The Government will hand over the management of the US$ 209 million Chinese-built Mattala Mahinda Rajapaksa International Airport (MRIA, IATA code HRI) to two Indian and Russian companies, according to a Cabinet statement issued on Friday. This is welcome news, given the airport’s reputation for making huge losses.
The airport’s management will be handed over to Shaurya Aeronautics (Pvt) Ltd. of India and Airports of Regions Management Company of Russia for 30 years, the Cabinet statement said. This is part of the Government’s attempts to reduce losses from its State-Owned Enterprises (SOEs).
The MRIA was an ego-driven project, for which there was no demand and no rationale. Yes, Sri Lanka needed a second international airport, but Jaffna was definitely the best choice, followed by Ratmalana, which sorely needs a huge expansion to make it Colombo’s second airport. It was clear from the beginning that no international airlines would call at Mattala, which is in the middle of nowhere. True to form, Mattala has since been described as the world’s emptiest and most silent airport. Many countries from India to Spain have such ‘ghost’ airports, but Mattala takes the cake even from among them. Besides, Mattala is an environmentally sensitive area. It is also unfathomable why the aviation authorities decided on an all-new airport in Mattala, when an airfield already existed in Weerawila, just 30 Km away. Expanding it would have been a better solution.
But the Government cannot definitely close down Mattala now, as it would then lose whatever revenue it now makes. The best answer would be better management. We should pitch this airport especially to Charter and Leisure carriers, which can directly ferry passengers to the Southern Province, where most “sun and fun” tourists go anyway. It should also be developed as a MRO (Maintenance, Repair and Overhaul) destination for regional airlines and as a flight training centre. Although equally derided in its earlier stages, the Hambantota Port has more or less earned its keep as a car transshipment hub, under Chinese management.
With Mattala out of the way, the Government should next focus on what should have been done in the first place – develop Jaffna as a fully-fledged international airport with a runway length of 2,000-3,000 m which can accommodate larger airframes such as Airbus A321. Right now, it can only accommodate turboprops such as the ATR 72, which is indeed used by India’s State-owned Alliance Air for its Chennai-Jaffna flights. But if larger jets can be accomodated, international airlines will be willing to start flights to Jaffna from cities such as Singapore, Kuala Lumpur and Dubai. Likewise, there is no doubt that Ratmalana should be extended – there was talk of building an underpass for diverting the traffic on Galle Road if the runway is extended. These plans should be revived, if foreign assistance can be obtained for the project.
But renovating or building new airports would be useless without reviving our national carrier SriLankan Airlines which is bleeding the country red. Delays and breakdowns are the order of the day, since most of the Airbus A330 planes are very old and pilots too are in short supply. In this context, it is heartening to note that six contenders are in the running to take over SriLankan, including at least a couple of entities from the airline business itself. The process is expected to be wrapped up in September this year. Whichever applicant gets the final nod, replacing the older planes in the fleet and fulfilling manpower requirements should be a priority. SriLankan used to make profits back in the days when Emirates was its strategic partner – there is no doubt that such glory days can be revived in the near future. Sri Lankan aviation authorities should also study what Tata is doing with privatized Air India, given the past similarities between the two airlines.
This is also the time to take a long, hard look at other ‘white elephant’ projects in Sri Lanka, regardless of the Governments that commissioned those projects. It is these unproductive loans that are holding us back from going further. The sooner such projects are divested the better it will be for the economy and the people.
SOE divestiture may be a hot topic, but it is one that cannot be avoided. The public, already burdened by the high Cost of Living, cannot afford to sustain and subsidise these giant SOEs that have spiraled out of control. Sometimes divestiture might not even be the ideal solution – the selection of three foreign companies for retail petroleum distribution in addition to the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC) has addressed the problems in this sector to a great extent. In fact, the much anticipated return of petrochemical giant Shell, via R.M. Parks of USA, to the Sri Lankan fuel market after a lapse of 60 years is a good omen for the sector. As we have mentioned in these columns earlier, all such foreign entrants must be encouraged to install electric car charging points at their filling stations.
At the end of the day, the Government should engage in only one business – the business of governing the country. All other sectors of the economy should be in private hands. That is the only path to a more sustainable, more robust economy.
