India’s Keen Eyes On Sri Lanka’s EOI Offer To Lease Airport Near Hambantota Port
New Delhi : India is closely monitoring Sri Lanka’s decision to offer foreign investors control of an airport near the Chinese-controlled port of Hambantota, as it could offer a rare opening for Indian firms seeking a strategic foothold in the Indian Ocean, people familiar with the matter said Sunday. The Sri Lankan government has appealed to domestic and international investors by June 9 to express their interest in taking control of the Mattala Rajapaksa International Airport (MRIA) in Hambantota under the 30-year build-operate-transfer (BOT) model.
In 2017, China took control of the strategic Hambantota port through a 99-year lease, which raised concerns in New Delhi due to the location of the mega transit hub.
New Delhi is eyeing the new opportunity carefully as both the neighboring countries look to develop greater trade and strategic relations following Prime Minister Narendra Modi’s visit to the island nation in April last year.
Sources said that Mattala Rajapaksa International Airport, located about 250 km from the capital Colombo, went through a troubled period in the first decade.
The project, which was implemented with a great goal in 2013, cost 209 million US dollars and was financed mainly by the Export-Import Bank of China. However, despite having a flashy terminal building and a 3,500-metre runway, it failed to meet the passenger traffic and airline commitments needed to remain in business.
The facility was underutilized for years and was derided around the world as the “world’s emptiest airport”.
Now the Sri Lankan government has issued a new Expression of Interest (EoI) inviting domestic and foreign strategic investors to acquire, operate and develop MRIA into a modern aviation hub.
EoI offers two independent investment paths. The first, the people cited above said, is airport operations – a management contract for civil airport operations; This contract requires at least five years of experience in relevant aviation or the operation of at least one international airport serving over one million passengers per year.
The second is landside operations offered through the BOT model with 30-year lease and extension provisions. It would enable the development of 238 hectares of land, they said, on a scale comparable to China’s developed Colombo Port City, but without any political risk.
The land parcel can be used for the establishment of maintenance, repair and overhaul (MRO) facilities, flight school, logistics parks, solar energy facilities, industrial parks and holiday hotels.
Most importantly, the two paths are independent: Investors can enter through landside operations alone, airside operations alone, or both; This provides meaningful flexibility to build a diversified, risk-mitigated portfolio.
They said that from India’s perspective, the project has a strategic dimension in the face of China’s increasing attempts to expand its political and economic influence over the island nation.
“An Indian presence in Hambantota will be a concrete expression of India’s Neighborhood First policy and MAHASAGAR Vision’s commitment to the Indian Ocean region, especially as a confidence-building investment in a close partner,” one of the people said.
Explaining the importance of the project, people said India’s aviation sector is the fastest growing sector in the world and the MRO industry is under significant capacity pressure.
Mattala’s long runways, uncongested airspace and generous land footprint make it a natural candidate for an MRO hub serving Indian carriers, reducing turnaround times and costs while establishing a true Indian Ocean base, they said.
A flight school here is equally logical: Pilot training capacity in India is growing, they say, and Mattala’s congested-free skies are an asset, not a liability.
They noted that the landside opportunity is highly attractive as it includes 238 hectares of government-leased land, perfect for industrial parks, logistics and solar projects.
They added that such a strategic opportunity is rare in the region as Sri Lanka actively supports Indian investments and shares privileged trade access with India.
The new opportunity comes a year and a half after a project planned by some Indian investors near Mattala failed to come to fruition.
The previous government, Shaurya Aeronautics Pvt. It had almost completed a 30-year lease agreement with an Indo-Russian joint venture backed by . Ltd., but the deal could not be realized after the change of government.
The current Statement of Intent is a clean, fresh start and the strategic rationale is stronger than ever, people said.
