Sri Lanka seeks investors for loss-making Mattala airport built with Chinese loans

Colombo: Sri Lanka's government issued a call on Sunday for investments in a currently loss-making airport, after a 30-year lease agreement with an Indo-Russian joint venture had failed to take off.

Mattala Rajapaksa International Airport, built with Chinese loans near a wildlife sanctuary on the island's southern coast, has no regular flights.

The small airport has failed to generate enough revenue to cover even electricity bills since opening in 2013, and has been a running sore on state coffers.


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Calling for expressions of interest from investors, the government said the facility offers "untapped potential for growth opportunities... for exotic tourism development and strategic investment".

Two years ago, the Sri Lankan government announced it had awarded a 30-year lease to a joint venture between India's Shaurya Aeronautics and Russia's Airports of Regions Management Company, but the plan never materialised.

The airport is named after former president Mahinda Rajapaksa, who borrowed heavily from China for infrastructure projects that quickly became commercial failures.

Debts to China are partly blamed for an unprecedented financial crisis that prompted Sri Lanka to default on its $46 billion foreign debt in 2022.

Since receiving an International Monetary Fund bailout early the following year, Sri Lanka has sought to privatise a host of unprofitable state-owned enterprises, with no success.

The Mattala airport is located on a migratory bird route, with several aircraft forced to ground after striking airborne fowl.

At one point, Sri Lanka's military deployed hundreds of troops to remove deer, wild buffalo and elephants from the runway so operations could continue.

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The airport is regarded as an alternate destination in case of bad weather at the country's main international gateway in the capital Colombo, a half-hour flight away.

Several cargo carriers and some charter aircraft operate via Mattala, but the revenue is insufficient for the facility's upkeep, according to official reports.

In 2017, unable to repay a large Chinese loan, Sri Lanka allowed China Merchants Port Holdings to take over the Hambantota port, near Mattala.

The deal, which granted the Chinese company a 99-year lease, fuelled fears over Beijing's use of "debt traps" to exert influence.