• Interim terminal abandoned after lawsuit
• New committee to negotiate with JICA
• Terminal to hold nine million passengers

By Madhusha Thavapalakumar Plans for the construction of a second terminal at Bandaranaike International Airport (BIA) have been renewed in hopes of completing construction by 2022, The Sunday Morning Business learnt. The terminal, which was delayed by years due to cost concerns, will now be fast-tracked with a committee appointed to resolve said concerns, according to a senior Airport and Aviation Services (Sri Lanka) Ltd. (AASL) official. The renewed focus on the second terminal comes as the plan of constructing a smaller terminal in the interim to compensate for the delay of the main terminal has been abandoned due to a legal battle. Accordingly, the committee appointed by AASL hopes to negotiate a lower cost with the Japanese bidders, with a 2022 timeline in mind. Japan International Cooperation Agency (JICA) is the fund provider of the project, and one of its main conditions was that the construction be given to a Japanese company. Sri Lanka received two proposals from Japanese bidders in which they had quoted 46% and 96% higher than the engineer’s estimate. However, now the negotiation committee is expected to hold discussions with the bidder who quoted 46% higher, in hopes of bringing it down, while negotiating with JICA to relax the conditions of its loan. The negotiations are expected to be wrapped up by the end of October. However, at the negotiations, it would not be attempted to amend any other terms of the existing agreement with JICA. Our source told us that it is a bit premature to disclose the additional costs the Sri Lankan Government has incurred so far due to the delays. The BIA has more than 170 aircraft movements per day, including an average of more than 60 movements of heavy aircraft per day. The existing six million-passenger terminal handled 10 million passengers in 2018, resulting in hours of delays – particularly as passengers were trying to collect their baggage. According to the annual reports of AASL, the airport experiences heavy congestion in both arrival and departure zones, as well as vehicular traffic, particularly during peak hours, and passenger arrivals grow 5-6% year-on-year. The new terminal is expected to be up by 2022 and will handle a passenger capacity of nine million as initially planned, bringing the total BIA terminals’ capacity to 15 million. The AASL would stick to their initial capacity plans even though the terminal is likely to be filled to capacity after a year or two of its opening due to the delays. However, AASL believes that any changes to the original plan at this moment would delay the construction of the permanent terminal even further. It may go for a long-term solution to the capacity issue in the future. The new terminal building would feature the addition of 96 check-in counters, eight baggage claim belts, seven baggage make-up carousels, 16 contact boarding gates with 28 passenger boarding bridges, and six bus gates. The scope also includes a capacity enhancement of the incinerator, water treatment plant, and sewerage treatment plant. Interim terminal The $ 800 million permanent terminal was planned in 2016 and was expected to be in operation by 2020, but was deferred as the bids from the Japanese companies were far higher than the engineer’s estimate. Therefore, an interim terminal was planned with a passenger capacity of two million. The $ 18 million interim terminal project was set to take off when the Cabinet of Ministers gave approval for it to be awarded to China State Construction Engineering Corporation (CSCEC) on 3 October 2018. However, due to an appeal by Maga Engineering (Pvt.) Ltd., the work did not commence. Maga – one of the six companies which bid for the construction of the interim terminal – scored the highest points in the evaluation, and was recommended by the Standing Cabinet Procurement Committee to be awarded the project. However, on an appeal by the CSCEC, the Procurement Appeal Board overturned this decision and awarded it to the Chinese company, which subsequently received Cabinet approval. Following the awarding of the project to CSCEC and the Cabinet approval, Maga appealed to the Supreme Court in October last year. Even though a verdict has not been arrived at on this issue, reliable sources told The Sunday Morning Business that it would be abandoned eventually. JICA loan According to JICA, the concessionary loan agreement of approx. Rs. 56 billion was signed on 24 March 2016 between AASL and JICA for the construction of Terminal 2. The loan agreement is JICA’s 45th loan package to Sri Lanka. JICA is the executing agency for Official Development Assistance (ODA) of the Government of Japan, and is one of the largest contributors for development assistance in Sri Lanka. The project would be developed based on the concept of eco airports with the utilisation of Japanese advanced technology and knowhow. In order to promote technology transfer and economic co-operation between Sri Lanka and Japan, JICA’s loan is provided under the Special Terms for Economic Partnership (STEP), with 0.1% p.a. interest and a 40-year repayment period.