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Democratic Socialist Republic of Sri Lanka Development Of Report No: ACS18616 Democratic Socialist Republic of Sri Lanka Development of Domestic Airports - PPP Options Study for Private Sector Participation in the Development of the Domestic Airpiort Sector in Sri Lanka Final Report June 22, 2016 Transport and ICT Global Practice South Asia Document of the World Bank Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com/. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Options study for Private Sector Participation in the Development of the Domestic Airports Sector in Sri Lanka – Final Report Options Study for Private Sector Participation in the Development of the Domestic Airports Sector in Sri Lanka – Final Report Financed by the Public-Private Infrastructure Advisory Fund, World Bank Final Report – June 22, 2016 Options study for Private Sector Participation in the Development of the Domestic Airports Sector in Sri Lanka – Final Report Contents Executive Summary .......................................................................................................... 1 1 Introduction 12 1.1 Study Context ......................................................................................................................... 12 1.2 Study Objectives and Scope .................................................................................................. 12 1.3 Study Approach and Study Progress ..................................................................................... 13 1.4 Objectives and Content of this Report ................................................................................... 13 2 Analysis of Enabling Environment for Private Sector Participation in Sri Lanka 15 2.1 Introduction ............................................................................................................................ 15 2.2 Review framework and structure ........................................................................................... 15 2.3 Institutional Framework .......................................................................................................... 16 2.4 Legal and Regulatory frameworks for PSP ............................................................................ 20 2.5 Summary, conclusions and recommendations ...................................................................... 25 2.6 Recommendation for Improvement of Enabling Environment ............................................... 27 3 Sri Lanka’s Tourism Markets 29 3.1 Introduction ............................................................................................................................ 29 3.2 Overview of Current Tourism Sector in Sri Lanka ................................................................. 29 3.3 Sri Lanka within the Tourism Lifecycle ................................................................................... 36 4 Tourism and Transport Development Plans 43 4.1 Introduction ............................................................................................................................ 43 4.2 National tourism and transport strategies .............................................................................. 43 4.3 Key tourism development plans ............................................................................................. 44 4.4 Key transport development plans .......................................................................................... 45 5 Overview of Aviation in Sri Lanka 48 5.1 Introduction ............................................................................................................................ 48 5.2 International Aviation .............................................................................................................. 48 5.3 Domestic Aviation .................................................................................................................. 55 6 Aviation Activity Forecast Methodology 60 6.1 Introduction ............................................................................................................................ 60 6.2 Drivers of Aviation Demand ................................................................................................... 60 6.3 Constraints for Aviation Demand ........................................................................................... 63 6.4 Determining the appropriate passenger forecast approach................................................... 66 6.5 The Forecast Approach.......................................................................................................... 68 7 Sri Lankan National Aviation Forecast 69 7.1 Methodology ........................................................................................................................... 69 7.2 Assumptions ........................................................................................................................... 69 7.3 Sri Lanka’s Aviation Market Demand Today .......................................................................... 72 7.4 National Aviation Forecast ..................................................................................................... 76 7.5 Evaluation of Forecast ........................................................................................................... 79 8 Sri Lankan Domestic Aviation Forecast 83 8.1 Methodology ........................................................................................................................... 83 8.2 From National Tourism demand to Inter-Regional Trip demand ........................................... 84 8.3 From Inter-Regional Trip Demand to Inter-Regional Air Trips ............................................... 88 8.4 Domestic aviation Forecast .................................................................................................... 93 9 Screening and Selection of Domestic Airports 102 9.1 Introduction .......................................................................................................................... 102 9.2 Screening Methodology ....................................................................................................... 102 9.3 Qualitative Screening ........................................................................................................... 103 Final Report – June 22, 2016 Options study for Private Sector Participation in the Development of the Domestic Airports Sector in Sri Lanka – Final Report 10 Selected Domestic airports analysis 109 10.1 Introduction and purpose of analysis for selected airports .................................................. 109 10.2 Investment need assessment .............................................................................................. 110 10.3 Financial Viability of Domestic Airports ................................................................................ 112 10.4 Development of a domestic airport network......................................................................... 114 10.5 Alternative ways to engage private sector in domestic airports ........................................... 115 10.6 Summary and Conclusions .................................................................................................. 117 11 Analysis of AASL 119 11.1 Introduction .......................................................................................................................... 119 11.2 Overview of Current Operations .......................................................................................... 119 11.3 Opportunities for Improvement ............................................................................................ 127 11.4 Case for a Second Runway ................................................................................................. 132 11.5 Evaluation ............................................................................................................................ 133 11.6 Strategy for Mattala International Airport ............................................................................. 134 11.7 Funding Review of AASL ....................................................................................................
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