India to operate Mattala Airport for 40 years

COLOMBO (News 1st) -  The Indian Minister of State for Civil Aviation Jayant Sinha has made it clear, through a statement in the Lok Sabha, that there is no proposal under consideration for the Airports Authority of India to buy a controlling stake in the Mattala Airport. However, Sri Lanka's Minister of Civil Aviation Nimal Siripala de Silva stated recently that discussions are continuing to take place with India. Minister Nimal Siripala states that the Indian Airport Authority and Sri Lanka are hoping to establish a Joint Venture Company to control the Mattala Airport, where 70% shares will be bought by India. If the Indian Airport Authority buys 70% equity in the Company controlling the Mattala Airport, isn't it a controlling stake over the Airport? The Hindu Newspaper reports that both sides have held several rounds of discussions over this project and reports that India will operate the airport on a 40-year lease, as per the draft agreement. Accordingly, the two governments, after detailed negotiations, have agreed that India, with a 70% stake in the joint venture will contribute $225 million to revamp and run the airport, while Sri Lankan will invest the balance. The Hindu Newspaper also goes on to state that it is an open secret that New Delhi’s strategic interests in running the airport, located near the China-controlled port in Hambantota, outweighs commercial considerations. Even though this airport has gained a strategic interest in India, Minister Nimal Siripala states that the airport will not be used for any Military or Air Force activity.