Reports that India is in advanced talks with Sri Lanka to revive the Mattala Rajapaksa International Airport in Hambantota has sparked concerns that Sino-Indian rivalry will spread by proxy to the island nation. The airport is part of the massive port complex built by China. But following huge losses (estimated at around $300 million), Sri Lanka earlier this year decided to sell 70 per cent of its stake in the port to a state-run Chinese firm for $1.1 billion, in order to offset the loan from China.
This caused much consternation in New Delhi, which sees the possibility of PLA navy ships or submarines docking at that port as a major security threat and a vindication of its fears about a Chinese “String of pearls” or ports aimed at encircling India. The deal itself was delayed for months after India raised its concerns with Colombo, but finally went through because Sri Lanka was unable to repay the loan.
Almost $8 billion of Sri Lanka’s $65 billion national debt is owed to China, which has ramped up its infrastructure aid to the nation as part of its ambitious Belt and Road Initiative. Plans for the port’s construction were drawn up soon after the Sri Lankan civil war ended in 2009, and the then President Mahinda Rajapaksa believed the project would help transform his home district into a international trade and tourism hub. India also convinced Colombo to retain the rights to deny Chinese warships entry to the port, and in May, Sri Lanka had rejected Chinese request to dock a submarine there.
A few years ago, China had given a loan of $190 million to build the airport, which was meant to service both the port and help ramp up tourism. Designed to handle almost a million passengers per year, it reportedly receives only about a dozen passengers a day, leading the New York Times to describe it as the “world’s emptiest international airport”. Though getting involved in the airport does not make commercial sense for India, strategically, the message going out to China is loud and clear.