Is Mattala airport a commercially viable project? - Editorial

20 March 2013 07:20 pm - 1 - {{hitsCtrl.values.hits}}

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Sri Lankans on Monday witnessed the opening of the country’s second international airport in Mattala, a location over 200 Kilo Metres from Colombo. The airport was built at a cost of US $ 209 million, a sum obtained from China as a loan.

The dialogue about a second international airport had been there in the country even before the Rajapaksa government came to power, quite similar to a port in Hambantota. So what President Rajapaksa and his government have done is the execution of the plans, of course with changes.

If somebody very narrow-mindedly criticised the Mahinda Rajapaksa International Airport (MRIA) in Mattala as an unnecessary project, we don’t think the majority of this country would agree with him or her. The opening of a new international airport can usher prosperity to a country and there are enough examples of it worldwide.
But the catch here would be the formula the government will put in place to make the Mattala Airport a commercially viable project.

Sri Lanka has now transformed itself from a poor country to a middle income country. The downside of this transformation is the country won’t have access to concessional loans anymore. Sri Lanka will have to borrow money from international markets at higher commercial rates. So whatever project the government undertakes, the highest priority should be given to return on investment. Unlike earlier, the country doesn’t have the luxury of waiting many years to reap benefits on its investments.

So in that sense, it is clear that the country cannot afford Mattala Airport to be another Hambantota Port.

The government and the well-wishers to the new airport point out that it is located in the vicinity of the Hambantota Port and the Hambantota International Cricket Stadium and is in close proximity to the Yala National Park, Udawalawe Elephant reserve and several religious and historic places, so it will be ideal for tourists who are flying into Sri Lanka to start their journey from Mattala and depart from Katunayake.

This no doubt appears a solid argument. But people will remember what was said about the Hambantota Port. Some ministers even went on to say that even if Hambantota Port could provide water to the ships passing by, it would make a profit! According to Sri Lanka Port Authority (SLPA), Hambantota Ports generated a turnover of approximately Rs.132 million in 2012, falling well short of SLPA’s stated target of between Rs.500 to 600 million.

This doesn’t mean that constructing a port at Hambantota was futile. Unarguably an infrastructure project of that scale is a commendable achievement. But the problem is whether the government has put in place the right formula to realise the capacity of Hambantota Port, so that the country gets a return on investment and can start paying back the loans that were raised to build it.

Therefore for our sake and for the country’s sake we wish the newly opened Mattala airport the best of luck and the last thing this nation wants to see is it going into history as just a vanity project that gulped a lot of money which could have been used for other important developments.

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Comments - 1

Calistus Jayatilleke Thursday, 21 March 2013 12:32 PM

For all purposes and intents, a real White Elephant, worse than the wild elephants who are roaming in the area.

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Is Mattala airport a commercially viable project? - Editorial

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