• Insurance cover for Emirates against threats from UNP
• Auspicious Times
• COPE summons Clarke, Harry
• Politicos flee
• CBK: 'don't take too much at Madiwela'
• Checks to be humane, sensitive
• LTTE for third party talks

Insurance cover for Emirates against threats from UNP

Sri Lanka will have to pay massive premium

By Frederica Jansz

An Opposition threat to abrogate the Airlanka-Emirates deal when it comes to office has prompted the Government to seek international guarantees to allay fears of the Gulf carrier.

In the absence of a bilateral Investment Protection Agreement that would have obviated the need, the Government has approached the Multilateral Insurance Guarantee Agency (MIGA). It wants MIGA to offer a guarantee to Emirates Airlines that if a change of Government occurs in Sri Lanka, 90 per cent of its shares in the partnership will be assured. The MIGA guarantee, now being negotiated, would mean the Government will have to pay a regular premium for the insurance cover it will obtain from the international insurance agency. Though an amount has not yet been determined, the figure is expected to be very high, according to aviation circles. The new move came as the opposition United National Party declared it has assigned a group of experts to study the intricacies of this deal and place its findings before the public. A UNP statement charged that "unlike the past corruption scandals of this Government, the so-called Air Lanka restructuring marks the graduation of Sri Lanka into a fully fledged kleptocracy." But, Mano Tittawela, the Director General of the Public Enterprises Reform Commission, defended the Government action.

PERC Chief Mano Tittawella, a key and controversial figure in the negotiations told The Sunday Times that while the deal might not be perfect, it should be viewed in the overall national context.

Mr. Tittawella, facing possible breach of privilege charges in Parliament, denied that he had misled any committee or acted untruthfully. Mr. Tittawella and other PERC officials who were summoned before the parliamentary Committee of Public Enterprise (COPE) on Thursday said they had answered all questions to the best of their ability. This came after some members of the committee alleged that the PERC officials were evasive or untruthful in their testimony.

COPE chairman deputy minister Reggie Ranatunga told The Sunday Times he was satisfied with the explanations given by PERC. But senior UNP member of COPE, former minister John Amaratunga was not satisfied. He said he still had doubts whether the deal would be in the highest national interest while he also challenged the secrecy clauses which they put forward. Mr. Amaratunga said the PERC Act had no secrecy clauses and its officials were bound to give all information to parliament and to the country.

Section 18 of the PERC Act stipulates that all documentary evidence pertaining to any given transaction should be immediately tabled before Parliament no sooner transactions are complete, he pointed out. Mr. Tittawella in response said all documentation relating to the divestiture of Airlanka would be placed before parliament by Thursday.

Mr. Tittawella said he had received specific instructions from President Chandrika Bandaranaike Kumaratunga, not to divulge any details of the negotiations between PERC and Emirates until the deal was finalized.

According to protection clauses in the agreement, Emirates Airlines cannot use Airlanka flight routes, parking slots or any other rights. Emirates cannot take any action that will directly or indirectly affect AirLanka and benefit Emirates. No services of any employees of AirLanka can be terminated and at the very minimum all given benefits to the employees, at the time of divestiture will be maintained by Emirates.

The agreement provides that the present system of procurement for AirLanka will continue without any changes and will only be altered in the future if approved by the Board of Airlanka.

Emirates will not be allowed to divest more than 10% of its present 40% equity in Airlanka within the 10 year period. This means in the event of AirLanka being made a public enterprise, Emirates cannot divest more than 10% of its present share holding in AirLanka. The deal; also stipulates that 51% of the shares of AirLanka will at all times be owned either by the government or Sri Lankan nationals. At no point can the majority holdings of Airlanka be divested to a foreign investor. AirLanka's present rights and privileges are guaranteed for a minimum of six years.

Clause 8.1 in the agreement states that the partnership is subject to aviation policy and the Director General of Civil Aviation (DGCA). Ultimately it will be the DGCA who will be the final authority on all bilateral agreements. This means that it will be only the DGCA who can decide who should be given air traffic licenses etc.

The shareholding structure of AirLanka cannot be changed nor can the company raise funds without the majority approval of the Board. The nature of the business is not subject to change, neither can AirLanka enter to any other partnership without Board approval.

While the day to day management of Airlanka will be handled by Emirates, it will be strictly within the parameters of a business and management plan that has already received approval.

The profitability of AirLanka will need sound management which will be constantly reviewed by the Board of Airlanka, the agreement states. Any violation of this agreement can be taken to international arbitration in Singapore.

All profits made will be allocated to AirLanka with Emirates taking the dividends. The agreement further states that the balance payment of US$ 25 million has to be made to the government of Sri Lanka before December 31 in the year 2000.

COPE summons Clarke, Harry

AirLanka's new Managing director and Emirates boss Tim Clarke along with AirLanka Chairman Harry Jayawardena and other directors will be summoned before a parliamentary committee soon to testify regarding the recent deal.

