Was presidential VIP kit an inducement for hefty Airbus deal?
The Sunday Times first exclusively reported in October 2014 that SriLankan had commissioned a “VIP conversion kit” for one of its new A330-300 aircraft so that then President Mahinda Rajapaksa and his inner circle could travel abroad in comfort.
It is now in question whether this was also an inducement for the hefty aircraft deal the country awarded Airbus at the expense of its national carrier. The kit allows transformation of the forward commercial passenger area into a spacious VIP section. At the time, officials--including the service provider--refused to divulge details, including cost.
The conversion kit is produced and installed by the Airbus Corporate Jet Centre (ACJC). And its Marketing Director told the Sunday Times at the time their customers “ask for discretion”.
The National Audit Office (NAO) in a special report on
SriLankan Airlines re-fleeting said a paragraph in a Cabinet memorandum dated March 27, 2013, indicated that the VIP kit might have been one factor in choosing Airbus over Boeing.
When Airbus and SriLankan signed in June 2013 for purchase of six A330-300s, a separate agreement was entered into for VIP cabins in addition to the above.
SriLankan agreed to receive two A330-300s to be delivered in October and December 2014 as VIP aircraft. There would be one VIP cabin set to fix in these two aircraft, the NAO states. These planes feature a VIP section at the front of the cabin, and airline- style seating at the rear. The kit was to include a bedroom with two beds, office and conference area.
The VIP kit was directly tied to the aircraft purchases. The agreement states that, where SriLankan refrains from buying at least one A350-900, Airbus shall have the sole right to revoke the deal.
Under a revision to the contract in December 2013, SriLankan agreed to purchase a secondary VIP kit in addition to the principal VIP kit. The financial cost for designing VIP kit in respect of first aircraft was US$ 7.5 million and US$ 7.5 million for second aircraft.
It was agreed that US$ 0.5mn will be paid as pre-delivery payment by SriLankan as soon as the agreement is signed, followed by US$ 2mn and US$ 4.75mn in January and December 2014. These pre-delivery payments were settled by a credit note to the value of US$ 15 million.
The agreement entered into for the VIP kits was revoked in February 2015. Under a written request by SriLankan, the credit note to the value of US$ 15 million granted by Airbus for the kits was totally used.