The Taisei Corporation, a Japanese construction and civil engineering company, has completed only 5.44% of the expected 30% progress on a Rs. 37 billion passenger terminal project, according to a statement released by the Committee on Public Enterprises (COPE) on Tuesday (20).

The project, funded by the Japan International Cooperation Agency (JICA), involves the construction of a passenger terminal building and associated works at Bandaranaike International Airport (BIA) under Package ‘A’.

Despite the limited progress, the full Rs. 37 billion has already been paid to Taisei Corporation by the Airports and Aviation Services (Sri Lanka) (Private) Limited (AASL).

COPE revealed that the project stalled in December 2022 following JICA’s suspension of loan disbursements. This suspension was triggered by the Ministry of Finance’s April 2022 circular titled “Interim Policy on Servicing of Sri Lanka’s External Public Debt,” issued in the wake of the country’s financial crisis.

The construction halt has since led to additional costs amounting to Rs. 1.3 billion.

Meanwhile, equipment and materials worth Rs. 1.55 billion purchased by Taisei for the project remain in private warehouses owned by local subcontractors.

The Japanese government has since announced the resumption of development funding for Sri Lanka, with work on the terminal project expected to restart in July 2025.

COPE has questioned the rationale behind the full payment to the contractor despite the minimal physical progress and noted that nearly two years have elapsed on a three-year contract.

The Committee also noted a potential monthly savings of Rs. 392,904 if Taisei’s incinerator is relocated to a more cost-effective storage facility.