By Maheesha Mudugamuwa
- Decides to hold transmission and distribution project
- Concerned about SL debt situation and financial policy
In a letter written to the Director General of the Department of External Resources (ERD) of the Ministry of Finance, Economic, and Policy Development on 7 May 2020, which was seen by The Sunday Morning
, the Japan International Co-operation Agency (JICA) said the Government of Japan would “hold the formulation process temporarily regarding the Greater Colombo Transmission and Distribution Loss Reduction Project Phase II towards the appraisal stage”.
The letter, signed by JICA South Asia Department South Asia Division 3 Director Naoaki Miyata, stated that Japan is concerned about the current debt situation of the Government of Sri Lanka (GoSL) and also its financial policy.
In addition to that, it states the GoSL’s policies and actions for bilateral co-operation are treated with gravity by Japan. The policies included the request for a debt moratorium by the GoSL to Japan, the construction of a new power plant, and the project for establishing an LRT system in Colombo.
“We regret to say that the Government of Japan will not give a clearance for preceding (sic) the project to appraisal stage until the above mentioned situations are improved,” the letter stated.
“JICA shall follow the Government of Japan’s policies but we are willing to restart the formulation process regarding the project once the Government of Japan confirms the situations are improved.” The receipt of the above mentioned letter was confirmed by the ERD to The Sunday Morning when contacted for clarification.
ERD Director General Ajith Abeysekera said following receipt of the letter, JICA had verbally informed the Government that the letter would be disregarded later, but since the Government could not wait till Japan makes its decision, the Government initiated an open tender process for the Greater Colombo Transmission and Distribution Loss Reduction Project Phase II.
“We have already received the green light for the project from the Asian Infrastructure Investment Bank (AIIB),” he said, adding that the total cost of the project was around $ 50 million and the Government was yet to take a decision on the LNG power plant. In addition, the ERD Director General stressed that the bilateral relationship between the two countries was not affected due to the suspension of several projects, and the ongoing commitments from Japan to Sri Lanka are going on without any hindrance.
“Currently, projects worth around $ 3 billion are being conducted with funds received from JICA. It usually grants around $ 500 million to Sri Lanka annually,” Abeysekera added.
The projects funded by JICA that were mentioned by the ERD Director General include the renovation of the Kelani Bridge and Bandaranaike International Airport (BIA), which are proceeding without any hindrance. “The Kelani Bridge project is about to be completed,” he added. Meanwhile, numerous attempts made by The Sunday Morning to contact JICA were futile. Leading up to the Cabinet’s decision last week to cancel the LRT Project, the Government implied that preparations were being made to cancel the already signed agreement with JICA pertaining to the funding of the LRT Project stretching from Malabe to Colombo Fort which was launched by the previous Government under then Megapolis and Western Development Minister Patali Champika Ranawaka.
Concerns were raised by the new Government regarding the high cost of the project. In the proposal to cancel the project, which was put forward by the Transport Ministry and approved by Cabinet last week, it was stated that the project was cancelled after it was observed that the LRT Project would be unable to achieve the desired results.
Highlighting the reasons for cancellation, the cabinet proposal stated that according to the basic plan of the project, it was proposed to introduce a light rail service which would present travelling along the overland railway tracks as an alternative mode of transport to those commuting to Colombo for employment and other purposes in private vehicles.
However, the previous Government took the necessary steps to change that plan and implement the proposed LRT system on a railway track built on towers, which could cause severe environmental damage. The cabinet paper stated that if the project is implemented, a large number of buildings including houses and business premises will have to be demolished, and the cost of constructing the railway track on towers will be immense.