JICA’s suspension of funding halts BIA expansion project by Taisei

Th e B a n d a r a n a i ke International Airport (BIA) expansion project funded by the Japanese International Corporation Agency (JICA) has been suspended temporarily as t he Government is not in a position to repay the loan. The project drew controversy recently over allegations that a minister was involved in a bribe, a charge hotly denied by Japanese authorities.

JICA has decided to halt the funding of US$570 million for the Terminal- 2 construction of the BIA Development Project (BIADP) Stage 2 compelling the contractor Japanese Taisei Corporation Sri Lanka Ltd to suspend the work till the finalisation of Sri Lanka’s debt restructuring process, Aviation Ministry sources confirmed. In April, Sri Lanka suspended all foreign loan repayments and working with international parties on a debt restructuring programme.

In addition the Tai s e i Corporation has faced difficulties in the procurement of necessary materials for the construction work and high costs owing to the current economic situation in the country, a senior official of the ministry said.

Due to the prevailing situation in Sri Lanka, unavailability of fuel and other materials, the project has been suspended temporarily; therefore the management has decided to terminate the employment agreement of workers on the project, Taisei Corporation confirmed.

However the Aviation Ministry is to persuade JICA to continue funding considering the importance of the project for Sri Lanka as an urgent matter on the directions of Minister Nimal Siripala de Silva, who was reinstated in his post after a Presidential committee exonerated him of allegations of any bribe-taking

Denying the bribe allegations, General Manager of Taisei Corporation Sri Lanka Maskato Sato said that he was shocked to hear such unfounded allegations.

According to the JICA, the construction of the new passenger terminal building is expected to be completed in 2024. The terminal building would be developed based on the concept of an EcoAirport, with Japanese advanced technology and know-how. After the completion of the terminal, BIA is expected to handle 15 million passengers per annum. A new apron and taxiways were unveiled under the BIA Expansion project recently.

The JICA’s total financing for the expansion has been provided under the Special Terms for Economic Partnership.

The loan facility has been granted on concessionary terms, with 0.1 per cent p.a. interest and a 40- year repayment period to promote technology transfer, build quality infrastructure and economic cooperation between Sri Lanka and Japan, JICA sources said.

The JICA’s total financing for the expansion has been provided under the Special Terms for Economic Partnership.