May 11 (Bloomberg) -- Sri Lanka's fastest economic growth in 30 years is threatened by a Tamil rebel air wing that attacked oil and gas plants near the capital, Colombo, and forced the international airport to close at night.
The Liberation Tigers of Tamil Eelam, flying light aircraft 200 kilometers (120 miles) from the north of the island, evaded air defenses and bombed Royal Dutch Shell Plc and Indian Oil Corp. plants and an air force base in two raids since March.
``Sri Lanka's risk profile has gone up and potential investors now need to factor that in,'' said Rimoe Saldin, finance director at Shell Gas Lanka Ltd., the country's largest retailer of liquefied petroleum gas. ``This is a new dimension that has to be assessed.''
The two-decade-long conflict in the South Asian island has been waged in the north and east of the country, far from industries that drive the $26 billion economy. The air unit, which the military says consists of five propeller-driven aircraft, has brought Colombo within striking distance of the rebels and raised questions about defense capabilities.
``The fact that the LTTE were able to fly undetected and weren't shot down is of huge concern,'' said Ravi Abeysuriya, managing director of Amba Research Lanka Ltd., an investment research outsourcing company with offices in Colombo and also in Singapore, Costa Rica and India.
President Mahinda Rajapaksa, who increased spending on the Army, Navy and Air Force by 44 percent this year to a record 139 billion rupees ($1.3 billion), said in March the air unit threatens Sri Lanka and the region.
International Assistance
Rajapaksa said he sought the help of the international community in achieving peace when he met U.S. Assistant Secretary of State Richard Boucher in Colombo yesterday, according to the government's Web site.
``We stand with the people of Sri Lanka against terrorism,'' Boucher said at a news conference yesterday, according to the government's Media Center for National Security. ``The government has every right to stop the air raids by the LTTE. We are against them, they should stop.''
The Tamil Tigers are fighting for a separate homeland in a conflict that has killed more than 60,000 people. A 2002 cease- fire collapsed last year and two rounds of talks in Geneva failed to restart the peace process.
The rebels have an estimated 12,000 fighters, including a naval force, and revealed their new air wing in a March 26 attack on the Katunayake airbase about 30 miles from Colombo that killed three air force personnel.
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