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LRT project: Govt. to resume talks after debt restructuring

The Government has expressed to the Japanese Sri Lanka’s willingness to commence discussions to explore the possibilities of resuming the Japanese-funded Light Rail Transit (LRT) project that was unilaterally suspended by the previous Government, The Sunday Morning learns.

However, the Japanese side had noted that the discussion could only commence once Sri Lanka had finalised its debt restructuring programme.

A highly-placed Government source told The Sunday Morning that the Japanese Government would not be in a position to officially re-commence discussions on the currently-cancelled LRT project since new project funding and loans could not be discussed when Sri Lanka was engaged in a programme to restructure its debt.

“Therefore, official discussions will only commence after the debt restructuring programme, but there have been unofficial communications to the Japanese that Sri Lanka wanted to resume the cancelled LRT project,” the source explained.

The unilateral cancelation of the LRT project by the previous Gotabaya Rajapaksa Government was one of the reasons for the soured relations between Sri Lanka and Japan, which President Ranil Wickremesinghe tried to mend during his official visit to Japan last week to attend the funeral of former Japanese Prime Minister Shinzo Abe, where he also held meetings with high-ranking members of the Japanese Government.

The Japan International Cooperation Agency (JICA)-funded LRT project was ordered to be terminated in September 2020 by then President’s Secretary Dr. P.B. Jayasundera. 

The Transport Ministry Secretary was directed to terminate the LRT project stating the project was “very costly and not the appropriate cost-effective transport solution for the urban Colombo transportation infrastructure”.

“A suitable transport solution can be worked out in consultation with the Ministry of Urban Development and Housing and the Department of National Planning of the Ministry of Finance,” Jayasundera had stated at the time.

However, no ‘suitable transport solution’ was mooted by the previous Gotabaya Rajapaksa Government.

The former Yahapalana Government of President Maithripala Sirisena and then Prime Minister Wickremesinghe signed an agreement with JICA for a loan of ¥ 30 billion ($ 285 million at the exchange rate at the time) in March 2019 to meet part of the cost of the Colombo LRT. The total project cost was estimated at $ 1.5 billion at the time.

– By Our Political Editor