By Roy Denish.
Mattala Airport losses remain substantial as official figures expose its financial burden while the SriLankan Airlines Airbus probe continues.
COLOMBO — Sri Lanka’s Mattala Rajapaksa International Airport is reportedly losing between Rs. 6 million and Rs. 7 million a day, keeping public financial management in the spotlight as renewed legal proceedings surrounding the SriLankan Airlines Airbus procurement controversy continue.
Opened in 2013 as a transport and economic hub for the Southern Province, Mattala airport was originally designed to handle one million passengers and 45,000 metric tonnes of cargo annually.
Constructed with loans from the Export-Import Bank of China, the project’s initial estimated cost of US$209 million reportedly increased to US$243.7 million upon completion.
Despite the significant capital investment, the airport has struggled to attract sustainable commercial traffic, recording approximately 321,577 passengers over a six-year period.
The financial burden on the state has remained substantial.
In 2024, the airport reportedly recorded operating costs of Rs. 3.6 billion against revenue of approximately Rs. 242 million.
The Treasury also faces annual interest payments of around Rs. 2.05 billion to service construction-related debt.
Environmental concerns have also surrounded the project because forest land within a traditional elephant migration corridor was cleared during construction.
Efforts to increase traffic at the airport also had financial implications for SriLankan Airlines.
The national carrier was directed to operate flights through Mattala in an attempt to increase passenger numbers, reportedly resulting in additional losses of approximately Rs. 740 million between 2013 and 2015.
SriLankan Airlines has itself faced years of financial difficulties, accumulating substantial losses and placing an additional burden on the state.
Airbus Investigation
Separate from the airport’s operating losses, an international corruption investigation involving SriLankan Airlines’ Airbus fleet procurement has intensified legal scrutiny.
The controversy centres on a multibillion-dollar aircraft purchase agreement signed between SriLankan Airlines and European aircraft manufacturer Airbus in 2013.
International investigations have examined allegations that substantial bribes were promised or paid through intermediaries in connection with the transaction.
The Sri Lankan government later cancelled an order for A350 aircraft, resulting in significant cancellation and compensation costs.
The Commission to Investigate Allegations of Bribery or Corruption, together with other law-enforcement authorities, has continued investigations into alleged bribery and money-laundering connected to the transaction.
Recent proceedings have also involved MP Namal Rajapaksa, who was arrested and remanded over allegations that he received Rs. 100 million connected to the wider investigation.
His lawyers have denied the allegations and challenged the prosecution’s evidence.
Investigations have also examined the roles of several other political and corporate figures connected to the aircraft transaction.
Meanwhile, the government continues to explore commercial options for the loss-making Mattala airport.
Previous efforts to introduce private-sector participation have faced difficulties, and authorities are reportedly considering new public-private partnership proposals covering ground handling and commercial operations while retaining state control over functions such as air traffic management and national security.
These restructuring efforts form part of Sri Lanka’s broader attempts to improve the financial performance of state-owned enterprises and reduce the burden of public-sector debt.
