sajin vass to resign from "Mihin Lanka"

CEO of Mihin Lanka Sajin Vaas Gunawardena will resign from his post at the end of this month to pave the way for a tie up with SriLankan Airlines and his brother Manoj Vaas Gunawardena to take over as CEO of the national carrier.

The Sunday Leader learns Sajin Vaas Gunawardena will continue to serve in the board of Mihin Lanka while Manoj Vaas Gunawardena will assume the CEO post of SriLankan Airlines from next month.

It is learned that Aviation Minister Chamal Rajapakse will forward to cabinet a memorandum outlining the proposed tie up between SriLankan and Mihin.

Sajin Vaas Gunawardena last Friday posed for a photograph with his staff and announced his resignation as CEO, but said he would continue as a board member.

A source at Mihin Lanka said Sajin's resignation will only be on paper and he would continue to be in charge from behind the scenes. The source said the resignation was aimed at muting a conflict of interest that the two brothers were both CEOs of government owned airlines.

Sajin after attending a meeting Friday with his board members and senior managerial staff, took a group photo after which he announced that he would resign by end of the month.

He had also announced that someone better would take over as CEO of Mihin and that he would still be on the board.

Minister Rajapakse has already signed a memorandum to be presented to cabinet outlining the commercial agreement Mihin is to sign with SriLankan. The memorandum was to be presented at last week's cabinet meeting, but the cabinet did not meet.

According to the cabinet memorandum SriLankan Airlines and Mihin will have a close working relationship in which Mihin will operate the routes that are more profitable to a budget airline while SriLankan will continue to develop its already established routes.

The memorandum also states that the government has recognised that there are structural and managerial deficiencies in Mihin and has attributed Mihin's failure to return an operational profit to structural and managerial deficiencies and not to any problems with capacity or the number of passengers.

Mihin has regained control of its aircraft after receiving an additional Rs. 250 million from the Treasury, wrangled out in a hurry after an incident in Bombay where one of the aircraft was grounded following an emergency landing and passengers were delayed for as much as six hours.

Speculation is rife that Lalith Silva, already a director of SriLankan may be appointed CEO of Mihin. In fact sources say President Mahinda Rajapakse had earlier wanted Silva to take over as CEO of SriLankan but he had turned down the offer.

Silva was formerly a director of Mobitel, in which Australian telecom giant Telestra had shares. Silva was apparently a key figure in negotiating Telestra's departure from the state-owned mobile telecom company, ultimately being appointed as CEO of Mobitel. Government sources say that they hope that Silva could perform a similar feat with Emirates. He is a Ministry favourite as they feel he has 'integrity and highly valued financial probity' sources say.

India Oil wants to market aviation fuel in Sri Lanka

Having stabilised operations to retail transport fuels in Sri Lanka, the Lanka Indian Oil Corp, a subsidiary of India's state-run oil company, will ask for Colombo's permission to market aviation fuel.

"We are applying to the government to participate in the aviation fuel marketing and we are ready to develop infrastructure facilities for it," the managing director of Lanka Indian Oil Corp, K Ramakrishnan, said.

He said that Lanka IOC had offered to build its storage facilities and supply aviation fuel at the Katunayake international airport near here or the new airport at Weerawila, some 300 km away.

At the moment, the state-owned Ceylon Petroleum Corp (CPC) has a monopoly in marketing aviation fuel in this island nation.

"In the event of the government granting us the permission, we will augment CPC in the marketing of aviation fuel. But keeping it as a monopoly may not be desirable for a growing economy like Sri Lanka," Ramakrishnan said.

"We are hopeful that we will get permission to develop infrastructure and import aviation fuel to Colombo and Trincomalee ports and do the marketing," he said, adding they were also seeking to expand the retail outlets to 324 from 152.

The company, a subsidiary of the Indian Oil Corp, in Sri Lanka, was incorporated to retail petroleum products, bulk supplies to industrial consumers and also to build and operate storage facilities at the Trincomalee.

Ramakrishnan said that the government of Sri Lanka would also be approached for another fuel price increase in the near future because global oil prices had shot up further. He, nevertheless, said the company was making impressive profits.

He said the company was expected to log a turnover of around $400 million for the year ended March 31. "This will prove Lanka IOC is the number one company in terms of turnover among private enterprises in Sri Lanka."

Lanka IOC imports petroleum products in two ports at Colombo and Trincomalee and keeps stocks ay both places. In November last year, it commissioned a $5 million lube oil blending plant with the capacity of 18,000 tonnes a year.

"Even at the beginning stage we are doing pretty well in this plant and blending some 300,000 litres of lubricants a month. We have larger plans for Trincomalee oil tank farm which has 850 acres of land with a very good jetty nearby."