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Preconditions set on Mattala JV with India: Government

The Government yesterday said it had set preconditions focused on protecting national security with the Airports Authority of India ahead of considering a proposed business plan for a possible joint venture between the two countries to resurrect the lossmaking Mattala Airport.

Rejecting opposition charges that the Government was attempting to sell off the Mattala airport to India, Transport and Civil Aviation Minister Nimal Siripala de Silva told Parliament yesterday that he would maintain the highest possible transparency in dealing with the Indian proposal now placed before the Cabinet. A technical evaluation committee has also been appointed by the Cabinet.

“The Airports Authority of India expressed some interest in starting a joint venture. I submitted their proposal, which was to establish a joint venture, to the Cabinet on 27 July 2017. According to this joint venture, they would take 70% stake and the management of the airport. So Sri Lanka was looking at settling the debt with the money India would pay for their stake. We considered the national security, the job security of the local employees, among many other matters when it came to this proposal. A technical evaluation committee was appointed,” the Minister said.

The preconditions Sri Lanka has put forward include that India pays 70% of the Sri Lankan Government’s Assessment, only to have commercial operations and not to have any military activities or aircraft landings, for air navigation systems to be manned by the Sri Lankan authorities, perimeter security to be maintained by the Sri Lanka Air Force and the internal security by Sri Lanka similar to Bandaranaike International Airport (BIA). Emergency services including firefighting are also to be manned by Sri Lankans.

“We also included in the precondition the job security of the 570 employees recruited by the previous government. Large amounts of the earnings we get from BIA are used to settle the Mattala debt. Now we get more income from the duty-free shops at BIA. We are in the process of putting up a temporary terminal at BIA. This second terminal is expected to last 10 years. With the anticipated joint venture, we need to make Mattala an active airport. We have requested a business plan from the Indians but unfortunately there is a legal implication.”

“Unless amended, our civil aviation laws prevent giving a majority stake to a foreign company. This amendment will come to Parliament for approval. Mattala was a loss-making enterprise when I took over in 2015. Maintaining transparency, I have submitted a Cabinet Paper on 1 December 2015 highlighting the business promotion of Mattala International Airport. My proposal invited local and foreign proposals. As a result, we received six small proposals, which were not adequate. I invited the Chinese entrepreneurs to take part in this when I visited China with the Prime Minister. But we didn’t get any from China,” he added.

(FT)

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