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Treasury to settle Mihin’s loan

The country’s low cost carrier Mihin Lanka has made a whopping Rs. 12 billion loss over the three years it has been in operation, with company officials claiming that a 2.4 billion loan is to be settled by the Treasury

Ceylontoday, 2011-11-29 01:00:00
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Treasury to settle Mihin’s loan

By Dharisha Bastians


The country’s low cost carrier Mihin Lanka has made a whopping Rs. 12 billion loss over the three years it has been in operation, with company officials claiming that a 2.4 billion loan is to be settled by the Treasury.


The Parliamentary Committee on Public Enterprises (COPE) which is due to table its first report in Parliament on Thursday (01) has listed the doomed budget carrier as one of 74 loss making State institutions evaluated by the Committee.

The Committee headed by D.E.W. Gunesekera has published its report on 249 State institutions
A copy of the COPE report as yet un-tabled, has been obtained by Ceylon Today and states that Mihin Lanka’s CAO has countered that the company had made Rs 16 million operational profit in the last six months of 2010.

However the losses since Mihin Lanka’s incorporation have been in several billions and steadily on the increase over the years. The COPE has also found that the figures furnished by Mihin Lanka are different from those provided by the Auditor General’s Department and that the “evidence submitted is insufficient”. 

During its evaluation COPE also found that Mihin Lanka had liabilities to the tune of Rs 2.4 billion, to which, the report says, the Company’s CAO responded that the loan would be “settled by the Treasury.”


COPE has directed Mihin Lanka officials to submit information about Capital Input, Profit and Loss statements and number of passengers carried, to the committee within one month.


COPE evaluated Mihin Lanka on December 7, 2010.


The government recently announced plans to merge the national carrier SriLankan Airlines and Mihin Lanka in a bid to make both airlines more efficient. However, the Civil Aviation Ministry yesterday sought a USD 500 million budgetary allocation for the period of three years to float the cash strapped Sri Lankan airlines which made a loss of Rs. 2.6 billion last year.


The Civil Aviation Ministry yesterday sought an allocation of US$500 million from the budget over a period of three years for the airline which recorded a loss of Rs.2.6 billion last year. The Ministry also asked for US$20 million each over a period of three years to meet the financial requirements of Mihin Lanka.

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