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Airport terminal contractor to bid adieu to Sri Lanka? 

27 Jul 2022

  • Japan’s Taisei Corp. plans exit amidst local economic woes
  • AASL attempting to convince contractor to stay on board
  • Only 25% of Terminal II project completed so far
By Madhusha Thavapalakumar and Imesh Ranasinghe Japan-based Taisei Corporation, the contractor for the Bandaranaike International Airport’s (BIA) Terminal II project, which has been mired in many complications since the launch of the initial project, is planning to exit Sri Lanka amidst the ongoing economic crisis, The Morning Business exclusively learns.  Reliable sources confirmed to The Morning Business that with the Terminal II project nearing just one-fourth of its completion, the contractor is planning to exit the country even though Airport and Aviation Services Sri Lanka (AASL) seems hesitant to let the contractor go, and is in the process of convincing Taisei to stay onboard. Speaking to The Morning Business, AASL Chairman Maj. Gen. (Retd.) A. Chandrasiri stated that AASL is holding discussions with Taisei Corporation on the matter, but refused to provide further details, as the involvement of both countries in the matter required confidentiality. However, Secretary to the Ministry of Ports, Shipping, and Aviation K.D.S Ruwanchandra told The Morning Business that Taisei Corporation has “not yet officially informed” them of leaving the terminal project to the Sri Lankan Government, but added that there is a possibility the project being terminated, considering the economic situation in the country. However, he added: “There is no termination for the time being.”  Further, a highly placed source also confirmed to The Morning Business that Taisei has not informed the Government of leaving the project, although the official added that there had been many obstacles in the past few months in facilitating Taisei to continue its construction work amidst the fuel crisis. “Although there are concerns over the current economic situation of the country, I hope they will not leave,” the official said. The Morning Business was unable to reach Taisei Corporation for comment, as attempts to reach their office in Sri Lanka proved futile.  Less than a week ago, AASL told The Morning Business that 25% of the Terminal II project had been completed thus far. Gen. Chandrasiri stated that they have their own system in place to obtain fuel, as the airport requires a steady supply.  “The Sri Lanka Ports Authority (SLPA) has its own fuel mechanism, and similar to that, we also have our own system now. The situation is indeed bad, but we are managing well,” he added. Further, he stated that the project would not be terminated, as it had already commenced and is interconnected with other ongoing expansionary projects at the BIA. He noted that if they are to stop the terminal project, the entire expansionary project would have to be stopped.  “We are not going to stop any of this work. We are managing with what we have. Everyone is going through the same issues, but we are not closing down the airport,” he added.  Taisei is one of the two contractors who bid for the Terminal II project that is being funded by the Japan International Co-operation Agency (JICA). The loan agreement of Rs. 56 billion was signed over four years ago on 24 March 2016. The project was long delayed due to issues between Sri Lanka and JICA, as the bid made by the Japanese contractors was significantly higher than the engineers’ estimate. As both Sri Lanka and JICA took years to settle this issue, an interim terminal for the interim period was planned, but that too hit a dead end due to legal issues, eventually leading the Government of Sri Lanka and JICA to settle bidders’ price issues. The project was finally commenced in November last year.   


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