Mattala airport: MoU being redrafted for deal with India

A draft Memorandum of Understanding (MoU) to hand over management of the Mattala Rajapaksa International Airport (MRIA) to the Airports Authority of India was recently presented before Sri Lanka’s Cabinet and is now being reworked at the Indian Government’s request, multiple sources confirmed this week.

The MoU was also drawn up at India’s request, they said. “At no point during the negotiations with India was the proposal withdrawn or denied, despite what the media reported following an Indian State Minister’s comments in the Lok Sabha last week,” one source said. Talks for management control of MRIA are continuing between India and Sri Lanka.

Bharatiya Janata Party (BJP) Lok Sabha Member Poonam Mahajan asked India's Civil Aviation State Mininster Jayant Sinha whether the Airports Authority of India (AAI) “is considering to purchase a controlling stake in Sri Lanka’s Mattala Rajapaksa International Airport thereby gaining ownership of the airport”.

Minister Sinha replied: “No, Madam. No such proposal is under consideration at present”. This led to widespread speculation— spurring clarifications in Sri Lanka— that India was backing out of plans to manage the airport.

But Minister Sinha’s response was tailored to the question of whether India would buy a controlling stake and become MRIA’s owner. This is not under consideration. “Part of the question said ‘thereby gaining ownership of the airport’, and, as no such clause was included in the proposal, the minister was honest in his answer,” an official in Colombo said.

“The Sri Lankan Government’s terms only allow for management control of the commercial activities of the airport while ownership and all statutory functions, including air traffic control and air traffic rights, will be under the control of the Sri Lankan authorities, ”the official said.

At present, there is an impediment to India taking over MRIA. The Civil Aviation Act (2010) gives airport controlling rights only to the Airport and Aviation Services Limited and, in the event of any shortcomings on its part, to the Civil Aviation Authority of Sri Lanka. This requires change before management is given to a private or foreign entity. There is no draft amendment ready.