Sri Lankan government 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 Indian airport operator, according to a media report today.

Dubbed as the "world's emptiest airport" due to lack of flights, the MRIA was built with high interest commercial loans from China by the Mahinda Rajapaksha government. 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 Mattala Rajapaksha International Airport (MRIA) at Humbantota, about 241km south-east of Colombo, through a joint venture with the Airports Authority of India (AAI).


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the MRIA are continuing between India and Sri Lanka, at no point during the negotiations with India was the proposal withdrawn or denied despite what the media reported, it said, quoting an unnamed official.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

The AAI is to enter a deal with Sri Lanka Civil Aviation Authority to run the MRIA, named after Rajapaksa in his home district. The AAI is to have a 70 per cent stake while Sri Lanka's CAA will invest 30 per cent, parliament was told.

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