Another Chinese Investment Turns Sour In Sri Lanka

Sri Lanka's second international airport which was financed with Chinese loans was left without a single scheduled flight from Friday after the only airline using the remote facility scrapped its daily service.

Dubai's flydubai gave no reason for the pullout from Mattala International, built by former strongman president Mahinda Rajapakse and financed with Chinese loans.

The airport -- a five-hour, 250-kilometre drive from the capital Colombo -- is located inside a wildlife sanctuary and smack in the middle of a migratory route for birds.

Several aircraft have hit birds since it opened in 2013 and two years ago the military deployed hundreds of troops to clear deer, wild buffalo and elephants off the sprawling facility.

The airport, which cost an initial US$210 million and employs some 550 workers in Rajapakse's home district, has failed to generate enough business to pay staff, let alone make a profit.

Rajapakse's administration had offered hefty concessions and initially attracted Air Arabia -- which pulled out after only a few weeks -- and flydubai.

Even Sri Lanka's national carrier Sri Lankan Airlines stopped flying to Mattala in 2015 saying the move saved them US$18 million annually.

Mattala will however remain an emergency alternate landing location for flights heading into Colombo International.

Other Chinese investments have also turned sour for the island nation, leading the Sri Lankan government to warn last month of a looming debt crisis as it struggles to pay back the loans.

Last August, China took over the loss-making deep-sea port of Hambantota in the south of Sri Lanka on a 99-year lease under a US$1.1 billion deal.

China has also lent other countries in Asia and further afield vast amounts of money for infrastructure projects being built under President Xi Jinping's signature Belt and Road initiative.

In April the International Monetary Fund warned China about saddling other countries with a "problematic increase in debt". (AFP)