India-Russian consortium to manage Sri Lanka's airport financed by China
- In Reports
- 06:14 PM, Apr 26, 2024
- Myind Staff
According to a cabinet statement, Sri Lanka plans to transfer the management of its $209 million Chinese-built airport to two Indian and Russian companies. This move comes as the island nation aims to mitigate losses from its state enterprises.
Since its inauguration in 2013, the Mattala Rajapaksa International Airport (MRIA), financed by China EXIM Bank, has been embroiled in controversy. Issues such as a limited number of flights, its environmentally sensitive location, and continual financial losses have sparked debate and criticism.
According to a cabinet statement, Shaurya Aeronautics (Pvt) Ltd. of India and Airports of Regions Management Company of Russia will assume management of the airport for a period of 30 years. The statement did not disclose the value of the deal.
The airport was constructed while former President Mahinda Rajapaksa was in office. During his tenure, Sri Lanka moved towards closer ties with China, shifting away from its traditional neighbour, India. Located in Rajapaksa's hometown, the airport holds significance in his political legacy.
In May 2022, Sri Lanka experienced a default on its foreign debt as the country's foreign exchange reserves plummeted to unprecedented lows. This event precipitated the most severe financial crisis in over seven decades for the island nation.
Sri Lanka is actively addressing losses incurred by numerous state-owned enterprises following the acquisition of a $2.9 billion bailout from the International Monetary Fund (IMF). This assistance has played a crucial role in stabilising the economy and facilitating its progress towards a projected return to growth in 2024 after two years of economic downturn.
Image source: The Economic Times
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