MRIA: Proposal before cabinet soon

The proposal to develop the Mattala Rajapaksa International Airport (MRIA) into a Public-Private partnership (PPP) with India would be presented to Cabinet shortly, Deputy Minister of Aviation Ashok Abeysinghe said today.

He told a media briefing that Sri Lanka would get a 30 per cent stake of the airport and India the rest.

“Government called for tenders from various countries to find a partner. There were six bids. Some were only interested in using the airport to repair airlines and as the best proposal was from India, we negotiated with them. The Government valuation was $ 326 million. Subsequent to discussions, Although India was originally reluctant, they consented to a share of 70 per cent for India and 30 per cent for Sri Lanka. The government will get a payment equal to 70 per cent of the value and India will bear this loss till it breaks even. This is a win-win situation, as presently the total loss is borne by Sri Lanka. The proposal will be presented to Cabinet shortly and then to Parliament for approval,” the Deputy Minister said.

“Some $ 190 million was borrowed from the Chinese Bank for the Mattala Airport, with an additional spend of $ 39 million. The Sri Lankan government allocated $ 20 million and the total cost has been $ 252 million. The feasibility study was not done in a proper manner. The monthly revenue from the airport was Rs 6.5 million last year whereas the monthly expenditure was as high as Rs. 290 million. Also, we have to pay Rs 1.7 billion per year for debt servicing. Three loan instalments have already been paid out of revenue generated from the Katunayake International Airport. How can we do this for years on end?" he asked.

Loans were obtained for the Hambantota Port and Mattala Airport in 2010. The grace period for Hambantota Port was seven years. Loans have to be settled from 2017. Loan repayments for the Airport have to be repaid from 2015,” he said. (Yohan Perera)