News
Extensive moves to resuscitate MRIA
View(s):By Namini Wijedasa
The Aviation Ministry is to again seek Cabinet approval to call for expressions of interest (EOIs) for “possible direct and indirect aviation-related ventures” at Mattala Rajapaksa International Airport (MRIA) after an initial inquiry from the United Arab Emirates (UAE) fell through.
Successive Governments have desperately tried–and failed–to make MRIA viable, Cabinet papers obtained by the Sunday Times through a Right to Information application show. Hopes that the UAE will deliver a proposal are the latest to be dashed. And suggestions to set up hotels and a logistics hub were also shelved.
In August this year, Aviation Minister Nimal Siripala de Silva presented a memorandum seeking approval to operate the airport with aeronautical and non-aeronautical business ventures under a public-private partnership.
The Minister also wanted clearance to invite EOIs globally from strategic entrepreneurs who “are willing to participate in possible direct and indirect aviation-related ventures at MRIA”.
But President Ranil Wickremesinghe, in his capacity as Finance Minister, pointed out that the UAE had expressed interest in submitting an investment proposal. And it was agreed that this would be taken into consideration alongside other recommendations in the Aviation Minister’s Cabinet memo. However, nothing came of the UAE’s interest, Aviation Ministry Secretary K. D. S Ruwanchandra told the Sunday Times.
And the Ministry will now re-submit the Cabinet memorandum which also revealed that “MRIA has not been able to earn revenue to meet even operational expenditure up to now due to the absence of a sizeable community in the surrounding area which attracts scheduled airline operations.” Aviation experts had predicted this outcome when the airport was conceptualised.
“In the circumstances, MRIA is required to have more non-aeronautical revenue operations and required to adopt promotion strategy to make use of facilities of MRIA while attracting passengers from new airlines and retaining those who had flown previously,” the memo said.
Possible direct aviation-related ventures include maintenance, repair and overhaul facilities (MRO) for airlines; flying schools and aerospace engineering schools; aerospace engineering and manufacturing; fixed-based operations; long-term parking of aircraft; and air-sea cargo processing. Even an aircraft boneyard–storage area for aircraft that are retired from service–has been considered.
Possible indirect aviation-related ventures are listed as logistics services (warehouses, freight forwarding courier services and transportation); resort hotels and hospitality activities related to tourism, recreation and leisure; branded shopping outlets, spa and therapy; food processing centers; industrial parks; and renewable energy industries.
The total cost of MRIA construction was US$ 244mn (Rs 81bn at prevailing rates). Of this, US$ 190mn (nearly Rs 70bn) was a loan from the Chinese Exim Bank. Airport and Aviation Services (Sri Lanka) Pvt Ltd (AASL) has been repaying the loan since 2015. About US$ 102.4mn (Rs 37.4bn) remained to be paid as at August this year.
The Aviation Ministry states that AASL “can neither invest for such business activities nor can they afford to bear huge losses of the scales as aforementioned annually in maintaining MRIA, as the AASL has to invest large sums of money out of its own funds for the development, operation and maintenance of BIA [Bandaranaike International Airport], the main gateway to the country”.
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