News
Mattala Airport: AG proposes changes to clauses for management by India-Russia joint venture
View(s):By Namini Wijedasa
The draft commercial agreement to hand over the management of loss-making Mattala Rajapaksa International Airport (MRIA) jointly to India’s Shaurya Aeronautics Pvt Ltd and Russia’s Airports of Regions is with the Attorney General’s Department, Aviation Ministry Secretary K.D.S. Ruwanchandra said.
Sri Lanka has never before contracted out airport management to an entity outside of the government-owned Airport and Aviation Services (Pvt) Ltd. (AASL). If this deal goes through, India and Russia will manage the airport in the Hambantota district while China runs the seaport.
“We have not stopped work in this regard,” Mr. Ruwanchandra told the Sunday Times. The 30-year management proposal to enter into a commercial contract—under which all operational expenses will be absorbed, accrued, and reimbursed by the Indo-Russian joint venture—was last considered by the Cabinet on August 28 this year, documents obtained under the Right to Information Act show.
During negotiations, it was established that the Memorandum of Association (MoA) of the Airport and Aviation Services of Sri Lanka (Pvt) Ltd. (AASL) did not allow any other entity but AASL to manage an airport. The AASL was the statutory service provider under the Civil Aviation Authority Act of 2010.
The AASL then sought the AG’s opinion on whether a separate statutory service provider could manage MRIA by amending its MoA.
The AG’s opinion dated August 8 this year was that three clauses of the MoA required changing to give effect to the Cabinet decision to hand over MRIA management to a non-AASL entity. Even then, under the Civil Aviation Authority Act, certain services cannot be transferred out—they must continue to be held under the purview of the Sri Lankan government, AASL, or the Civil Aviation Authority of Sri Lanka (CAASL).
These are the provision and maintenance of search, rescue, and firefighting services at aerodromes; the provision and maintenance of an aviation security service; the provision of air traffic services, aeronautical information services, aeronautical communication services, and aeronautical aids [sic] for communication, navigation, or surveillance, the Cabinet was informed.
The AG has advised AASL to amend its MoA to state: “To co-operate or enter into partnership or joint pursue arrangement, or arrangement for sharing profits, union of interest, or co-operation with any company, firm, or person to carry on any business with such objects” other than those specified in the relevant causes “to acquire and hold…”
Also proposed is a second amendment to state: “To promote and establish any other company, the promotion of which shall be in a manner calculated to advance directly any of the objects” other than those specified in the relevant clauses, “and to acquire and hold a controlling interest in such
company…”
The Cabinet in August cleared the AASL to amend its MoA to permit it to enter into a commercial agreement with the foreign joint venture.
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