By Sonali Samarasinghe
Only Transavia, the company making a
handsome profit at public expense from an
aircraft wet leased to Mihin Lanka would be
facetious enough to congratulate Aviation
Minister and Presidential elder brother
Chamal Rajapakse on his success in
resurrecting the budget airline.
On new year's day Mihin's much troubled
aircraft finally flew on its inaugural
flight to Dubai amidst allegations the trip
was an all expenses paid journey as there
were hardly any revenue yielding passengers.
An allegation hotly denied by another Mihin
However 2009 did not bode well for the
budget airline. On its second flight on
Friday (2) it had sold only 60 outbound
tickets, all one way and just 10 inbound
from Dubai back to Colombo.
Some Mihin officials are livid stating no
proper promotional programme has been
undertaken by its commercial department
resulting in poor ticket sales. These
officials are paid colossal salaries each
month courtesy the public, industry sources
say pointing out that Mihin would crash
dismally in such a scenario.
Earlier on December 20, just 12 days before
Chamal and his officials promised to re
launch Mihin for the umpteenth time on
January 1, 2009, it was not five golden
rings and a partridge in a pear tree that
Chamal Rajapakse was to receive, but a very
encouraging email promising - reading from
left to right - one passenger aircraft in
exchange for a goodish bit of public money
with the enticing subject line, 'Yours To
Failure to launch
Recall that Chamal promised to launch Mihin
many times in the last two months. (Please
see past copies of The Sunday Leader)
But amidst allegations of clashes within the
Mihin management itself as Chairman Raja
Edirisuriya and CEO Kapila Chandrasena
locked horns in a battle for supremacy the
airline could not seem to find either the
aircraft or the passengers to fly as it
struggled to get its act together.
Funnily enough Edirisuriya comes highly
recommended by Gotabaya Rajapakse as the duo
knew each other from their days in the US of
A, while Chandrasena is a close buddy of
Chamal Rajapakse's son Sasheendra. Whatever
the connections to the Rajapakses the two
don't seem to hit it off as allegations and
counter allegations are hurled of sabotage
by each camp.
While Mihin sources say there are moves to
get down a second aircraft at public
expense in three months to fly the Indian
routes to Trichy and Trivandrum the
negotiations remain sketchy even as
Edirisuriya loyalists claim some at Mihin
are moving to oust him from his post as
Edirisuriya however could not be contacted
as he had left to the USA.
Meanwhile SriLankan Airlines is shutting
down four of its Indian destinations at the
end of the winter schedule end March. But it
is unlikely Mihin could derive any benefit
from this either.
Be that as it may Iranjan Carson Gajasinghe,
local agent for Transavia, a subsidiary of
KLM and Air France, was to send an email on
December 20 to the Aviation Minister. (See
box for full text of email.)
'Yours to Fly'
As if it were a new year's gift of
exceptional value, Gajasinghe bequeaths the
aircraft to Chamal stating 'Yours to Fly.' A
play no doubt on the budget airline's own
logo and slogan. It certainly may be
Chamal's to fly but it's the public of Sri
Lanka that continue to pay dearly as the
government lavishes itself with goodies and
the economy plummets.
"Dear Sir, First of all we would like to
congratulate on your success in resurrecting
Mihin Lanka and guiding them to launch this
fine product in our beautiful paradise.
Aircraft is ready for delivery to Colombo
and it is 'Yours to fly'," Gajasinghe
writes. Adding for good measure that he has
attached some photographs of the aircraft
with Mihin livery.
Blessed or cursed?
Gajasinghe ends on a spiritual note calling
upon the Triple Gem to bless the eldest
Presidential sibling. Meanwhile it is left
to be seen who will bless the rest of this
country that is being taken down the
financial drain by the Rajapakse foursome.
While Mihin's relaunching dates themselves
were chaotic in that Minister Chamal had
first promised cabinet it would be done on
December 15, 2008 then postponed it for
December 21 ostensibly due to bitter rivalry
between Chairman Edirisuriya and CEO
Following frantic shuttling to India by
Chairman Raja Edirisuriya to which Mihin had
neither overflying nor landing rights
(Please see past copies of The Sunday
Leader) the airline's coordinator Gamini
Abeywardena confirmed the airline had run a
proving flight on December 30 to Trivandrum
where Civil Aviation officials were on
No operational manual yet
Shockingly however sources at Mihin claim
that the aircraft specific operational
manual has yet to be submitted to the Civil
Aviation Authority without which the CAA is
unable to grant an operational license.
