India-Russia Joint Venture To Manage Strategic Sri Lanka Airport

India-Russia Joint Venture To Manage Strategic Sri Lanka Airport

An Indian-Russian joint venture has secured the management rights for Sri Lanka’s Mattala Rajapaksa International Airport, once known as the “world’s emptiest airport.”

The $209 million facility, previously struggling with minimal flights, will now be overseen by Shaurya Aeronautics (Pvt) Ltd. of India and Airports of Regions Management Company of Russia under a 30-year contract approved by the Sri Lankan Cabinet.

Under former President Mahinda Rajapaksa’s administration, the airport received initial funding from Chinese loans; however, since then, it has incurred significant financial losses, prompting the government to look for business partners to operate it as of 2016.

The airport faces environmental challenges due to its proximity to a wildlife sanctuary, which causes disruptions from wildlife interference such as bird strikes. The Sri Lankan government has experienced financial strain as a result of the airport, which has made the country’s debt problem worse because it relied on Chinese loans for infrastructure projects. Sri Lanka’s dependency on Chinese financing led to its default on foreign debt in 2023.

Concerns about Chinese influence were also raised after Sri Lanka handed over the management of the adjacent Hambantota Port to China Merchants Port Holdings in 2017 owing to repayment troubles, raising arguments about China’s “debt trap” diplomacy and regional influence.