Daily Times

COLOMBO: Sri Lanka said on Thursday that it plans to reduce its foreign debt – by $1 billion – by privatising former president Mahinda Rajapakse’s ‘vanity projects’.

Prime Minister Ranil Wickremesinghe told the parliament that he wanted to privatise a $1.3 billion port and a $210 million airport in Rajapakse’s constituency.

“By turning the debt into equity and forming a public-private partnership to run the airport and the harbour, we will reduce our foreign debt by a billion dollars,” Wickremesinghe said.

He did not disclose whether any investors had been lined up for the facilities built with Chinese loans. Only one airline operates flights to the airport in the sparsely-populated area while the harbour is also one of the emptiest in the world, he said.

The new government which came to power in January last year has been trying to renegotiate terms of its $8 billion Chinese debt – which includes the construction costs of the airport and the harbor. However, it has not succeeded.

The new government also secured a $1.5 billion bailout from the International Monetary Fund (IMF) in June after facing a balance of payments crisis and has also negotiated cheaper funding from international lenders.