Nov 02, 2016

Sri Lanka up on the Mattala Airport deal with Chinese firm

Sri Lanka is up on the Mattala International Airport deal as it secured a Foreign Direct Investment (FDI) amounting to US$ 200million -300 million from a Chinese firm turn it round the debt-riddled, revenue draining Airport.

The Cabinet Appointed Negotiating Committee (CANC) has negotiated the deal with the Chinese investor IZP group, a Chinese information technology firm and finalized the deal at 80 percent of the total stake under Public Private Partnership, an official said.

This airport is a landmark, a sign of progress in the Southern region of Sri Lanka, which is located in a forested area a 250 kilometer drive from Colombo.

The airport has a 12,000 square meter terminal building, 12 check-in counters, two gates, a runway long enough to handle the largest commercial jets, and capacity for one million passengers per year.

Central Bank Governor Dr. Indrajit Coomaraswamy told journalists in Colombo that Sri Lanka will get foreign exchange boost of over US$1 billion from the Hambantota Port transaction and $200-300 million from the Mattala Airport transaction with Chinese investors who have agreed to take over 80 percent stake of the two entities.

This money will be FDIs and it could be converted to Sri Lankan rupees he told a media conference noting that it is not a swap of loan into equity.

The Sri Lankan Government will service the loans taken to build the Mattala Airport and Hambantota Port from China, he pointed out.

Mattala International Airport has hit finances of Sri Lanka state-run airport agency as it has no revenue to service a loan of more than 200 million dollars loan taken from China.

The airport was also designed and built by China.