By: Staff Writer
June 02, Colombo (LNW): In a significant policy shift, the National People’s Power (NPP) government is preparing to invite Expressions of Interest (EoI) from private investors to operate various services at the loss-making Mattala Rajapaksa International Airport (MRIA), despite its long-standing opposition to the privatization of state assets.
Opened in 2013 with funding from China EXIM Bank, the MRIA has consistently drawn criticism due to its underutilization and heavy financial losses. Over the years, multiple administrations have sought to transfer its operations to private or foreign entities, with limited success.
Most notably, the previous government attempted to hand over the airport’s management to a 30-year India-Russia joint venture—India’s Shaurya Aeronautics (Pvt) Ltd. and Russia’s Airports of Regions Management Company. The proposal, however, was eventually shelved due to legal constraints under the Civil Aviation Authority Act, which prohibits the outsourcing of certain core aviation services.
Now, the NPP government is aiming for a more segmented approach. Ports and Civil Aviation Ministry confirmed that a Cabinet paper would soon be submitted to initiate the EoI process. He added that the previous India-Russia consortium could also respond once the call is officially made.
The government intends to invite private investment in areas such as passenger services, cargo handling, and aircraft maintenance—while retaining core aviation functions like air traffic control and airport security under the state-run Civil Aviation Authority of Sri Lanka (CAASL).
The Civil Aviation Authority official reiterated that while airport management could be partially opened to private players with ministerial consent, key services related to safety and air navigation must remain under state control.
Internal documents obtained through the Right to Information Act revealed that the former government had already forwarded a draft agreement with the Indo-Russian venture to the Attorney General’s Department.
If approved, it would have marked Sri Lanka’s first instance of outsourcing airport operations to a non-state entity, diverging from the precedent of using the government-owned Airport and Aviation Services (Sri Lanka) Ltd. (AASL).
However, legal barriers surfaced. The AASL’s Memorandum of Association (MoA) did not allow any entity other than itself to manage an airport. The Attorney General, in an opinion dated August 8, 2024, advised amending three key clauses in the MoA to facilitate such a move.
The AG further clarified that, under existing laws, essential services—such as firefighting, search and rescue, aviation security, and air traffic operations—must remain under government oversight, either through AASL or CAASL.
The Cabinet subsequently cleared the AASL in August 2024 to revise its MoA, allowing it to partner with or promote other companies to operate non-core services at the MRIA. These amendments are seen as a way to navigate legal constraints while still attracting foreign or private sector participation to salvage the struggling airport.
If implemented, the move could signal a pragmatic shift in the NPP’s economic policy, blending public control with private efficiency in an effort to finally make Mattala a viable transport hub.
