Lankan govenment reworking MoU on airport deal with India

The Sri Lankan government is reworking on the draft of a memorandum of understanding to hand over the management of Mattala Rajapaksha International Airport at Hambantota to an Indian airport operator, according to a media report today.

Built with high interest commercial loans from China by the Mahinda Rajapaksha government, the MRIA is dubbed as the “world’s emptiest airport” due to lack of flights. It was officially opened in March 2013 and the only international flight operating from there was halted in May.

The Sri Lanka government had announced that it will go ahead with the deal with India to jointly operate the USD 210 million MRIA at Humbantota, about 241km south-east of Colombo, through a joint venture with the Airports Authority of India (AAI).

The government had last month asked the Indian airport operator to submit its business plan for operating the loss-making airport.

A draft MoU on handing over of the MRIA to the Airports Authority of India (AAI) was recently presented before the Sri Lankan Cabinet and is now being reworked at the Indian government’s request, the Sunday Times reported.

The talks for management control of the MRIA are continuing between India and Sri Lanka, at no point during the negotiations with India was the proposal withdrawn or denied despite what the media reported, it said, quoting an unnamed official.

“The Sri Lankan government’s terms only allow for management control of the commercial activities of the airport while ownership and statutory functions including air traffic control and air traffic rights will be under the control of Sri Lankan authorities,” said another official.

Mattala airport, named after former president Mahinda Rajapaksa, was one of the major infrastructure projects of Rajapaksa’s nearly a decade-long rule. The airport has the capacity to handle one million passengers a year and is expected to handle five million passengers, 50,000 tonnes of cargo and 6,250 air traffic operations per annum by 2028.

The government in 2017 invited investors to turn the airport into a profit-sharing joint venture. However, no proposals were received to operate, manage and maintain it.

Sri Lankan Civil Aviation Minister Nimal Siripala de Silva had said that only India had offered to help, now discussion were on with the Indians for the joint venture.

The AAI is to enter a deal with Sri Lanka Civil Aviation Authority to run the MRIA. The AAI is to have a 70 per cent stake while Sri Lanka’s CAA will invest 30 per cent, de Silva had said in the parliament.

The private-public-partnership will allow AAI to enter into a 40-year lease agreement to take up the management control of the airport.