Another Doklam Type Conflict on the Cards with China

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  • Sri Lanka has requested India to bail it out from the Loan repayment problem provided by China for development of Mattala Rajapaksa International Airport (MRIA) in Hambantota, 250 km south from Colombo.
  • MRIA at Hambantota was developed with the help of Chinese help of $190 million with the 90% contribution.
  • Now-a-days the MRIA is running at losses and unable to repay the loans to China.
  • Sri Lanka is under debt of Chinese Exim Bank for $301 million @ 6.3% interest, which is considered to be very costly as compared to the World Bank or Asian Development Bank’s soft loans ranging between 0.25 to 3%
  • China wanted one of its submarine to be docked at Shi Lanka’s port, which Sri Lanka refused.
  • Sri Lanka has requested to bail it out for which talks are going on with Indian delegation.
  • If Sri Lanka agrees to the demand of China to convert the debt into equity of its current running projects, then China can claim ownership resulting military use of Sri Lankan base.
  • If India agrees to run MRIE at Hambantota, a conflict of interest may start, where the supremacy in the Bay of Bengal may not be easy for China.

If India can turn the loss making MRIE at Hamtantota in to profit making airport then other smaller countries may also look towards India for their smaller needs instead of China.

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