Sri Lanka’s BIA Terminal I expansion project commences
The Morning: The project to expand the check-in counters and lobby area of Terminal I of the Bandaranaike International Airport (BIA) has commenced, with three further connected projects due to be awarded within the next two months.
The commencement comes as the Government moves to increase the capacity of BIA Terminal I to 10 million passengers per annum.
Speaking to The Sunday Morning Business, Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku said that the Government had granted a one-year project to Maga Engineering Ltd., which involved building 36 check-in counters and a fully equipped lobby area.
He said that Maga had now commenced mobilisation for the project.
The Deputy Minister further noted that there were three more connected projects related to the BIA Terminal I expansion that were scheduled to be awarded, with one expected to be awarded within this month and the remaining two before the end of next month.
“All of these projects are expected to be completed within 12 months,” Kodithuwakku stated.
Commenting on the new BIA Terminal II project, which remains stalled after the previous contractor abandoned it during the payment freeze precipitated by Sri Lanka’s sovereign default, he said that they were at the final stage of selecting the contractor from the two bids received.
The contract for the construction of the BIA Terminal II project, which involves the construction of a multi-level terminal, was valued at $ 564 million and was initially awarded to the Taisei Corporation in 2020.
However, following the stoppage of construction work in 2020 due to the funding freeze imposed by the Japan International Cooperation Agency (JICA) following Sri Lanka’s default, the Taisei Corporation terminated its contract with Sri Lanka.
The construction of the multi-level terminal is part of Package A of the BIA expansion project, which was initially estimated to cost Rs. 133 billion and was to be largely funded by the Special Terms for Economic Partnership (STEP) concessionary Official Development Assistance (ODA) loan granted by JICA, amounting to Rs. 131.5 billion (¥ 74.4 billion) at a 0.1% interest rate per annum.
The remaining Rs. 21.5 billion was to be funded by Airport and Aviation Services (Sri Lanka) Ltd. (AASL).
With regard to Package A, AASL entered into two agreements with JICA. The first agreement was entered into in March 2012 for ¥ 29 billion and the second in March 2016 for ¥ 45.4 billion.
OSL take:
Sri Lanka’s expanding tourism industry, rising passenger traffic and growing economic activity are creating new business/investment opportunities for foreign businesses and investors across the country’s aviation and airport services sector. The expansion of BIA Terminal I, aimed at increasing capacity to 10 million passengers a year, reflects the investment required to strengthen Sri Lanka’s air connectivity. The project to add 36 check-in counters and expand the lobby is expected to be followed by three further connected projects, while plans for the new Terminal II are also being revived. Beyond airport construction, business/investment opportunities are emerging across airport management, passenger services, aviation technology, cargo and logistics, ground handling, aircraft maintenance, repair and overhaul (MRO), airport retail and commercial development. Sri Lanka’s location at the centre of major Indian Ocean air and maritime routes also provides scope for developing the country as a regional aviation and logistics hub, linking South Asia with the Middle East, Southeast Asia and other international markets. For foreign investors, the expansion of airport capacity creates opportunities for public-private partnerships (PPPs), infrastructure investment, technology transfers and specialised aviation services. Increased investment in both airport infrastructure and airline connectivity could strengthen Sri Lanka’s position as a regional tourism, business and transit destination while improving internal and external air connectivity.
| Article Code : | VBS/AT/20261007Z_3 |