- Set to seek Cabinet approval to commence piling
- Piling to cost around Rs. 3 billion
Airport and Aviation Services (Sri Lanka) (Pvt) Ltd. (AASL) will be seeking the approval of the Cabinet to commence piling work for the Bandaranaike International Airport (BIA) Terminal II project without waiting until funding is released by the Japan International Cooperation Agency (JICA).
Speaking to The Sunday Morning Business, AASL Chairman Maj. Gen. (Retd) G.A. Chandrasiri stated that the AASL had commenced construction of certain selected works of the BIA Terminal II project about five months ago, pending the release of funds by JICA following the completion of the debt restructuring process.
Accordingly, he revealed that the construction in respect of selected works was scheduled to be completed by the end of 2023.
Commenting further, he revealed that in the absence of any update on when JICA funds would be released, the AASL would be seeking Cabinet approval to commence the piling work for the project. Once Cabinet approval is obtained, a tender will be called for the piling work, which is expected to involve an investment of around Rs. 3 billion.
“We can’t wait until others come and do it [piling work]. We don’t know when the JICA loan is coming, so we will continue with our work,” he stated.
Due to the delay in receiving JICA funds, the AASL will start the piling work for the project using its own funds.
Chandrasiri further revealed that in the immediate aftermath of the suspension of the BIA Terminal II project after JICA funds ceased following Sri Lanka’s foreign debt moratorium, the AASL had taken steps to commence maintenance work at the site.
The contract for the construction of the BIA Terminal II project involving the construction of a multi-level terminal, was valued at $ 564 million and was awarded to the Taisei Corporation in 2020. According to JICA terms, the contractor must be Japanese. However, following the stoppage of construction work last year due to the funding freeze imposed by JICA in the wake of Sri Lanka’s default, Taisei Corporation terminated its contract with Sri Lanka.
The construction of this multi-level terminal is part of ‘Package A’ of the BIA expansion project, which is estimated to cost Rs. 133 billion and will be largely funded by the Special Term for Economic Partnership (STEP) concessionary Official Development Assistance (ODA) loan granted by JICA amounting to Rs. 131.5 billion (¥ 74.4 billion) at a 0.1% interest rate per annum. The remaining Rs. 21.5 billion is being funded by AASL.
With regard to Package A, the AASL entered into two agreements with JICA – the first agreement was entered into in March 2012 for ¥ 29 billion and the second agreement was entered into in March 2016 for ¥ 45.4 billion.