Sri Lanka said Thursday it will reduce its foreign debt by $1 billion by selling off former strongman president Mahinda Rajapakse's vanity projects.

Prime Minister Ranil Wickremesinghe told parliament he wanted to privatise a $1.3 billion port and a $210 million airport in Rajapakse's home constituency which have become huge white elephants.

"By turning the debt into equity and forming a public-private partnership to run the airport and the harbour, we will reduce our foreign debt by a billion dollars," Wickremesinghe said.

He did not disclose whether any investors had been lined up for the facilities in Rajapakse's home constituency of Hambantota in the island's deep south, which were built with

Chinese loans and named after the former leader.

Only one airline operates flights to the airport in the sparsely-populated area while the harbour is also one of the emptiest in the world.

The new government which came to power in January last year has been trying to renegotiate terms of its $8 billion Chinese debt, which includes the construction costs of the airport and the harbour, but with no success.

The former administration relied heavily on China to build ports, highways and railways as Western nations shunned it over its dismal human rights record.

The new government secured a $1.5 billion bailout from the International Monetary Fund in June after facing a balance of payments crisis and has also negotiated cheaper funding from international lenders.