The controversial budget airline launched during the previous Mahinda Rajapaksa administration, Mihin Lanka’s financial liabilities are set for discussion this week, according to Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku.
He confirmed that the Government was prioritising preparations for the upcoming tourism season over addressing the unresolved status of Mihin Lanka.
Speaking to The Sunday Morning, Kodithuwakku said that while Mihin Lanka’s financial liabilities remained an issue, the immediate focus was on meeting the demands of the tourism market.
Mihin Lanka, established in 2007 and ceasing operations on 30 October 2016, still carries significant debt related to its winding-up process.
According to the Mid-Year Fiscal Position Report of the Ministry of Finance, as of 30 June, letters of comfort amounting to Rs. 3,201.77 million remain outstanding under Mihin Lanka Ltd.
“The Mihin Lanka issue is a lingering one, but with the new tourism season commencing, our priority is ensuring that the airport and hangar facilities can handle the anticipated influx of tourists. We must focus on developing infrastructure and ensuring adequate flight arrangements to meet tourism demands,” Kodithuwakku stated.
The situation surrounding Mihin Lanka is part of a broader narrative of financial mismanagement in Sri Lanka’s aviation sector.
Under the previous administration of President Mahinda Rajapaksa, significant decisions were made to overhaul SriLankan Airlines, including an ambitious re-fleeting plan to purchase brand-new aircraft at a cost of $ 2.3 billion, despite the availability of more affordable options. A report by the Weliamuna Commission had called for criminal investigations into the re-fleeting process.
The Board of Inquiry has further uncovered evidence of fraudulent activity, including the falsification of documents to lease luxury vehicles for the personal use of high officials.
A failed air taxi service initiative that led to millions of dollars in losses is among the larger issues uncovered. The investigation also highlighted a pattern of ignoring conflicts of interest among advisors hired to manage procurement processes, fuelling suspicions of corrupt dealings.
The Deputy Minister did not dismiss the matter entirely, indicating that the Ministry of Ports and Civil Aviation intended to deliberate on Mihin Lanka’s future in the coming week.