Mihin sources claim that a license was
obtained on some hurriedly put together
documentation with a promise of the CAA
later being handed a more comprehensive
While this seems to be the ad hoc and
cavalier level of management that now
prevails at the budget airline - an airline
which has as its sole responsibility the
lives of its passengers - those in charge
either ducked questions or were conveniently
Director General Civil Aviation, Parakrama
Dissanayake was constantly 'at a meeting.'
Media coordinator for Mihin Lanka Gamini
Abeywardena the man who should have known
the answer to many of our questions declined
to comment on the status of the operational
manual and referred us to the Acting
Chairman and CEO, Kapila Chandrasena. The
CEO was constantly engaged or at the
Ministry and not available.
Nonetheless the inaugural flight to
did take place at 6 pm on January 1, 2009
with some 143 passengers. Sources allege
that the flight was a mere turn around
flight which carried no revenue yielding
passengers but guests of Mihin given an all
expenses paid about turn trip as they were
served with samosas, cake, coffee and apple
Upon arrival at the
a 20 minute ceremony was held at the airport
lounge and that was that. The return flight
to Colombo carried about 80 passengers.
Mihin's Media Coordinator Gamini Abeywardena,
however denied the allegations it was an all
expenses paid trip and told The Sunday
Leader there were 143 revenue yielding
passengers on the Colombo Dubai flight but
could not confirm the number on the return
flight. Abeywardena also confirmed that a
one way ticket cost Rs 22,250 while a return
air ticket to Dubai cost Rs. 48,460.
Other sources told The Sunday Leader about
seven Mihin officials were on the flight
while one of its Directors, Chandana
Liyanapatabendi had also been accompanied by
Bad news for Mihin
But there's bad news for Mihin. Industry
sources say to operate the flight even to
break even would take some doing. Fuel
charges alone would come to about USD 780
per hour. If the aircraft operates three
flights a day which would be a bare minimum
to cover the costs of the lease itself the
burn rate would be about USD 10,920 at 18
hours a day into 30 which is about USD
400,000 for fuel alone.
Other components added would work out to USD
700,000 they claim. This is excluding
salaries, head office costs and other
The grand total inclusive of wet lease
payment would come to about USD 1.7 million
which means Mihin should earn about 2.5
million dollars and enjoy a passenger rate
of about 95% to break even.
If this is the case then a one way ticket at
Rs. 22,250 just won't help the airline.
Industry sources say Mihin would have to
sell a one way ticket to Dubai at about Rs.
35,000 which is then close to the price of a
ticket sold by SriLankan Airlines and
defeats the purpose of a budget airline and
Mihin becomes uncompetitive in the market.
Planned loss absurd for a govt.
Sources also say that while a private
company may take a planned loss in its first
year of operations it is unconscionable for
a government and specially one burdening the
people to such an extent it flouts judicial
orders and passes war heavy budgets that
incorporate allocations for silly little toy
projects of the Rajapakse family, to do so.
The Ceylon Petroleum Corporation may be on
the verge of collapse burdened by massive
debt through corrupt hedging deals and bad
debt not least of which is a colossal Rs 640
million owed to the CPC by Mihin, even
though the public get only a discount of Rs.
2 on petrol, but the white elephant
traversed the sky to Dubai on its only
aircraft wet leased through the blood, sweat
and tears of an unwilling public.
President Percy's pet project
Already the public has doled out hundreds of
millions of rupees to President Percy's pet
project. The company still owes Bank of
Ceylon over Rs. 1 billion, the CPC over Rs.
640 million and SriLankan Airlines over Rs.
Despite Chamal Rajapakse's extravagance in
taking on a further debt of US$ 1 million
per month for three months to wet lease one
aircraft, Mihin the government knows only
too well is already fraught with US$ 3
million in debt with a loss of over US$ 1.5
million from its only year of operation.
It was in November that Aviation Minister
Chamal Rajapakse submitted the Cabinet Paper
No.2008/50 to wet lease an aircraft through
Transavia. The Cabinet Paper itself
contained many misleading claims and factual
flaws which this newspaper revealed in a
series of articles in November and December
The Cabinet Paper it will be recalled sought
to use Rs. 1,100 million out of the
unutilised funds from the 2008 budgetary
allocation of the Ministry of Ports and
Aviation to relaunch Mihin by December 15 or
to alternatively borrow this sum from
Airport & Aviation Services Ltd. with an
agreement to pay back these funds when the
financial allocation would be received from
the National Budget for 2009.
