By Maheesha Mudugamuwa Talks between Japan and Sri Lanka held last week on ending a stalemate over Phase III of the Central Expressway Project (CEP) ended in deadlock, The Sunday Morning learnt. A key discussion was held last week between the Japanese Prime Minister’s Special Advisor Dr. Hiroto Izumi, Highways and Road Development Minister Kabir Hashim, and Development Strategies and International Trade Minister Malik Samarawickrama at the World Trade Centre (WTC) on the Rs. 135 billion Phase III of the CEP. It is learnt that both sides failed to reach a final agreement at the meeting and as a result, more discussions will take place, further delaying the construction work on the project. Japan is to also review the consultancy agreement on the CEP Stage III, sources said. Phase III of the project has been on hold after Sri Lanka refused to agree to some of the conditions put forward by Japan to approve funding. At the talks last week, the Japanese special envoy had acknowledged that he would discuss with the Bank of Tokyo Mitsubishi (BTM) the issues with regard to the strict loan conditions, especially on bribery and jurisdictional matters put forward by them. Meanwhile, Road Development Authority (RDA) Chairman Nihal Sooriarachchi told The Sunday Morning that the construction of the Pothuhera interchange of the CEP which was to be conducted by a Japanese contractor would now be removed from Phase III and handed over to Phase II which is currently being constructed by the local contractors. “The RDA is currently preparing the documents needed for the removal,” he said adding that soon after the documentation is completed, the construction would begin. However, the RDA Chairman said that there was no date fixed for the signing of the agreement as they were still waiting for approval from the Attorney General’s (AG) Department on the loan agreement. Sources said that even though Japan agreed to shift the construction of the Pothuhera interchange to Phase II, it would be a long process.