the time not privy to the reasons for the machines being selected.

However, he confirmed that Kosala Kariyawasam, a Security Manager, had sat on both the technical evaluation committee, as well as the tender cancellation committee.

Further the Ministry of Defence had not briefed the airline on increasing security threats as per normal procedures, and the security department had made the call on its own, Kannangara said.

He said that Chandrawansa had forwarded the recommendation to cancel the tender to the senior tender board, and it was approved by the board via e-mail,. He confirmed that there is no meeting minute of the senior tender board agreeing to cancel the tender.

The security department had then refloated the tender for the three x-ray scanners, as well as for two explosive trace detectors (ETDs). Kannangara said that the ETDs were procured to comply with ACC3 standards for heavy cargo.

The technical evaluation committee had selected Exel Trading International (Pvt) Ltd to supply the equipment, which had in the first tender been the third in the running based on technical evaluations. 

Nimrod and two other companies too had been found to have technically feasible equipment for the second tender.

However, documentary evidence showed that members of the technical evaluation committee and the financial evaluation committee had taken a trip to Thailand to evaluate the machines offered by Exel, before the tenders had been sent for financial evaluation.

Kannangara insisted that the visit was made after financial evaluation. He said that the inconsistency in documentary evidence was due to ‘human error’.

Exel had initially quoted a price of 117 million rupees for the five scanners. Kannangara said that following negotiations, Exel had agreed to supply the equipment for 84 million rupees, compared to Nimrod’s 102 million rupees. He was not able to provide original prices for the other bidders, but said that Exel had the lowest prices, and therefore it was selected.

The ETDs purchased were in a list of equipment which had failed field trials, which usually results in their prices being reduced. The ACC3 certification agencies recommend countries not to purchase such equipment. The commission questioned Kannangara why the tender awarded for such equipment when the security department was seriously concerned over the threat of terrorism at that time.

Kannangara said that no brand of ETDs had been qualified as having passed the field trials at that time.

However, replying to questions of Deputy Solicitor General Shanaka Wijesinghe, Kannangara confirmed that the airline could have chosen other types of equipment to remain ACC3 compliant. (COLOMBO, 01 August, 2018)



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Sri Lanka rupee closes at 328/329 against the US dollar, bond yields down

ECONOMYNEXT – Sri Lanka’s treasury bond yields were down and the rupee closed at 328/329 against the US dollar in the spot market on Friday, dealers said.

A 01.07.2025 bond closed at 29.80/30.20 percent on Friday, down from 31.25/30 percent on Thursday.

A 15.09.2027 bond closed at 27.45/55 percent, steady from 28.80/85 percent on Thursday.

Sri Lanka rupee closed at 328/329 rupees against the US dollar, from 327/330 rupees from a day earlier. (Colombo/ March31/2023)

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Sri Lanka tax hike: no response from president, professionals to discuss next steps

GMOA Secretary Haritha Alutghe

ECONOMYNEXT – Sri Lanka’s trade unions and professional associations who have been agitating against an International Monetary Fund (IMF) backed progressive tax hike will meet to discuss further union action after a letter to the president went unanswered.

Government Medical Officers’ Association (GMOA) secretary Dr Haritha Aluthge told reporters on Friday March 31 that the unions will meet as the self-styled Professionals’ Trade Union Alliance (PTUA) collective which have so far been organising strikes and demonstrations demanding a revision of the taxes.

The PTUA has been awaiting a promised meeting with President Ranil Wickremesinghe for some days now. Aluthge previously said on Monday that if the meeting did not materialise, the unions would be compelled to go on strike.

The issue has become stagnant due to government inaction, said Aluthge at Friday’s press conference.

“The PTUA informed the president in writing yesterday for the last time to please understand the gravity of this situation and to immediately give us a meeting and present the government’s interim solution, through which the government can take measures to ease the sense of tension among professionals,” he said.

The purpose of the meeting is to discuss an “interim solution” to the professionals’ grievances over the progressive income tax hike until a reported revision that’s due in six months when the country’s recently approved 17th IMF programme comes up for review.

“Sadly, there has still been no response,” the GMOA official said.

All unions and professional associations will meet Friday evening together with a number of other unions to discuss further action, he added.

The privately-owned English-language weekly newspaper The Sunday Times reported on March 26 that the IMF had indicated the possibility of revising some of the taxes imposed as part of the IMF’s staff-level agreement with Sri Lanka when the programme comes up for review in six months.

According to the newspaper, IMF officials had conveyed this to representatives of trade unions during a virtual roundtable held last Friday March 24. The virtual meeting was held on the initiative of the IMF and was attended by trade unions and professional associations representing the PTUA including the GMOA. (Colombo/Mar31/2023)

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Sri Lankan transport associations cut haulage and transportation fees after fuel price cut

ECONOMYNEXT –  Sri Lanka Association of Container Transporters and fuel bowser owners has decided to reduce the haulage charges and transportation fee, after the government cut the auto diesel prices by 80 rupees, association officials said.

“Due to the recent reduction in Auto Diesel price from March30, 2023, the committee has decided to reduce haulage charges by 7 percent,” association said.

Sri Lanka Private Petroleum Tanker owners has also decided to reduce the transportation fee of fuel by 8 -10 percent from April onwards.

“We will be meeting with the association members and will be deciding on exactly how much we will be reducing,” the General Secretary of the association Nimal Amarasekera told EconomyNext.

“We hope to reduce it by 8-10 percent and will be applied.”

Meanwhile United Lanka Fuel Transport Bowser Owners Association said, the price reduction will be done, and the specific amount will be calculated using the cost per kilometer for a transporting bowser.

“We have different types of bowsers such as 13,200 litre and 19,800 litre likewise,” Association President K.W. Charles told EconomyNext.

“So the cost per kilometer per bowser is different and after we calculate only we can give a specific percentage.

“It will come to effect from this month and the payments for the next month will be based on the new prices.”

Charles said, this is only based on the price reduction of fuel, however several costs as maintenance and spare part costs should also be considered when deciding the transportation cost, which is also being discussed with the Ceylon Petroleum Corporation.

Sri Lanka slashed fuel prices with effect from Wednesday (29) midnight, Power and Energy Minister Kanchana Wijesekera said, after a protest by trade unions of state-run fuel retailer Ceylon Petroleum Corporation (CPC) resulting in queues at filling stations due to supply disruption.

The price of Petrol 92 Octane will be slashed by 15 percent or 60 rupees to 340, Petrol 95 Octane 95 will be reduced by 26.5 percent or 135 rupees to 375, Auto Diesel by 19.8 percent or 80 rupees to 325, and kerosene by 3.3 percent or 10 rupees to 295. (Colombo/ March31/2023)

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