India-Russia Consortium To Get Sri Lanka’s Mattala Airport; Deal Details Here

New Delhi: In a big win for the Indian diplomacy, Sri Lanka has handed over the loss-making Mattala International Airport in Hambantota to a joint India-Russia venture “during the next few weeks” to run, Minister of Aviation Nimal Siripala de Silva said here on Wednesday. The India-Russia joint venture was awarded the management of the Mattala International Airport in Hambantota in southern Sri Lanka in April.
The USD 209 million facility was once dubbed the “world’s emptiest airport” due to a lack of flights.
“Action will be taken during the next few weeks to handover the loss-making Mattala International Airport to a joint India-Russia venture,” de Silva told reporters.
Earlier, the Sri Lankan Cabinet, which met on January 9, approved the calling of Expression of Interest by prospective parties. Accordingly, five proposals were received, and the Cabinet-appointed consultative committee decided to award a management contract spanning 30 years to Shaurya Aeronautics (Pvt) Ltd of India and Airports of Regions Management Company of Russia.
Mattala Airport Named After Former President Mahinda Rajapaksa
Mattala Airport, named after former president Mahinda Rajapaksa, was one of the major infrastructure projects of Rajapaksa’s nearly decade-long rule. Hambantota is the hometown of the Rajapaksa family, which used to wield considerable power before the unprecedented financial turmoil in the island nation in 2022.
The project was funded through high-interest Chinese commercial loans. 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. However, since 2016, the government has been looking for commercial partners to manage the airport as it was making heavy losses.
On Wednesday, the aviation minister also added that the development of the northern Kankesanthurai port with Indian assistance worth USD 69 million is being continued.
Sri Lanka Strikes Private Debt Restructuring Deal
Sri Lanka has reached a debt restructuring deal with the international sovereign bondholders after protracted negotiations, state finance minister Shehan Semasingher said on Thursday, calling it a “crucial step” in the cash-strapped country’s efforts to restore debt sustainability.
In a statement, State Minister of Finance Semasinghe said that an agreement on restructuring terms was reached on Wednesday, completing Sri Lanka’s debt restructuring process.
“ISBs (International Sovereign Bonds) account for USD 12.5 billion out of the total external debt of USD 37 billion. This agreement is a crucial step in our efforts to restore debt sustainability,” Semasinghe said. He added that the agreement with private bondholders was subject to the approval by the official creditor committee of nations, including India.
(With inputs from agencies)