Loss Making Mattala Airport to be Managed by India-Russia Joint Venture

Revive Mattala Airport: India-Russia Partnership Takes Charge

Loss Making Mattala Airport to be Managed by India-Russia Joint Venture

Sri Lanka is set to hand over the loss-making Mattala International Airport in Hambantota to a joint India-Russia venture, Aviation Minister Nimal Siripala de Silva announced. The airport, built at a cost of USD 209 million, has been a significant burden due to high-interest loans from the Exim Bank of China. The joint venture, awarded the management contract in April 2024, will run the facility for 30 years.

Mattala International Airport, named after former President Mahinda Rajapaksa, was one of the key infrastructure projects during his tenure. Despite the heavy investment, the airport earned the nickname “world’s emptiest airport” due to its lack of flights. Since 2016, the government has sought commercial partners to manage the airport and alleviate the financial losses.

The joint venture includes Shaurya Aeronautics (Pvt) Ltd of India and Airports of Regions Management Company of Russia. The decision follows the Sri Lankan Cabinet’s approval to call for Expressions of Interest in January. Five proposals were received, and the consultative committee selected the India-Russia partnership for the management contract.

In addition to the Mattala airport development, Minister de Silva mentioned the ongoing development of the Kankesanthurai port in the north, supported by Indian assistance worth USD 69 million.

The Mattala airport project highlights the challenges of large-scale infrastructure developments funded by high-interest loans and the need for effective management to ensure their viability. The new management hopes to turn around the airport’s fortunes and make it a functional and profitable venture.