New Delhi (Sputnik) — Contradicting a recent statement by the Sri Lankan government, the Indian government has denied reports that it was planning to purchase a controlling stake in Sri Lanka's Mattala Rajapaksa International Airport.
"No such proposal is under consideration at present," Jayant Sinha, India's minister of state for civil aviation, replied to a question on whether the Airports Authority of India (AAI) was considering to purchase a controlling stake in Sri Lanka's Mattala Rajapaksa International Airport thereby gaining ownership of the airport.
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Earlier this month, Sri Lanka's minister of civil aviation, Nimal Siripala de Silva, had informed the country's Parliament that a joint venture would be formed to operate the debt-ridden airport where 70 percent of its shares would be bought by India while the other 30 percent by the Sri Lankan government.
On Wednesday, Sri Lanka's Cabinet Co-spokesperson Rajitha Senaratne had said the joint venture agreements for the two "white elephant" (Hambantota Port and Mattala Rajapaksa Airport) entities were part of Sri Lanka's balancing act between India and China.
"The real issue here is the diplomatic issue. It really doesn't matter who we give as they are investments. We are trying to balance. When we have given one to India and the other to China," Rajitha Senaratne said when asked if aligning with Chinese investments would pose diplomatic issues for the country.
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Hambantota Port's location at the southern tip of the island nation makes it a major commercial and strategic asset for China from where it can keep an eye on the movement of ships passing through one of the world's busiest shipping routes.
Many observers contend that China will eventually establish a maritime presence at the port.
Earlier this week, media reports suggested that China was considering gifting a frigate to the Sri Lankan Navy, which would be the largest naval asset to date for Sri Lanka.