CAASL shoots down SLAF's commercial flights proposal

By Mandana Ismail Abeywickrema

The Civil Aviation Authority of Sri Lanka (CAASL) has objected to the move by the Sri Lanka Air Force (SLAF) to operate passenger flights to and from the north without an Air Operations Certificate (AOC). This was stated in a letter sent to the Aviation Ministry last week.

The operation of passenger flights without an AOC is in total violation of International Civil Aviation Organisation (ICAO) procedures, the letter states.

CAASL Chairman, Lal Liyanarachchi told The Sunday Leader that the SLAF has not yet applied for an AOC. He added that a letter has already been sent to the Aviation Ministry Secretary with regard to the issue of the SLAF attempting to operate commercial flights within the country without an AOC.

Liyanarachchi explained that in the aviation industry, even flights operating within a country should comply with international standards.

"An AOC is not any ordinary certificate, it is issued after the authorities are provided with a detailed report on the operations," he said, adding that any commercial airline transporting civilian passengers should have an aviation certificate.

Although the SLAF was engaged in civilian passenger transportation during the war under special circumstances, it could not do so on a commercial basis.

"The SLAF does not require an AOC to transport civilian passengers during the war. Yet, the passengers travelling in the aircraft at the time have to sign a form stating they take full responsibility for whatever happens to them in the course of the flight," Liyanarachchi said.

He pointed out that since the SLAF is now planning on transporting civilian passengers on a commercial basis, it needed to get an AOC.

When asked if the CAASL was informed by the SLAF of its decision to operate civilian passenger flights on a commercial basis, Liyanarachchi said the Authority was unaware of the decision till news appeared in the media.

"No commercial flight could operate without an AOC," he said. He further noted that the authorisation of the Civil Aviation Authority and aircraft insurance were important to operate civilian passenger flights on a commercial basis.

An AOC is an ICAO requirement to ensure the safety of the passengers. Sri Lanka has been a member of the ICAO, agreeing to abide by its codes, since 1948.

Wing Commander Dayal Wijeratne from SLAF's Helitours, which is to handle the passenger flights to the north, was not available for comment.

Difficult economic reform measures for govt. says IMF

By Mandana Ismail Abeywickrema

The IMF Executive Board after granting a US$ 2.6 billion stand by facility for Sri Lanka said the country’s programme would entail “difficult economic reform measures.”

The Executive Board approval was received amidst several key members abstaining from voting to grant the stand by facility to Sri Lanka. The UK, US, France and Germany have reportedly abstained from voting at the meeting.

The Guardian newspaper reported that the abstention, the first by the UK since 2004, signals the degree of unease in London over the handling of the humanitarian crisis in Sri Lanka following the government’s recent victory in its civil war against the Tamil Tigers.

UK’s Finance Secretary Stephen Timms has reportedly said that “Our objectives for Sri Lanka remain to work to secure long-term peace and prosperity for the country through reconciliation between Sri Lanka’s communities - Sinhalese, Tamils, Muslims and others - and a fully inclusive political settlement.”

Timms had said in a letter to MPs on Friday night that Britain “remain[s] concerned with the humanitarian situation in the internally displaced people’s camps.”

Sri Lanka’s programme with the IMF includes reducing the budget deficit, maintain economic growth of at least 3% and build up the country’s foreign reserves to US$ 2.49 billion with a flexible exchange rate.

The IMF said the Sri Lankan government has put in place revenue enhancing measures and intend to introduce further reforms to reduce tax exemptions and broaden the tax base beginning in the 2010 budget.

Sri Lanka’s programme with the IMF has four key elements – fiscal policy, exchange rate and monetary policy, social protection and financial system. Under fiscal policy the government would aim at reducing the budget deficit to 5% of GDP by 2011, from a target of 7% of GDP this year, in line with the Fiscal Responsibility Act.

Also, revenue increasing measures include broadening the tax base, reducing tax exemptions and improving enforcement, which are coupled with measures to rationalize expenditures. Cuts in military and other expenditures will help make room for post-conflict reconstruction and relief spending.

IMF’s Deputy Managing Director and Acting Chairman, Takatoshi Kato said while the country’s programme would require difficult economic reform measures, the government should take advantage of the opportunity created by the end of the conflict to ensure national reconciliation, restore macroeconomic stability, and promote strong and durable growth

The IMF approved a US$ 2.6 billion 20-month stand by facility for Sri Lanka to support the country’s economic reform programme.

