Govt. receives 7 EOIs to revive Mattala

Wednesday, 14 September 2016 00:16 - - {{hitsCtrl.values.hits}}

By Charumini de Silva

The Government has received seven Expressions of Interest (EOI) for the Mattala Rajapaksa International Airport (MRIA), a top official confirmed, as the Government looks to offload the debt-ridden venture by former President Mahinda Rajapaksa.“We have received seven EOIs and we have started processing it,” Civil Aviation Authority (CAA) Director General and Chief Executive Officer H.M.C. Nimalsiri told the Daily FT.

The Transport and Civil Aviation Ministry called for companies interested in taking over the debt-ridden airport to come forward with applications in August. The closing date for receiving EOIs was 26 August 2016.

Nimalsiri is tasked with submitting a report on the EOIs to the procurement committee, which is headed by the Transport and Civil Aviation Ministry Secretary.

“The Cabinet appointed Tender Board will determine and make the declaration,” he said.

Although the closing date for submission of EOIs was initially fixed on 12 August, it was later extended to 26 August. The Director General opined the deadline extension was likely prompted by “expectations of more bids.”

The tender board would, over the next few months, whittle down the applicants before the Government kicks off formal negotiations.

Public Enterprise Reforms Minister Kabir Hashim had earlier revealed a State-run Chinese company was already in talks with the Sri Lankan Government to take over management of the Mattala airport.

However, unlike SriLankan Airlines, whose debt the Government has said it is prepared to take on in the event of an international partnership, a company seeking to manage Mattala would also have to absorb the entirety of its debt. If talks with the unnamed State-run Chinese company are successful Mattala could be the first successful debt-equity swap mooted by the Sri Lankan Government as an alternative to growing debt to China.

Mattala commenced commercial operations in March 2013 at an estimated cost of $ 210 million and professed to accommodate the world’s biggest cargo and passenger aircrafts.

However, the Government struggled to earn revenue, even after implementing an open skies policy. The present Government discontinued SriLankan flights to Mattala last year, and has been struggling to improve income from the airport that was largely seen as a “white elephant” project of former President Mahinda Rajapaksa.