A Sell-Out At SriLankan Airlines
- SriLankan Continues Handing Over Duty Free Contracts
By Dinouk Colombage
SriLankan Airlines has once again handed over the supply of duty free products to Phoenix Rising Ventures (Duty Free Partners) ignoring required tender procedure.
Following our exposé last week titled ‘In-flight Duty Free Sales on SriLankan Handed Over On A Platter To Personal Favourite’, which highlighted the unethical manner in which the supply of cosmetics and fragrances was awarded to Phoenix Rising Ventures, reliable sources confirmed that the wine and champagne supply has also been handed over to Phoenix Rising Ventures bypassing proper procedure.
On March 2011, a tender was called for 11,000 cases of Red and White Wine, 7,500 bottles of 75ml Champagne and 7,500 bottles of 37.5cl Champagne. The closing date for the tender was July 2011, while the contract was to be awarded in September that year for supplies to commence in January 2012.
However, the tender was never evaluated and earlier this year the contract was handed over to Dilan Wirasinghe and Raju Chandiram of Phoenix Rising Ventures.
According to normal procedure a wine tasting is done of the wines and champagnes by qualified professionals before a decision is taken. In this instance the supplies, which had been sent over for tasting by the prospective suppliers, remain unopened in the SriLankan Airlines’ stores.
The contract is believed to be annually worth US$ 750,000 (Rs. 97.5 million). If this contract has been awarded to Phoenix Rising Ventures for a period of five years (as was done with the supply of the fragrances and cosmetics) then the total value of this contract would exceed US$ 3.75 million (Rs. 487.5 million) .
When Dilan Wirasinghe was contacted, he declined comment saying, “I am sorry but you will have to discuss this with SriLankan Airlines, I cannot comment on this.”
However, Kapila Chandrasena (CEO of SriLankan Airlines) did not respond to the queries regarding this matter.
Phoenix Rising Ventures was awarded the contract to supply SriLankan Airlines with all in-flight duty free goods for the next five years, with the option of extending for a further two years.
Initially tenders were called for the supply of fragrances and cosmetics for a period of six months, however in April this year the company was given the entire management and total supply of all in-flight products.
All this happened in the backdrop of inside sources claiming that SriLankan disregarded required tender procedure in choosing a supplier of this magnitude. Nishantha Wickremesinghe, SriLankan Airlines Chairman, admitted to having bypassed the tender procedure but said the Board had approved the contract.
In 2011 SriLankan Airlines earned over US$ 7 million for their in-flight sales (which had been managed by the airline), over a period of 7 years. Phoenix Rising Ventures stands to earn as much as US$ 50 million over the next seven years for which they have been contracted to handle in-flight duty free sales.