Upon the Executive Board’s approval, US$ 322.2 million was made immediately available to Sri Lanka. According to the IMF, the remaining amount will be phased in, subject to quarterly reviews.

Clive Haswell was focused on commissions

By Faraz Shauketaly

In a damning affidavit given to the Supreme Court by Kimarli Fernando formerly of Standard Chartered Bank, the full extent of the Standard Chartered Bank's involvement in roping in the CPC on hedging deals has been revealed.

Standard Chartered Bank was looking at making commissions of Rs. 1 billion locally  and a further Rs. 1 billion overseas. The making of Rs. 1 billion from CPC would have made it the highest revenue ever recorded from a customer in Sri Lanka.

In a candid and frank disclosure,  Fernando also confirms that  Ashantha De Mel, the former CPC Chairman, did not wish to go in for hedging transactions. 

Kimarli Fernando had a long and almost bitter engagement with the CEO of Standard Chartered Bank, Clive Haswell. Fernando confirms in her affidavit that Haswell had no experience in Risk Management or as a CEO and therefore she took it upon herself to explain various finer points which included warning him that these deals would expose CPC to unbearable losses.

The Standard Chartered Bank was already aware that the CPC was a "weak" client in terms of risk management and to add to their concerns the Standard Chartered Bank had no letters of comfort to cover their exposure with the CPC in terms of their other dealings with the CPC.

In astonishing details that vindicates the position of the perception that the CPC was well out of its depth in these matters, Fernando had warned her CEO - the man she says had no expertise in risk management or as the CEO - that the CPC had neither the expertise nor the understanding to enter into these transactions.

In a vindication of and mirroring the Supreme Court direction in the first hedging case (which was later terminated by the former CJ) Fernando had also warned her employers that no sensible private sector company for example would enter these deals because they were so one sided. The Supreme Court used the words "inequitable" to describe these deals.

In October 2007 Ashantha De Mel had told her he had no appetite to lose money and therefore in that context had no interest in structures of 12 months, preferring instead for short term tenors - where the CPC did indeed make money on their "in the money" deals.

Fernando also points out that the CPC did not sign the ISDA agreements - as The Sunday Leader too revealed in articles relating to the People's Bank. This was no oversight then on the part of the CPC and certainly therefore, intentionally not given to the People's Bank either. The People's Bank however went ahead with their deals without the proper signed documentation, which makes a mockery of bankers' Risk Management techniques and actions. The Standard Chartered Bank too, went ahead with their first deal without a signed ISDA.

Was it for expediency, to satiate the voluptuous appetite Haswell had for these transactions or the fat profits he expected for his local operation and for his group's operations overseas? Perhaps it was a combination of both. In an attempt to deflect the CPC's decision to not give the ISDA SCB suggested to CPC that they obtain independent legal advise to the exclusion of the Attorney General's department - such was their indecent haste to garner the CPC into this veritable imbroglio - and conspire in effect to rob the Republic's Treasury of hard earned foreign exchange, the majority of which has been remitted to Sri Lanka by its migrant workforce.

Reconnecting the umbilical cord

By R. Wijewardene

The upcoming conference of South Asian transport ministers in Colombo will see Sri Lanka submit proposals for renewing the ferry and rail services that carried passengers from the island's North West coast to India until the '80s.

The government also hopes to establish a new ferry service between Colombo, Tuticorin and Cochin.

While there has been intermittent talk of reviving ferry services to both India and the Maldives a passenger terminal was even refurbished for this purpose in 2000. Security concerns have repeatedly stalled efforts at reopening passenger services between the countries.

The railway/ ferry service which transferred passengers by sea from Talaimannar on the northern tip of Mannar island to Dhanushkodi station on the edge of India's Rameswaram island stopped operating in the early '80s. Reviving the service would enable thousands of passengers to travel cheaply to India. At present Sri Lanka remains extremely isolated with the Bandaranaike Airport effectively the only means of entering or leaving the country.

Trade union action hinders work at Cancer Hospital

By Nirmala Kannangara

The smooth functioning of the Cancer Institute Maharagama has been hindered due to trade union action initiated by the JVP affiliated All Ceylon Nurses Union (ACNU), Director Cancer Institute, Dr. Sulochana Yoganathan said.

