The Chinese started vying for Mattala Airport on seeing, both, then and the incumbent governments lament over the non-operation of the International Mattala Airport in the South. The Chinese built it and said it’s not their problem if Sri Lankans don’t make use of it.
However, the trend has changed with the internal politics routing the government for ‘selling’ national assets. Also the government is being webbed with geopolitics which describes that Mattala Airport cannot be given to the Chinese to manage when they have the Hambantota Port – fair enough!
The Indians have expressed their interest in managing the airport to make it a profitable business but as a joint venture so that they can share the ‘joy’ and the ‘blunder’ together.
If the Mattala Airport is given to India, this would be one of their biggest or next to Northern Railway project . Recently, the Indians also signed an agreement for USD 380 mn financial assistance to Sri Lanka Railways.
The Deputy Civil Aviation Minister Ashoka Abesingha told Ceylon Today that the debt incurring with the Mattala Airport is unbearable.
He laments that USD 252 million worth airport but generating only three million per month with one flight landing there. “The monthly instalment paid to China is USD 300 mnwhich means USD 3.6 bn annually. He also added that the expenditure incurring at the Mattala stands at Rs 25mn every month.
He said the Rajapaksas signed a 12 year payment scheme running into its third year and another 9 years left to settle the loan.
He moaned that this has to be soon settled and the only option is to give it to someone so that the loan could be settled soon.
He confirmed that the expression of interest was shown by the Indians but it is not yet confirmed but ‘likely’ to be given to them after studying the proposal in detail and said within two to three months they would decide the party that comes into partnership with them in boosting the airport.
“We want that USD 252 million loan we are supposed to pay the Chinese to be given over the counter by the company that is going to run the Mattala airport.” He said after that is settled the government wants the company to boost more flights to Mattala.
He pointed out that at present the BIA is overcrowed because the capacity is 6.5mn but now it is 9.4 mn with 171 flights on daily basis. He noted this is why a second airport is needed and what he suggested is that the passengers visiting the South and places like Trincomalee will be encouraged to use the Mattala Airport. He said if India is partnering then it’s their job also to divert flights to Mattala Airport.
India has its concerns about Mattala. It has to be viable and revenue making project. They intend to have a flying school incorporating other ventures to profit and they are willing to hear what exactly Sri lanka wants form the Indians when they meet soon.
Mattala – the background
Rajapaksas had this vision of having a second big airport amidst Sri Lanka’s best area for fauna and flora. When the writer interviewed then Minister of Economic Development Basil Rajapaksa he said ‘you know we people do not appreciate the good side of the project. We wanted an airport in the wilderness where peacocks are flying and elephants roam about and when the tourists are about to land they would be welcomed by these animals – the concept behind the Mattala airport.
What happened to that is now a history and the airport is decaying with only one flight – Fly Dubai landing there with a few passengers.
You can even buy a ticket for Rs 100 to roam about to see the place. The entire duty free area is closed and most of the workers are idling.
At that time, Rajapaksa government said, the airport is not branded properly in the world arena and that was the mistake.
The Chinese officials at the Embassy in Colombo did not want to accept the blame for constructing an airport that has no people.
They said it is not their problem if the government does not know how to use it. They said in every city in China there is a domestic airport which is busy as ever and Sri Lankans do not know how to use it or promote it.
The airport gradually came to a halt and Sri Lanka was caught in a massive debt trap due to such ignorance and today the government is paying 3.6bn US dollar per year to China over the airport project.
The debt trap has led to more and more of wanting loans and it was China that came forward with more investment projects in the South to compensate the loan and interests. Even Prime Minister Ranil Wickremesinghe’s visit to China last year in August was to check it out a viable solution to make the Mattala Airport a happening place using the Chinese but with the Hambantota industrial zone and the Port project that was ‘forced’ to give it to China, resulted in India to handle the only Southern airport.
Amending the Sino-Lanka MoU on Hambantota Port
After the Hambantota Port MoU was signed the government said it is going to have discussions with the Chinese over giving the oil tanks to the Ceylon Petroleum Corporation and they would ‘amend’ the MoU.
There is no looking back if the MoU is signed. The Chinese officials speaking to Ceylon Today stated that if the agreement is amended, a new MoU has to be signed and if certain clauses are removed it’s basic logic that from the proposed amount there would be a deduction.
The government will only reap some 15% while the Chinese have a share of 85%. The Hambantota port is USD 1.4bn worth deal but what the government received was only USD1.12bn USD the Deputy Minister of Civil Aviation noted.
Colonel R. Hariharan (retd), a retired Military Intelligence specialist on South Asia who had served with the Indian Peace Keeping Force in Sri Lanka as head of intelligence stated that as a general rule it is very difficult to amend any agreement with Chinese, the reason why all their agreements are not made public and you are dealing with the State when you deal with Chinese companies.
“Yes they can probably talk about amending when it is politically convenient; but will not accept any amendment unless the company is compensated; so I expect Sri Lanka to lose some equity to the Chinese in some other company where they are involved if at all Chinese agree to amend it. Of course, they can talk; Bhutan has had 24 rounds of talk with Chinese but border is not finalized even after both countries jointly survey the border and agreed on its alignment except for three specific areas where ownership is in dispute. India has had 19 rounds of border talks but no progress has been made. I suppose they will sign these agreements when it suits them politically. So it doesn’t matter what Sri Lankans say, it will be decided by the Chinese; this is what has happened in Pakistan. There Chinese aided power projects will be paid 27% every year after the project is completed whether it is making money or not.
He noted that the CPC Union must make realistic demands. “President Sirisena is in a financial logjam. I sympathize with him and the Union guys must understand the current compulsions. But they also have a point because the done deal is so unjust to Sri Lanka and the workers because up to supervisory level I expect the Chinese to occupy the slots. For instance 99-year lease in practice is a euphemism for sale. Sri Lanka will never have the economic or political power of getting it back from China even if it exercises the option to redeem it even in the slot given in between. So we should take the whole exercise with a pinch of political salt.