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Grounded BIA project likely to take off with AASL funds
View(s):By Damith Wickramasekara
The Government is considering a proposal to continue the stalled Bandaranaike International Airport expansion project with funds from the Airport and Aviation Services Limited (AASL) to avoid paying hefty monthly penalties to the Japanese contractor.
The Aviation Ministry, meanwhile, has observed that it will be far cheaper to terminate the contract awarded to Japan’s Taisei Corporation for the project and look for alternatives if it remains suspended for a lengthy period. The USD 1 billion project, known as the Bandaranaike International Airport Development Project Phase II Stage 2 (BIADP PII S2), has remained suspended since July this year after the Japan International Corporation Agency (JICA) decided not to make further disbursement of funds for the project, citing the inability of the Sri Lankan government to repay the loan.
The suspension is costing Sri Lanka heavily, with Rs. 1.5 billion having to be paid each month as commitment charges. The government currently owes Rs. 9.5 billion to Taisei Corporation as commitment charges.
The ministry had earlier submitted a Cabinet Paper proposing to continue the project using funds belonging to the AASL as a temporary measure until JICA decides to resume the disbursement of further funds. The Cabinet appointed a sub-committee to study the proposal and its recommendations are to be submitted at the next Cabinet meeting, Aviation Ministry Secretary K.D.S. Ruwanchandra told the Sunday Times.
He said the ministry did not wish for the project to be delayed and that the Rs. 1.5 billion the Government had to pay each month for a project which was not moving was a waste of precious funds. As such, the ministry hoped that the Cabinet would allow the project to proceed for now with AASL funding.
The Finance Ministry, meanwhile, has also approved an allocation of Rs. 700 million to continue essential maintenance on the project site.
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