Sri Lanka’s BIA Terminal II contract to be awarded by year-end
The Morning: The Bandaranaike International Airport (BIA) Terminal II project is expected to be awarded to the chosen contractor only by November–December this year, the Deputy Minister of Ports and Civil Aviation reveals.
Speaking to The Sunday Morning Business, Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku revealed that according to the timeline provided by the High-Level Procurement Committee appointed to evaluate the two bids received to serve as contractor for the BIA Terminal II project, the awarding of the project would be likely done by year-end.
He further pointed out that once the contract was awarded, the contractor would need a reasonable amount of time to mobilise before commencing the project.
“We are hopeful that we might be able to award the project by November-December. Mobilisation will require around another month,” he stated.
Kodithuwakku stated that he was unable to comment on the exact stage of the bid evaluation process, noting that he was not privy to such matters despite being the Deputy Minister.
He added that the High-Level Procurement Committee evaluating the bids did not have the practice of divulging such details to external parties.
However, the Deputy Minister said that both bids had been from Japanese contractors and that no local contractors had been involved. According to him, this is because, in terms of the conditions of the Japan International Cooperation Agency (JICA) loan agreement, the contractor is mandatorily required to be Japanese.
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 Taisei Corporation in 2020. However, following the stoppage of construction work in 2022 due to the funding freeze imposed by JICA following Sri Lanka’s default, Taisei Corporation terminated its contract with Sri Lanka.
The construction of this 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:
The planned expansion of BIA through the Terminal II project highlights not only the growing demand for air connectivity but also the wider business/investment opportunities emerging across Sri Lanka’s development landscape. The project, expected to be awarded to the selected contractor by November-December this year, reflects the country’s efforts to strengthen aviation infrastructure in line with the expansion of tourism and international travel. For foreign businesses/investors, such infrastructure development creates opportunities well beyond airport construction. Growing demand for air travel can support investment in aviation services, logistics, tourism, hospitality, transport, retail and related infrastructure. More broadly, BIA Terminal II is an indication of Sri Lanka’s continuing development programme and the need for private and foreign capital to support major infrastructure projects. As the economy stabilises and investment expands, business/investment opportunities are likely to emerge across transport, ports, energy, urban development, tourism and other strategic sectors. Sri Lanka’s ongoing infrastructure expansion therefore offers foreign businesses/investors an opportunity to participate not only in individual projects, but also in the country’s broader transformation into a more connected and investment-oriented economy.
| Article Code : | VBS/AT/20260810Z_3 |