Sri Lanka FDI up on state aircraft purchases; deals to be probed: opposition

COLOMBO (EconomyNext) –  A sharp increase in reported  ‘foreign direct investment’ in 2014 came from a state aircraft purchases and the deals will be probed if they came to power, Sri Lanka’s opposition said.

Common opposition candidate said expertise was needed to stem the massive losses reported by state-run SriLankan Airlnes since it parted ways with Emirates, and Mihina Air, a budget airline built with people’s money by President Mahinda Rajapaksa.

“Mihin Air is a large national robbery (jathika dana mankollayak),” common opposition presidential candidate Maithripala Sirisena told a business forum in Colombo.

“This was done for the private needs of one or two people. SriLankan and Mihin Air we will have to merge in some ways. The major frauds committed in equipment purchases will be investigated and those responsible punished.

“We need to people with specialist international knowledge to top positions to manage these airlines. At the helm of both these airlines is not people with specialist knowledge who are there.

You all know that Mr Rajapaksa’s family members are there. So they have become large wealth destroying white elephants. The essential thing is to have capable people running them.”

Opposition leader Ranil Wickramasinghe said in the first half of 2013 foreign direct investment into Board of Investment enterprises the services sector was only 18 million US dollars. But in 2014 it was 410 million dollars.

Wikramasinghe claimed that 330 million US dollars of that came from payments for aircraft to state airlines.

SriLankan has been getting 100 million US dollar injections a year from people’s taxes and also borrowed heavily abroad with Treasury guarantees and has run losses of over 110 billion rupees since Emirates left as managing equity  partner.

Wickramasinghe said ways had to be found the repay the debt without burdening the people with more taxes.





India’s newly appointed Modi administration is also putting pressure on Air India to stem losses.
Ruler-run airlines around the world has run into trouble after airline de-regulation with people owned and run airlines coming up and budget airlines making travel cheap for ordinary citizens.

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