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.