Sri Lanka’s loss-making Mattala Rajapaksa International Airport will need a complete overhaul if it wants to attract investors, analysts warn, after a 30-year lease agreement with an Indo-Russian joint venture failed commercially.

The nation’s second international airport, built with Chinese loan, is located near a wildlife sanctuary on the island’s southern coast. It has no regular flights.

Since opening in 2013, the small airport has failed to generate enough revenue to cover even its electricity bills – and has been straining state coffers.

“It was a vanity project from the outset by the former prime minister, after whom it is named, who borrowed heavily from China to fund its construction,” said Gary Bowerman, an Asia travel, tourism and consumer analyst.

“It was sold on the basis of its proximity to the Hambantota port and Chinese developments around it, but it is a heavily commercial port without much cruise traffic.”

Hambantota International Port is a major deepwater, artificial seaport in southern Sri Lanka, designed as a strategic maritime industrial hub to complement Colombo Port. It was developed with significant Chinese investment and is often linked to Beijing’s Belt and Road Initiative, offering maritime, industrial and energy services.