Wednesday, October 18, 2017

India-China Rivalry Spills Over in Sri Lankan Airport

India and Sri Lanka are close to finalizing a joint venture to manage and expand facilities at the Mattala Airport, which is situated near the Hambantota Seaport, a key port in China’s multi-trillion dollar Belt and Road Initiative.
New Delhi (Sputnik) — Sri Lanka had been scouting for alternate investors for the Chinese-built airport, which began operations in 2013.The airport can handle a million passengers but has not been able to use even 5 percent of its passenger handling capacity. The cargo service has also been extremely under-utilized, with just 69 metric tons moved in 2016 despite an annual capacity of 45,000 tons.

China invested $230 million in the airport, built at a total cost of $253 million. China had reportedly bid to operate the airport, but couldn't reach an agreement over financial conditions set by the Sri Lankan government.
"It was during this time that India came up with a proposal. They were ready for a joint venture with the Airport and Aviation Services," Reuters quoted Sri Lankan Civil Aviation Minister Nimal Siripala as saying.

India's revival plan for the Mattala Airport includes a plan to start a flight school and a maintenance hub at the airport to boost revenues while it builds up traffic. The size of the joint India-Sri Lanka investment in the airport is estimated to be around $293 million initially, of which India will cough up around 70% for a 40-year lease. India's multi-conglomerate GMR has shown interest in the airport's operations.
China, however, may not like to lag behind as the nearby Hambantota Seaport is part of the country's multi-trillion dollar infrastructure-related Belt and Road Initiative. China has a 99-year lease of the seaport. Beijing also plans to build an investment zone and a refinery, the largest in Sri Lanka.
17/10/17 Sputnik News

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