COLOMBO, April 26 (The reporter) – Sri Lanka will hand over the management of its $209 million Chinese-built airport to two Indian and Russian companies, according to a cabinet statement released on Friday. This move is part of Sri Lanka’s efforts to mitigate losses incurred by state enterprises.
The Mattala Rajapaksa International Airport (MRIA), constructed with funding from China EXIM Bank, has faced criticism since its inauguration in 2013 due to a limited number of flights, its environmentally sensitive location, and ongoing financial deficits.
The airport’s management will be entrusted to Shaurya Aeronautics (Pvt) Ltd. of India and Airports of Regions Management Company of Russia for a period of 30 years, the cabinet statement specified, although it did not disclose the financial terms of the arrangement.
Sri Lanka is presently in discussions with China EXIM Bank to restructure the airport loan, which is part of a larger $4.2 billion debt for various infrastructure ventures.
The airport was constructed during the tenure of former president Mahinda Rajapaksa, who cultivated closer ties with China at the expense of relations with neighboring India. Significantly, the airport is located in Rajapaksa’s hometown.
After its foreign exchange reserves plummeted to unprecedented lows in May 2022, Sri Lanka defaulted on its foreign debt, sparking its most severe financial crisis in over seven decades.
Sri Lanka is striving to mitigate the losses of numerous state-owned enterprises following a $2.9 billion bailout from the International Monetary Fund (IMF). This assistance has aided in stabilizing the economy and is projected to pave the way for a return to growth in 2024 after a two-year downturn.
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