Ministers to submit views on SriLankan restructuring proposal

President Maithripala Sirisena has reportedly requested all Cabinet ministers to submit their views on the recommendations made by State Minister of Finance, Eran Wickramaratne on restructuring SriLankan Airlines on the basis of a public-private partnership.

The State Minister in his report to the ministers has noted that the financial position of the national carrier and pointed out that the amount owed by SriLankan to the state banks and the Ceylon Petroleum Corporation (CPC) stood at Rs.102.55 billion or US$ 582 million as at April 30, 2019, with an annual interest payable of US$ 62 million.

He has pointed out that the ballooning debt was a contingent liability on the Treasury impacting the country’s credit rating and that the debt component was reaching one per cent of the Gross Domestic Product -- an amount equivalent to Rs.7,300 for every citizen.

The State Minister has further noted that the national carrier required an additional sum of US$ 250 to 300 million in new capital to update the fleet, business practices, competition and tourism demand, but the Treasury was unable to provide such an amount.

Wickramaratne has added that SriLankan would have a cash deficit of US$ 874 million within the next five years but the new restructuring would enable the airline to break even within a few years.