New Delhi: The management of Sri Lanka’s Mattala Rajapaksa International Airport in Hambantota, once dubbed the “world’s emptiest airport”, has been awarded to a joint venture between an Indian and a Russian firm.
Earlier in January, the Sri Lankan cabinet approved the initiation of an Expression of Interest from interested parties. The Expression of Interest received five proposals and the Cabinet appointed Consultative Committee decided to award a management contract of 30 years to Shaurya Aeronautics (Pvt) Ltd of India and Airports of Regions Management Company of Russia.
The Mattala Airport was once dubbed as “The World’s Emptiest International Airport” by Forbes magazine due to an extremely low number of flights despite its large size. It was named after former President Mahinda Rajapaksa and was one of the biggest infrastructure projects of the former president’s nearly decade-long rule.
While initially the airport saw many airlines flying through the airport, including SriLankan Airlines, with time nearly all airlines deserted the airport and by around 2018 it was left deserted.
The project of the Mattala Airport was controversial from the start. From being seen as a personal endeavour of vanity by then-President to accusations of encroaching the natural habitat of elephants, the airport has always been a questionable initiative.
Another major problem that perhaps was not carefully attested initially by the Sri Lankan government was the high-interest Chinese commercial loans that were taken to build the airport.
It was built at a cost of USD 209 million, with USD 190 million coming from a high-interest loan from the Exim Bank of China.
When the airport did not succeed, problems for the Sri Lankan government only exacerbated. The dwindling economy of the nation only made matters worse. As a result of this, as early as 2016, the Sri Lankan government has been looking for commercial partners to manage the heavy loss-making airport.
The ongoing economic problems in Sri Lanka, which peaked in 2022, are due to years of economic mismanagement in the country.
The country’s foreign currency reserves plummeted an unprecedented 99 per cent from 2019 to 2022. This led to a decrease in the purchasing ability of imports and drove up domestic prices for goods. This led to massive protests in the country but the problem was long in the making and has still not subsided.
After decades of civil war, in 2009, the Sri Lankan government turned its focus to domestic production. However, a stress on local production and sales, increased the reliance on foreign goods.
Later severe cuts on income tax led to losses in government revenues in a country also short of cash. This problem was exacerbated when the COVID-19 pandemic hit, halting tourism in the country, one of its biggest cash makers.
The situation after that only deteriorated and Sri Lanka’s dependence on foreign loans and imports only increased and its own reserves only decreased.
It was finally in 2022 that after massive nationwide protests a change of government was introduced. Prime Minister Mahinda Rajapaksa, brother of President Rajapaksa, stepped down and was replaced with former PM, Ranil Wickremesinghe.
Things can be seen to change a little from 2023 when the IMF approved Sri Lanka’s request for a USD $2.9 billion bailout. A four-year program to restore the country’s economy has also been introduced and is currently in action. IMF, after an initial round of checks, deemed that Sri Lanka had made “satisfactory” progress and released a second batch of USD $337 million to Sri Lanka.
These changes in the economic state of the country have also resulted in Sri Lanka making changes in its foreign relations. While the earlier dispensation of Rajapaksa was thought to be more close to China, the current Wickremesinghe government has been playing its cards more judiciously. It has tried to court India and the West while continuing the country’s already heavy economic engagements with China.
India has been both historically and even today an ally and supporter of Sri Lanka. During the country’s 2022 economic crisis, India reportedly provided Sri Lanka with economic and humanitarian assistance of over US$4.5 billion. One of the most significant of such initiatives has been Trincomalee energy-hub development, port development and oil refinery.
India has also introduced its Unified Payment Interface (UPI) system in Sri Lanka. Thus while China is still Sri Lanka’s largest bilateral creditor, its relations with India are improving with time and the current decision of the Sri Lankan government to approve the joint-management of Mattala Rajapaksa International Airport to India is another step in this.
Improving ties while ceding help: India to jointly manage Sri Lanka's Mattala International Airport
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27.04.2024
New Delhi: The management of Sri Lanka’s Mattala Rajapaksa International Airport in Hambantota, once dubbed the “world’s emptiest airport”, has been awarded to a joint venture between an Indian and a Russian firm.
Earlier in January, the Sri Lankan cabinet approved the initiation of an Expression of Interest from interested parties. The Expression of Interest received five proposals and the Cabinet appointed Consultative Committee decided to award a management contract of 30 years to Shaurya Aeronautics (Pvt) Ltd of India and Airports of Regions Management Company of Russia.
The Mattala Airport was once dubbed as “The World’s Emptiest International Airport” by Forbes magazine due to an extremely low number of flights despite its large size. It was named after former President Mahinda Rajapaksa and was one of the biggest infrastructure projects of the former president’s nearly decade-long rule.
While initially the airport saw many airlines flying through the airport, including SriLankan Airlines, with time nearly all airlines deserted the airport and by around 2018 it was left deserted.
The project of the Mattala Airport was controversial from the........
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