Sri Lanka Working on Draft MoU to Handover Airport Operations to India | CORPORATE ETHOS

Sri Lanka Working on Draft MoU to Handover Airport Operations to India

By: | August 7, 2018
Mattala Rajapaksha International Airport

Aug 7: The Sri Lankan government is reworking on the draft of a memorandum of understanding regarding the handing over of operations of the Mattala Rajapaksha International Airport (MRIA) as requested by the Indian government. The MoU is being drafted to hand over the operation of the loss-making airport to the Airports Authority of India (AAI).

Sir Lanka had earlier announced that it would proceed with a deal with India to jointly operate the MRIA at Humbantota, situated at around 240 kms from Colombo. The government is planning to form a joint venture with Airports Authority of India to handle the operations of the MRIA, which is also dubbed the world’s emptiest airport.

The Indian operator was asked to present the business plan for operating the airport last month, following which a draft MoU was presented before the Sri Lankan Cabinet. Talks for management control for the airport are still continuing between the two nations, although it was previously reported that the proposal was withdrawn.

According to the terms of Sri Lankan government, only commercial activities can be controlled by the management, while ownership and other statutory functions like air traffic control and air traffic rights will remain with Sri Lankan authorities.

Sri Lankan Civil Aviation Minister Nimal Siripala de Silva had said in the country’s Parliament that the proposed deal would hand over a stake of 70% to AAI, while the remaining 30% will be invested by Sri Lanka’s Civil Aviation Authority (CAA). The private-public-partnership will see AAI entering into a 40-year lease agreement for operating the airport.

MRIA was officially opened in March 2013 after completing the project under high interest commercial loans from China. The airport was built with an aim to transform Humbantota, which was also the hometown of then President Mahindra Rajapakshe, into a tourism hub along with cricket stadium and sea port. With a capacity to handle one million passengers annually, the airport was built with an aim of handling five million passengers 50,000 tonnes of cargo and 6,250 air traffic operations per annum by 2028.

MRIA however failed to make profit due to lesser operations from carriers, who found the airport to be attracting lesser passengers. The airport gradually saw the halt of operations from the then existing carriers. The lack of services also caused the airport to be dubbed the world’s emptiest airport. The last international flight operating from the airport halted its operations during May this year.