India keen to run Mattala airport | Sunday Observer

India keen to run Mattala airport

India has expressed interest in operating Sri Lanka’s second international airport in Mattala, about 40 km from the southern town of Hambantota, where China has a majority stake in a strategic port it built, The Hindu newspaper reported.

The government earlier last week cleared Civil Aviation Minister Nimal Siripala de Silva’s request for a committee to study the Indian government’s proposal.

India proposes to ‘operate, manage, maintain and develop’ the airport through a joint venture, holding 70% of the equity for 40 years. According to the Minister’s Cabinet paper, India is to invest $205 million in the venture, while Sri Lanka would pitch in the balance $88 million, according to The Hindu.

“The development comes less than a fortnight after Sri Lanka signed a $1.1 billion deal with China, giving the State-run China Merchants Port Holdings a 70% stake in a joint venture to run the port. Colombo also roped in China to help develop an industrial zone in the adjoining land, spanning some 15,000 acres.

“The airport was built with a $190 million loan from the Exim Bank of China, during the Rajapaksa regime. Opened in 2013, the airport has proved to be a major financial strain, with barely two daily flights. As operational losses persisted, Sri Lanka in December 2016 sought expressions of interest to operate the airport through a public-private partnership.

The government received eight proposals, but the recent Cabinet committee has been asked to evaluate India’s proposal alone,” The Hindu reported.