COPE chairman Reggie Ranatunga said the entire board of AirLanka would be questioned before April 30.

But Emirates Chief Commercial Officer Peter Hill said that neither he nor any other Emirates officials on the board of AirLanka had yet received any official intimation to appear before COPE.

Meanwhile an angry Aviation Minister Dharmasiri Senanayake has objected to the way in which PERC officials had been questioned by COPE and has asked that committee proceeding on this matter be suspended until a ruling is given by the Speaker. But Mr. Ranatunga said he could not suspend proceedings at the request of a minister.

He said COPE included opposition MPs too and thus it was not easy to handle committee proceedings.

Mr. Senanayake has charged that a 'reporter' on COPE had leaked information and even recordings to the media and this was a breach of confidentiality.

But COPE member John Amaratunga has accused Minister Senanayake of interfering and trying to stifle the work of a parliamentary committee. He said the minister would be reported to the Speaker for interfering when parliament meets on April 21.

Politicos flee

Many political leaders have left the country or are preparing to take wing soon amidst astrological warnings that planetary changes during the New Year may have ill-effects.

It is learnt that President Chandrika Kumaratunga is expected to be away in London and then go to Switzerland. Opposition leader Ranil Wickremesinghe left for China on Friday night and will then go to India.

Foreign Minister Lakshman Kadirgamar left for an undisclosed destination on Wednesday. His cabinet colleagues Ratnasiri Wickramanayake and D.M. Jayaratne will be taking wing to Australia, where they are supposed to raise loans for some projects.

UNP General Secretary Gamini Atukorale is also due to leave on a private visit on Wednesday.

Other Ministers due to leave are G.L. Peiris, Nimal Siripala de Silva and S.B Dissanayake. Some deputy ministers and other politicians too have left the country or will be leaving soon.

Several Tamil MPs including PLOTE Leader D. Siddarthan and EPDP Leader Douglas Devananda have also left the country. The vital planetary change is to take place on April 17 (next Friday) when Saturn transits to the Zodiac sign. Many politicians have been advised to be in seclusion at the time. (Please also see political column on page 8)

CBK: 'don't take too much at Madiwela'

By Chamintha Thilakarathna.

President Chandrika Bandaranaike Kumaratunga has directed officials to minimise the take over of land belonging to residents of Madiwela in building a presidential complex in the area, The Sunday Times learns.

The directive was given at a meeting with Housing and Urban Development Minister Indika Gunawardene along with officials of the UDA and other bodies.

Meanwhile the UDA has sent the project proposal to the Central Environmental Authority for approval. Environmentalists have warned that the bird sanctuary in the area and the green belt might be affected by the project. NGOs have warned that if the project is found to be harmful to the environment they would come out in protest irrespective of whether the complex is for the president or any one else.

Checks to be humane, sensitive

Government will next week set out specific guidelines for security forces and police over the arrest of terrorist suspects.

Attorney General Sarath Silva will spell out the details during a meeting with security forces and Police top brass on April 23. Representatives of Tamil political parties, social and religious organisations have also been invited for the meeting.

A Justice Ministry official told The Sunday Times the new guidelines would be on a method where arrests will be carried out on reasonable suspicion and based on information.

He said the present system of rounding up large numbers of suspects has been both ineffective and counterproductive.

The new move follows a meeting representatives of the TULF, EPDP, and Hindu organisations held with the Attorney General on April 3.

They placed a three point request:-

(1) Any arrest and detention to be strictly according to law.

(2) Presidential directives and provisions relating to fundamental rights be observed and

(3) arrests and detentions must be done in humane and sensitive manner.

Tamil parties and human rights groups have in recent weeks strongly protested against what they see as alleged accesses, inhuman and degrading treatment of Tamil civilians and even Hindu priests through indiscriminate arrests and detention. Some have asked whether it is a fearful concept of holding all Tamils collectively responsible for crimes of some terrorist.

LTTE for third party talks

By S.S. Selvanayagam

The LTTE has told Jaffna's Catholic Bishop it is ready to negotiate a solution to the ethnic conflict through third party mediation but the government must take the initiative, a Jaffna newpaper reported.

The Jaffna-based Tamil daily Udayan said Bishop Thomas Saundaranayagam during a pre-Easter pastoral visit to uncleared areas in the northern Wanni district met several LTTE leaders for extensive discussions on humanitarian, social and political issues.

Among those who met the Bishop were LTTE theoretician Anton Balasingham, political wing leader Thamilchelvan, Vithuran and Sutha.

The LTTE leaders refused to accept the government's devolution package as a basis for talks, pointing out that even the two main political parties in the south — the PA and the UNP were at odds on the package, the newspaper said.

The LTTE leaders said recent developments in India — the advent of the BJP-led coalition — were a welcome change and they look forward to co-operation towards a solution for the grievances of the Tamil people.