• Loan obtained for BIA terminal expires in 2023
• Agreement was entered in 2012; terminal to be completed in Apr. 2023
• SL so far paid JICA Rs. 328 m as late fees

    By Imesh Ranasinghe The Ministry of Tourism and the Airport and Aviation Services (Sri Lanka) Ltd. (AASL) is looking to reschedule one of the loans obtained by the Japan International Co-operation Agency (JICA) for the “Package A”-related terminal building and associated work at the Bandaranaike International Airport, Katunayake (BIA), The Sunday Morning Business learns. Accordingly, the JICA loan worth Rs. 36 billion, which the AASL obtained through a loan agreement in 2012, for phase two of the BIA development project, has a grace period of 10 years, which ends in 2023. After that, Sri Lanka should start the repayment of loan installments plus interest. In this backdrop, the Ministry and the AASL have requested the External Resources Department (ERD) to attempt to get the loan rescheduled, after discussing with JICA to get an extension on the grace period, sources confirmed. However, the ERD has denied the request, stating that the Government of Sri Lanka (GoSL) should go for a government-to-government approach with the Japanese Government in order to get the loan rescheduled. Sources said that both the Ministry and AASL were waiting on the Government in that regard. In addition to the aforementioned loan, AASL obtained another loan worth Rs. 56 billion in 2016 for the construction of a new multi-level terminal building, where arrivals and departures would be separated vertically, consisting of two pier buildings. This loan was also obtained for the construction of development “Package A”. Altogether, JICA’s financing for the expansion of the BIA is Rs. 92 billion. Furthermore, the Auditor General’s report for 2020 revealed that the AASL paid a sum of Rs. 328 million as liability fees or commitment charges to JICA by 20 April 2021 due to “Package A” not being implemented on time. Terminal expansion under “Package A” will have a capacity of nine million passengers per annum, bringing the total capacity of the BIA to 15 million. The project was held, as Taisei Corporation – who was the bidder – had put forward an estimate 44% higher than that of the estimate put forward by the engineers. However, following a cabinet decision by the current Government in January 2020 to appoint a technical evaluation committee to negotiate with the contractors, the Government was able to reduce the contractor’s estimate to some extent, and the project was awarded to Taisei through a cabinet decision in February 2020. However, the construction began in December 2020 due to the pandemic. According to sources, a major delay in commencing construction was due to problems involved in getting visa approvals for the project engineer, consultant, and other staff who came from countries such as Japan, Malaysia, India, Pakistan, and China, as approvals were given by the Foreign Ministry rather than the through the Controller General of Immigration and Emigration. Majority of the piling works of “Package A” has been completed by now, as the construction is estimated to be completed by 2023. In 2017, the construction of a new apron and taxiways under “Package B” commenced with an estimated investment of Rs. 7 billion. Although the project was to be completed in 30 months, delays dragged it for five years, until it was completed and opened on 25 November 2021. According to sources, reasons for delays include the pandemic, monitoring issues with the AASL as the client, issues with the contractor and consultant (Japan Airport Consultants), issues with quality, delay in raw materials, and the unavailability of a ministry steering committee to monitor the project. Through “Package B”, the flight slots were increased to 28 from 24, allowing parking spaces for about 48 aircraft.