Tourism reopening: 35 Airlines come on board


As Sri Lanka opened its shores for all international travellers from Thursday (21) onwards, 35 airlines have expressed their willingness to operate flights from and to Sri Lanka, according to Minister of Tourism Prasanna Ranatunga.

During a press conference held to mark the reopening of the country for all international travellers, Ranatunga stated that although prior to the pandemic about 80 airlines were operating to and from Sri Lanka, it might take a couple of months to get those airlines back on board.

“Sri Lanka tourism will take about six to seven months to recover,” Ranatunga added.

Construction of first phase of BIA’s Export Terminal 2 commenced


The construction of the first phase of the Bandaranaike International Airport’s Export Terminal 2 commenced recently taking forward the airport development projects.

Tourism Minister Prasanna Ranatunge stated at the occasion, “During the course of one or two years, when we have moved past the present pandemic, we will need to cater to the large amount of tourists arriving to Sri Lanka. We have now initiated the first phase to construct the second Export Terminal, which will help us achieve that goal and develop tourism in our country.”

State Minister of Aviation and Export Zones Development D. V. Chanaka stated, “The time allocated to pass through the Terminal has been reduced from three hours to one and a half hours at the Terminal 2, with the use of One-stop shops and scanners on both sides. The collective effort of the Airport and Aviation Services and the Civil Aviation authorities has been put into this project. This is expected to generate a revenue of Rs. 360 million for the Airport.”

It was further stated that an agreement has been reached with the relevant construction company to complete the project within 730 days.

Sri Lanka to complain to Government of Japan on delay in Airport Development Project



Feb 21, Colombo: A decision has been made to lodge a complaint with the Government of Japan regarding the Japanese contractor who continues to delay the completion of the B package of the Bandaranaike International Airport Development Project.

Tourism Minister Prasanna Ranatunga instructed the Secretary to the Ministry to inform the Japanese Ambassador to Sri Lanka regarding the delay in completion of the work at the progress review meeting of the Airport Development Project.

The progress review meeting of the project which commenced in November last year under the patronage of the Prime Minister Mahinda Rajapaksa was held Friday (19) under the patronage of Minister Ranatunga at the Katunayake Bandaranaike International Conference Hall.

At the meeting, the Minister advised the relevant contractor that the work on this project should be completed on time and emphasized that the benefit of such development projects should be given to the country and the people and necessary steps should be taken for that.

The two-part project consisting of ‘Package A’ and ‘Package B’ is funded by Japan International Cooperation Agency (JICA). In 2014, the Government of Japan provided a loan of 74,394 million Japanese Yen (131.5 billion rupees) for the Bandaranaike International Airport Development Project following an agreement reached between then President Mahinda Rajapaksa and the Prime Minister of Japan Shinzo Abe.

The Airport and Aviation Services (Sri Lanka) (Private) Limited will spend 21.645 billion rupees. The cost of the 'A' package is 108 billion rupees and the estimated cost of the B Package is Rs. 06 billion.

Under the first phase (Package A), buildings connected to the main terminal building, passenger bridges, storm water drainage system, elevated roads, electricity, water supply and sewerage system, combustion engines and integrated machinery, and a 5-storey car park will also be constructed. Under the second phase (Package B), the machinery, access road, retention pond and storm water drainage system will be constructed.

A Japanese contractor is in charge of the construction of this B package, which was launched on April 27, 2017. It was scheduled to be completed in October 2019.

Its construction was delayed due to various reasons and on several occasions the Airport and Aviation Services took steps to give it extra time. After the last extension, the project is expected to be completed and handed over in February this year.

During the discussion with the Minister, the Japanese contractor requested further time citing various reasons and the Minister refused the request.

"This is not an aid. It is a loan. We have already been given one and a half year to complete this project. We have to pay the debt without any income. We told several times to speed this up. But it’s being delayed citing various other reasons. This is public money. Therefore, we have a responsibility to see it is done properly. Therefore, we will lodge a complaint with your government. We will take further action accordingly,” the Minister strongly emphasized.

S. Hettiarachchi, Secretary to the Ministry of Tourism, Madhava Devasurendra, Secretary to the State Ministry, Sunil Gunawardena, Additional Secretary, Major GA Chandrasiri, Chairman, Airport and Aviation Services, Rajiv Sooriyarachchi, Vice Chairman, and representatives of the Contractor and advisers were also present at the discussion.

Japan's JESCO to install electric gear for Sri Lanka airport expansion

Japanese engineering and construction company JESCO Holdings Inc. has won a contract worth some 3.5 billion yen ($32.9 million) to install electrical equipment for the expanded portion of a terminal building at Bandaranaike International Airport in Sri Lanka. JESCO said Wednesday its wholly owned subsidiary, JESCO Co., has been awarded the contract by Japanese construction giant Taisei Corp., a main contractor for the airport improvement project involving the expansion of the existing terminal.

JESCO will be responsible for a main electrical network, outlets for lighting and a lighting protection system.

The expanded portion, a four-story building with a total floor space of 180,000 square meters, is scheduled for completion in December 2023


Bandaranaike International Airport terminal 2 scheduled for completion in December 2023

BIA Project B contractor to pay penalty to SL Govt.


The Japanese contractor, which has been significantly delaying the completion of Project Package B at the Bandaranaike International Airport (BIA), is expected to pay penalties to the Sri Lankan Government for the delay, The Sunday Morning Business learns.

The penalty comes amidst the fund provider of the project, Japan International Co-operation Agency (JICA), remaining somewhat firm in not delaying the recovery of the loan it provided the Sri Lankan Government to undertake the said project.

Airport and Aviation Services Sri Lanka Ltd. (AASL) Chairman General G.A. Chandrasiri told The Sunday Morning Business that Sri Lanka does not have to pay any penalties to JICA due to the delay in completing the project.

