(COLOMBO, LANKAPUVATH) – The bilateral loan agreement between the Sri Lankan and Japanese Governments has no conditions on compensation or penalties to be paid in case of delay or cancellation of the Japan International Cooperation Agency (JICA)-funded Colombo Light Rail Transit (LRT) project, Urban Development, Water Supply and Housing Facilities Ministry Secretary Dr. Priyath Bandu Wickrema said.
Commenting on the lead news of a daily Sinhala newspaper (Not of the Lake House Group) published on June 23, the Secretary denied the claim that the Government of Sri Lanka (GoSL) will have to pay compensation of US$ 100 million along with a penalty of Rs. 1 million to the Japanese Government if the proposed project is suspended.
He was speaking to the media at a press conference held at the Government Information Department yesterday.
According to him, under the first phase, the JICA had allocated US$ 280 million to initiate the project but only about US$ 20 million has so far been used. Therefore, only that amount will have to be paid back by the GoSL if the project is cancelled.
In addition, he said the Government has an agreement of US$ 130 million with a foreign consultancy firm hired for the project on a time-based contract and compensation will have to be paid only for them but, currently it is being planned to effectively use those services on another project to save money.
Acquisition of lands for the US$ 2.2 billion Colombo LRT project from Malabe to Colombo Fort was initiated in 2019 and the construction was to be completed between the 2020-2024 and commercial operations commenced by early 2025.
However, Co-Cabinet Spokesman Minister Dr. Bandula Gunawardhane last week said the Government has decided to halt the project as it is too costly and brings low returns. ”The project was not cancelled by JICA but, by the government of Sri Lanka”, he also said.
The first 15.3 km-long LRT system with 16 stations was planned to be constructed via Battaramulla with elevated railway tracks, elevated stations and a depot for utility purposes. The estimated travel time from Colombo Fort to Malabe was 27 minutes. Solely powered by the electricity, each light train with four compartments would have the capacity of 165 passengers per journey.
However, Secretary Wickrema said while the government is planning to utilize the JAICA loan for another effective project in the country, LRT project is expected to be executed under a Public-Private Partnership (PPP) as a foreign investment with more benefits at a reduced-cost. The project is also expected to be finished on the scheduled time with no delays he, added. The Sri Lankan government will have talks with the Japanese government and the JICA in that regard, he said.
An investor will be selected through the international open competitive bids and no special interest on China; he stressed and added that the RFPs will be called before end of this year.
He also said that there would be several changes to the existing project plan to make it more effective for both the country and the investor, which will include the transfer of the proposed depot from Malabe to Athurugiriya.
The depot has been planned to be built on a marshy land spending a huge amount of money. With the transfer, a new deviation track of eight kilometres will be built from Malabe to Athurugiriya but there will be no change in the estimated cost, he further said.