President Percy it will be remembered
allocated Rs. 6 billion in public funds to
his most useless projects, Mihin Lanka and
the Weerawila Airport while the economy
keeps hurtling further into an abyss.
The Rs. 3 million lease price for the 186
seater Boeing 737-800 per day however does
not include the landing fees for the
airports nor the several other expenses of
operating an airline. The total cost of the
lease for a three month period would
therefore be about Rs 300 million, even
though the November 11, 2008 Cabinet Paper
sought approval and in fact obtained
approval for Rs 1.1 billion to re launch and
stabilize the budget airline.
Chaos at Mihin
Be that as it may even though Mihin now
intends to commence flights to Trichy and
Trivandrum, landing rights to India have
still to be cleared. Recall (see past two
weeks' copies of this newspaper) that the
Indian Civil Aviation Authority had received
two different flight schedules, one sent by
the Mihin Chairman and another mischievously
sent purportedly by his enemies within the
company thus wreaking havoc in the minds of
confused Indian officials.
Yesterday another Director of Mihin, Lal
Thalgaswatta was to fly to India to clarify
matters and obtain landing rights
Earlier Mihin was denied over-flying rights
due to non payment of several dues under
international aviation laws and regulations.
However Mihin sources claimed that these
dues have now been paid.
Heralding the new year Rajapakse style
As the Rajapakses go merrily on consider
only this. Some of us in Colombo may have
heralded the new year to sounds of Auld Lang
Syne but many Sri Lankans merely buried
President Mahinda Rajapakse when confronted
with elderly women complaining their sons
have no jobs immediately points them towards
the nearest army camp. Plenty of vacancies
at the war front he tells the desperate
mothers. No room to dream of architecture
and medicine, gardening and interior design
for the young village lads. Just a short
spell of life or death in the trenches.
Yes. Well into 2009 Sri Lankans will
continue to bury their dead and they will do
so on an empty stomach. And it is even as
the public deriving little benefit from
judicial orders, as a government of impunity
rolls along on the wheels of hate and fear,
sit around the kitchen table wondering what
to do next, that Rajapakse's most shameless
excess - Mihin Lanka flies again.
"Yours to fly"
From: Iranjan Gajasinghe [mailto:
Sent: Saturday, December 20, 2008 2:51 AM
To: Hon. Chamal Rajapaksa
Cc: Withnage G. S; Thosapala Hewage;
Raja Edirisuriya; Raja Edirisuriya;
Bandara-Anura ATC; Lal Talgaswatte;
Robert Czyrt; Gamini PA- Chairman MJ
Subject: Yours to fly
Hon. Minister Chamal Rajapaksa, Minister
of Ports & Aviation, Colombo 1, Sri
Dear Sir,First of all we would like to
congratulate on your success in
resurrecting Mihin Lanka and guiding
them to launch this fine product in our
beautiful paradise. Aircraft is ready
for delivery to Colombo and it is "Yours
Attached please find some photographs
with Mihin Lanka livery.
May The Triple Gem Bless You All.
(AJ) Iranjan Carson Gajasinghe Jr.
Aircraft Lease Administrator - Transavia
(Subsidiary of KLM-Air France)
Airport D-40474 Dsseldorf, Germany
purification of a dubious supplier
Water Supply Minister A.L.M. Athaullah
By Dilrukshi Handunnetti
A supplying company that allegedly offered a
forged bank guarantee while contracting with
the National Water Supply and Drainage Board
(NWSDB) and now referred to the National
Procurement Agency (NPA) for fraud and
contractual violations has once again bid
for a similar NWSDB tender despite
heightened controversy over its
qualifications to bid.
Asha Lanka Enterprises (Pvt) Ltd, a supplier
that secured a NWSDB tender to supply
aluminum sulphate for water purification at
a cost of Rs. 24,550,000 as the second
lowest bidder has allegedly submitted forged
bank guarantees to the NWSDB - but the
blacklisting of this company, despite being
requested is yet to be made official.
While the NWSDB officials have gone public
with the fact that the bank guarantees were
indeed forged, the doors are still kept open
allowing the same company to once more
submit its bidding documents for a second
tender, this time around to supply 1500 MT
of aluminum sulphate to the value of Rs.
9,900,000 (US$ 430,000).
Let's go back to the initial tender secured
by Asha Lanka Enterprises (Pvt) Ltd. in
August 2008. Seven companies bid for the
initial tender to supply 500 MT of aluminum
sulphate and the tender results were
announced on August 29, 2008. The results
included Patno Construction's offer of Rs.