“Why should we pay compensation to them? The contractor is paying compensation to us. As per the contract agreement, they have already passed the deadline. So we are getting penalties from them for not doing it in time,” Chandrasiri added.

We learnt that it is highly unlikely that JICA would waive the commitment fee that Sri Lanka is currently paying and would continue to pay until the completion of Package B, even though the delay in completion is not from the side of the Sri Lankan authorities. Yet, Sri Lanka might use the penalty the Japanese contractor would pay to them, to settle these late charges.

“This is a set of loans. If we are to delay recovery, everything has to be scheduled back. If JICA is to reschedule, it should go to the Paris Declaration as well. This matter has already been explained to the Sri Lankan authorities. It is unlikely this will be rescheduled,” our sources at the JICA local office told us two weeks ago.

Expansion Project B of the BIA, which includes new aircraft parking bays, a retention pond and stormwater drainage system, and an access road, was initially scheduled to be completed in October last year. Nevertheless, due to a number of reasons, the project is a couple more months away from being completed.

Speaking to us, Ministry of Tourism Secretary S. Hettiarachchi two weeks ago stated that BIA Project Package B is already four months behind schedule, yet they gave the Ministry until August this year to complete the project.

“What happened here was there was an independent Sri Lankan consultant for this project. The contractor had not obeyed or followed instructions provided by this consultant. As a result, they had to demolish certain constructions they already completed. In addition to this, some sort of polyethylene sheets they bought for construction had also expired and they informed us that they need some time to import them again,” Hettiarachchi added.

He added that even though the demolishing and rebuilding do not have a financial impact on Sri Lanka, as the cost of the project is fixed, the delay in completing Project Package B is weighing down the progress of the other expansion project packages at BIA, which are going in parallel to Package B.

“We feel like this particular Japanese company is not taking this project seriously, as for them this project is like a ‘peanut’, given the history of their big infrastructure projects globally,” Hettiarachchi further noted.

According to a media spokesperson of the Ministry of Tourism, the cost of Package B is $ 6 billion and it was started in 2017.

The loan agreement is JICA’s 45th loan package to Sri Lanka. JICA is the executing agency for official development assistance (ODA) of the Government of Japan and is one of the largest contributors towards development assistance in Sri Lanka.

The project would be developed based on the concept of eco-airports with the utilisation of Japanese advanced technology and knowhow. In order to promote technology transfer and economic co-operation between Sri Lanka and Japan, JICA’s loan is provided under the Special Terms for Economic Partnership (STEP), with 0.1% p.a. interest and a 40-year repayment period.

In March last year, the JICA office in Sri Lanka confirmed to us that the Sri Lankan Government has been paying commitment charges every six months for eight years for a loan agreement signed in 2012 with JICA. It has also been paying a front-end fee every six months for another loan agreement with JICA signed in 2016. Both of these loans were obtained for the development of BIA, Sri Lanka’s main airport.

A commitment fee is a fee that is charged by a lender from a borrower to compensate the lender for keeping a credit line open. The fee also secures a lender’s promise to provide the credit line on the agreed terms at specific dates, regardless of the conditions of the financial markets. A front-end fee is paid to a banker for setting up a transaction. It is usually calculated as a percentage of the value of the loan.

AASL denies it gained approval for lotus shape

• Discussions underway
• Approval yet to be sought

Amidst reports that the Government has decided to change the external appearance of the ongoing Terminal II project at the Bandaranaike International Airport (BIA) to the shape of the lotus flower, Airport and Aviation Services (Sri Lanka) Ltd. denies obtaining any such approval.

Nevertheless, speaking to The Sunday Morning Business, AASL Chairman Maj. Gen. (Retd.) G.A. Chandrasiri stated that there is a plan to change the external appearance of the new terminal to the shape of the lotus flower, yet added that it is “not a necessity”, as they are to go ahead even with its currently proposed shape of the banana leaf.

“So far, we have not received approval from the authorities for the lotus flower shape. It is an option that we are considering at the moment. Discussions are underway to obtain the approval and we are preparing the required documents for it,” Chandrasiri added.

Furthermore, he stated that since the change in the proposed shape is just a plan, reports stating that the change would cost an additional Rs. 35 million are baseless.

It is learnt that the lotus flower was the initial shape of the terminal that was planned under the Government led by current Prime Minister Mahinda Rajapaksa in 2012, which was then changed to the shape of a banana leaf under the Government led by Maithripala Sirisena.

After years of delay due to various issues, the Terminal II project began late last year and is expected to be completed within three years to cater to a combined passenger capacity of 15 million per year.

The Japan International Co-operation Agency (JICA) is the concessionary loan provider for the new terminal at BIA. The loan agreement of Rs. 56 billion was signed five years ago on 24 March 2016 even though this project was part of a lengthy expansionary project that kicked off under the Government of Mahinda Rajapaksa.

The new terminal building would feature the addition of 96 check-in counters, eight baggage claim belts, seven baggage makeup carousels, 16 contact boarding gates with 28 passenger boarding bridges, and six bus gates. The scope also includes capacity enhancement of the incinerator, water treatment plant, and sewerage treatment plant.

The BIA has been in dire need of another terminal for years now. It had more than 170 aircraft movements per day, including an average of more than 60 movements of heavy aircraft per day in 2018. The existing six million-passenger terminal handled 10 million passengers in 2018, resulting in hours of delays, particularly as passengers were trying to collect their baggage.

According to the annual reports of AASL, the airport experienced heavy congestion in the arrival and departure zones, as well as vehicular traffic, particularly during peak hours; all while passenger arrivals grew 5-6% year-on-year (YoY).