US sanctions Indian firm involved in deal with Sri Lanka’s Mattala airport
ECONOMYNEXT – The United States has sanctioned an Indian firm which is in a consortium with a Russian firm to manage Sri Lanka’s Mattala Airport, official data showed.
The U.S. Department of the Treasury sanctioned India-based Shaurya Aeronautics Private Limited (Shaurya) last week among 275 individuals and entities involved in supplying Russia with advanced technology and equipment that it desperately needs to support its war machine.
“Today’s action targets both individual actors and sprawling sanctions evasion networks across 17 jurisdictions, including India, the People’s Republic of China (PRC), Switzerland, Thailand, and Türkiye,” the U.S. Department of the Treasury said in a statement.
“In addition to disrupting global evasion networks, this action also targets domestic Russian importers and producers of key inputs and other material for Russia’s military-industrial base.”
A joint venture between Shaurya Aeronautics and Airports of Regions Management Company of Russia has won the contract to manage Sri Lanka’s Chinese-built Mattala Airport for 30 years.
The previous Sri Lanka government under former leader Ranil Wickremesinghe had approved the 30-year deal to hand over its Chinese-built airport operations to the consortium, despite the U.S. having informed about a US sanction on the key stakeholder of the Moscow firm.
“India-based Shaurya Aeronautics Private Limited (Shaurya) has sent shipments to Russia of high-priority dual-use technology, including radar apparatus, radio navigational aid apparatus and radio remote control apparatus, and electrical apparatus for switching,” the U.S. Department of the Treasury said.
“Shaurya is being designated pursuant to E.O. 14024 for operating or having operated in the technology sector of the Russian Federation economy.”
SRI LANKA TO REVIEW DEAL
Former Aviation Minister Nimal Siripala de Silva in July said the U.S. approached the Sri Lankan government to inform that the key stakeholder of Russia’s Airports of Regions Management Company was sanctioned by the US treasury in 2018 for suspected meddling in the 2016 U.S. elections.
The former minister said Sri Lankan authorities checked the U.S. claims and found it was “only a rumour” and despite requests the U.S. officials based in Sri Lanka were unable “to furnish evidence”.
However, later former Foreign Minister Ali Sabry before the September 21 presidential poll had said the deal was to be reviewed. Newly elected President Anura Kumara Dissanayake’s government also has said it will review the deal after November 14 parliamentary polls.
The airport, built at a cost of $209 million, was once dubbed the “world’s emptiest airport” because of a lack of flights. It has been incurring a loss of 3 billion rupees (US$10 million) annually.
The airport is strategically located close to the Hambantota on the southern coast of Sri Lanka where China operates a port on a 99-year lease and also Sinopec is building a US$5 billion refinery.
It has been used sparingly when flights are unable to land in the country’s main airport at Katunayaka, 30 km north to Colombo.
Airports of the Regions, the Russian firm in the joint consortium, is a large airport holding in Russia.
Until 2021, the strategic investor of the company was Renova Group of Companies, owned by Viktor Felixovich Vekselberg, a Ukrainian born Russian who was sanctioned by the US treasury in 2018 for suspected meddling in the 2016 U.S. elections.
In 2021, however, Vekselberg transferred control over the management company “Airports of the Regions” to a former top manager of Renova, according to media reports.
Sri Lanka used Mattala airport to attract more Russian and Ukrainian tourists soon after the Covid-19 lock down.
Under the 2015-2019 previous government, this airport was offered to India with an aim to boost Indian cultural tourists into Sri Lanka. However, the discussion with India to operate the airport did not succeed.⍐
(Colombo/November 07/2024)
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