22,550,000, Cee Green Engineering (Pvt) Ltd
(Rs.25, 750,000), Dowell International (Pvt)
Ltd (Rs. 26,722,500), Engineering Services
Ltd (Rs. 28,475,000), Rodesha Enterprises (Rs.
29,102,300) and Natco Pacific Pte (Rs.
Second lowest bidder
The tender was awarded to Asha Lanka
Enterprises (Pvt) Ltd, the second lowest
Subsequent to the awarding of the tender, on
September 22, General Manager, NWSDB, K. L.
L. Premanath wrote to the selected company
informing of the decision.
The letter stated that the tender offer of
Rs. 24,925,000 has been accepted and
required a performance bond to be submitted
in the prescribed form from a recognised
bank of an amount of 10% of the total
contract price valid for a period of four
and a half months, to be submitted within 14
days from the date of awarding the tender.
Consequently, Chairman, NWSDB received a
performance guarantee dated October 6, 2008
bearing No: 17/KOL/GTN/289 for Rs. 2,492,500
issued on behalf of Asha Lanka Enterprises (Pvt)
The letter acknowledged that a performance
guarantee was required as per contractual
conditions which the bank was happy to offer
and undertook in writing to pay in total an
amount of Rs. 2,492,500 upon receipt of the
first demand in writing accompanied by a
written statement stating that the
contractor is in breach of its obligation(s)
under the contract, without the NWSDB
needing to prove or to show grounds for the
demand such sums specified.
However, the letter stated that the
performance guarantee would indeed expire by
February 28, 2009 and any demand for
payments under it must be received by the
bank on or before the specified date.
Accordingly, the National Water Supply and
Drainage Board (NWSDB) signed a contract
with Asha Enterprises Pvt. Ltd., on October
7, 2008 to supply and deliver 500 Mt of
It was thus agreed to complete the work
described or referred to in the Bill of
Quantities to the entire satisfaction of the
engineer and to have the first consignment
delivered on or before November 7, 2008 and
the second consignment by December 8, 2008.
It was further agreed in writing that the
contractor would be paid Rs.24, 925,000 plus
applicable VAT for the execution of the said
work and required as security for the due
and proper performance and fulfillment of
the contract, a performance guarantee in an
amount of 10% of the contract price in
favour of the Board from a bank approved by
the engineer, as surety amounting to Rs.
The contract was signed by Chairman, NWSDB,
S. C. Amarasinghe and Vice Chairman, NWSDB,
Dr. A Uthumalebbe on October 7, 2008 at the
Ratmalana office. On behalf of the
fraudulent company, A. A. M. Rinthas signed
the papers in the capacity of director, Asha
Lanka Enterprises (Pvt) Ltd.
It was made to believe, at the time of
signing the contract that the performance
guarantee was already issued by the bank, as
it bore the date of October 6, 2008 and had
every sign and symbol of being an authentic
bank guarantee at the time of contracting.
Further to that, another letter was also
issued under the letterhead of Commercial
Bank, addressed to the Chairman of the NWSDB.
Advance payments guarantee
Dated October 30, the Commercial Bank,
Kollupitiya Branch wrote to Chairman,
National Water Supply and Drainage Board
this time regarding the advance payments
guarantee No: 19/KOL/GTN/301 for Rs.
4,985,000 issued on behalf of Asha Lanka
Enterprises (Private) Limited.
The letter referred to the contract (No: AGM/SUP/CHEM/ALS/2008/08)
entered into by the said company on
September 22, 2008 for the supply and
delivery of 500MT aluminum sulphate to the
The letter added that it was understood by
the Bank that according to the conditions of
the contract, an advance payment guarantee
was required and yet again offered an
irrevocable undertaking to pay Rs. 4,985,000
upon the receipt of the first demand in
writing accompanied by a written statement
stating that the contractor is in breach of
its obligation(s) under the contract.
The letter further informed that the said
guarantee expired on February 28, 2009 and
stipulated that any demand for payment under
this guarantee should be received by the
Bank on or before the said date.
It is in the meantime that the truth
surfaced that the bank guarantees were
nothing but forgeries that caused undue
embarrassment to reputed banks besides being
an attempt to take the NWSDB for a complete
Cancelled the bid
At this point, the NWSDB Ratmalana quickly
took steps to bring the matter to the notice
of the authorities and disqualified the said
company and cancelled the bid.
