Japanese construction giant Taisei Corporation is under scrutiny after completing only 5.44% of work on a major passenger terminal project at Bandaranaike International Airport (BIA), despite having received the full Rs. 37 billion payment for the contract.
The revelation came from the Committee on Public Enterprises (COPE), which reported the project was expected to be 30% complete by now. Funded by the Japan International Cooperation Agency (JICA), the project falls under Package ‘A’ and includes the construction of a new terminal building and related infrastructure.
Project Halted Over Debt Policy
Progress on the project came to a halt in December 2022 after JICA suspended loan disbursements. This move was in response to the Sri Lankan Ministry of Finance’s “Interim Policy on Servicing of Sri Lanka’s External Public Debt,” issued in April 2022 amid the country’s ongoing financial crisis.
As a result, Airports and Aviation Services (Sri Lanka) (Private) Limited (AASL) paid the contractor in full despite construction work coming to a standstill—raising serious concerns about oversight and contract management.
COPE also highlighted that the construction freeze has led to additional costs of Rs. 1.3 billion and that Rs. 1.55 billion worth of materials and equipment procured for the project are currently stored in private warehouses owned by subcontractors.
Work to Resume in July 2025
Following Japan’s decision to resume development aid to Sri Lanka, the stalled terminal project is now scheduled to restart in July 2025, nearly three years after it was halted.
COPE further questioned the logic of maintaining high-cost storage facilities and noted potential monthly savings of Rs. 392,904 if Taisei’s incinerator is moved to a more economical location.
With nearly two years already lost on a three-year contract, concerns are growing over project accountability, financial transparency, and the impact of such delays on the country’s infrastructure ambitions.