“Claiming that the Cancer Hospital nurses are facing health hazards due to chemotherapy drug administration, the ACNU has demanded Rs.12, 000 as a monthly risk allowance and has urged the Health Ministry to grant the nurses foreign and local training Dr. Yoganathan explained.

“There is no truth to these charges as the Health Ministry has taken all precautionary measures to prevent any harm to those who mix the chemotherapy medicine. How can these union members claim that they need a special risk allowance when most of the time it is the junior nurses who mix these medicines?

“What these unions want to do is to claim that they too mix the medicine and request for a risk allowance. The Health Ministry very correctly has refused to pay the risk allowance  to these trade union members and had transferred them to other hospitals where they would not face a health risk,” Dr. Yoganathan told The Sunday Leader.

According to Dr. Yoganathan the Health Ministry has decided to transfer 54 nurses to other hospitals in Colombo and its suburbs, but they have refused to accept the transfers.

“Their intention is clear. If they are really worried about their health then they could have easily reported to the hospitals they have been transferred to. But instead of reporting to work they have gone before courts to get an injunction order, which shows that they want a salary hike and other facilities but are not really worried about their health,” added Dr. Yoganathan.

Dr. Yoganathan further alleged that ACNU members had changed the password of the ‘cyto toxic safety cabinet’ in which the chemotherapy medicine is mixed.

“The trade union members have changed the password of this cyto toxic safety cabinet on Wednesday and the pharmacists who mix these medicines have found it difficult to carry out the work effectively. Since the Health Ministry has rejected their demands they have now started sabotaging the work in the hospital,” claimed Dr. Yoganathan.   

Meanwhile Senior Consultant Oncologist Dr. Mahendra Perera told The Sunday Leader that trade union activities have sabotaged the functioning of the hospital and welcomed the Health Ministry’s decision to transfer those who are in fear of their health to other hospitals with lesser health hazards.

“Now they claim that they cannot leave the patients in the hands of inexperienced nurses. As a result of the ACNU nurses’ failure to mix the chemotherapy drugs there was a delay in administering these medicines to the patients a few weeks ago. The necessary medications have to be given to the patients at the proper time if their lives are to be saved. Now the Cancer Hospital has a new batch of nurses who are capable of handling the work without any hindrance,” added Dr. Perera.

However refuting the allegations levelled against the ACNU, its Secretary Sisira Senaratne  told The Sunday Leader that they have been transferred under malicious circumstances and added that they were compelled to go before the Appeal Court to get an injunction. “We got an injunction and hope that the Health Ministry will reverse its decision,” added the Union Secretary.

Government accepts it will not be able to resettle IDPs within 180 days

By R. Wijewardene

In statements made at a forum for regional security in Thailand Foreign Minister Rohitha Bogollagama has accepted that the government will not be able to meet its original pledge to resettle the IDPs currently held in Vavuniya's camps within six months. Under intense international pressure to allow those displaced in the fighting to return to their homes in the Wanni as soon as possible the government had previously insisted that civilians would be allowed to leave the camps within 180 days. The statement from the Foreign Minister indicates however that the government now accepts the process might take longer.

Almost 300, 000 civilians are being held at the camps. The legitimacy of the camps and the effective detention of the Wanni's entire civilian population remains a sensitive political and legal issue.

In post war talks with the Indian foreign minister the Government of Sri Lanka committed to resettling displaced civilians within a six month time frame.

The Centre for Policy Alternatives CPA has filed a fundamental rights petition claiming that the camps are illegal as they violate the IDPs' right to freedom from arbitrary arrest. The legality of effectively detaining over 300,000 people by denying them the right to free movement remains open to question.

Addressing parliament on Wednesday UNP MP A. M. M. Naushad urged the government to state openly that the 300,000 people held at the camps were detainees rather than IDPs as they did have homes to return to but were being held only because of fears regarding their LTTE sympathies.

Recent reports have also claimed that infectious diseases including meningitis, encephalitis and hepatitis are rampant within the camps and that mortality rates among the IDPs are extremely high with SLFP(M) Wing Leader Mangala Samaraweera claiming that hundreds of IDPs were dying every week.

The admission that resettlement will take longer than originally planned will only add to the pressure on the government and bring issues of legality sharply into focus. However in his statement Bogollagama claimed that 60% of the detainees would be re-housed within the original 180 day time frame.