The NWSDB promptly informed the National
Procurement Agency (NPA) as stipulated and
through that the Criminal Investigations
Department (CID) to ensure a speedy probe
and put an end to the duplicitous company's
wheeler dealing. What is more, even the
Fraud Bureau had been alerted with regard to
the forgery. But these facts have been
skillfully hidden, as it now transpires.
On August 6, 2008 the National Water Supply
and Drainage Board (NWSDB) called for
tenders for the supply and delivery of 1500
MTs of aluminum sulphate.
The newspaper notice specified that the
Chairman, Ministry Procurement Committee,
Ministry of Water Supply and Drainage would
receive bids for the same and close such on
September 11, 2008 at 10 am.
The delivery of the tender was to be within
four months from the date of the award.
Bid documents were thus issued to
manufacturers or their local accredited
agents for the supply and delivery of
aluminum sulphate and a bid security of
Rs.800,000 was to accompany as bid security.
Bid once again successfully
But for this second tender bearing No AGM/SUP/CHEM/ALS/2008/03,
Asha Lanka Enterprises (Pvt) Ltd. bid once
again successfully, inside sources reveal.
It is reliably learned that the company that
is yet to be blacklisted has managed to
submit its bid for US $ 430,000
(approximately Rs. 9,900,000) on September
Besides Asha Lanka Enterprises, several
other companies also submitted their bids.
Included among the competitors were Patno
Construction's offer of US$ 532,400, Cee
Green Construction's offer of US$ 532,400,
Missive Lanka Pvt. Ltd. at US$ 519,950,
Dowell International (Pvt) Ltd at US$
529,450 and Engineering Services Pte. at US$
In the meantime, what happens within the
Ministry is still a mystery to most, for
other bidders do have fair knowledge that
Asha Lanka Enterprises that secured the
first tender suffered a terrible
disqualification. But investigations are
slow to move, the blacklisting, according to
inside sources yet to happen.
Thus with one messed up tender, it looks
like the dubious company might just about
stand another chance, despite alleged
forgeries of bank guarantees.
What's more, the NWSDB officials who are
concerned about this development have
another legitimate query besides the
possible fraudulent conduct. Even if the
name is some day cleared, how to believe in
the safety of a chemical supplied by a
company of this nature to be used for water
purification. God help the consumers.
Uses of Aluminum sulphate
Aluminium sulphate is used in water
purification and as a mordant in dyeing
and printing textiles. In water
purification, it causes impurities to
coagulate which are removed as the
particulate settles to the bottom of the
container or more easily filtered. This
process is called coagulation or
Three attempts to reach the Minister of
Water Supply and Drainage, A. L. M.
Athaullah to obtain his views on the
dubious company bidding for a second
tender to be awarded by the Ministry
Likewise, Director Tenders, Ministry of
Water Supply and Drainage, Sujaideen was
also unavailable to comment.
However, his office informed he would be
only available to speak to the media
tomorrow (5) at which point full details
could be made available.
A senior Ministry official speaking on
the basis of anonymity told The Sunday
Leader that the Ministry would award the
tender to the most suitable bidder and
would not make questionable decisions
regarding any tender.
Additional General Manger, NWSDB,
Ratmalana, R. A. A. Ranawaka confirmed
that the bank guarantees offered to the
NWSDB were forged and explained that in
keeping with the procedural
requirements, the National Procurement
Agency (NPA) was requested to blacklist
"We have informed the Treasury and the
NPA. Further, through the NPA, we have
informed the Criminal Investigations
Department (CID) to investigate into the
The directors of Asha Lanka Enterprises
(Pvt) Ltd were not available for
Top bank officials declined to comment
but admitted to the fact that a forgery
had taken place. They said the matter
has been brought to the notice of all
the relevant authorities and the bank
was keen to have its name cleared.
Officials from the Fraud Bureau
confirmed that the matter has been
brought to their notice by the NWSDB and
said the matter was under investigation.
Officials added that it has been already
established that the bank guarantees
have been forged and that the bank also
has complained with regard to the same,
in addition to the NWSDB's complaint.
National Procurement Agency (NPA)
Top sources from the National
Procurement Agency (NPA) confirmed that
the Water Supply and Drainage Board (NWSDB)
has informed them of the forged bank
guarantees and that the said company was
soon to be blacklisted.
When contacted, senior CID officers
declined to elaborate, adding that the
matter has been brought to the
Department's notice only very recently