LRT termination: Japan compensation to be determined today 

By Pamodi Waravita 


The compensation fee owed by the Sri Lankan Government to Japan International Co-operation Agency (JICA) for the termination of the light rail transit (LRT) project would be determined through discussions to be held today (18). 

In response to reports circulating yesterday (17) that the Sri Lankan Government would have to pay a compensation fee of Rs. 5 billion, Media Secretary to the subject ministry Uditha Pushpakumara told The Morning yesterday that discussions would commence with State Minister of Urban Development, Coast Conservation, Waste Disposal, and Community Cleanliness Dr. Nalaka Godahewa today to determine the amount to be paid.

“We have not yet concluded what the compensation would be and ministry officials are due to meet to discuss this matter,” Pushpakumara said.

The meeting would take place at the State Ministry of Urban Development, Coast Conservation, Waste Disposal, and Community Cleanliness. 

The LRT project, which was funded by JICA, involved a 15.7-km elevated railway track that was to run from Colombo Fort to Malabe, with an expected travel time of 30 minutes between the two locations. The loan agreement of approximately Rs. 48 billion pertaining to the project was signed between Sri Lanka and Japan in March 2019. 

The highly concessional loan agreement included a 40-year repayment period for funds obtained for consultation services with a grace period spanning 12 years, a 0.1% interest rate per annum for civil work and equipment, and a 0.01% interest rate for engineering services. 

However, the project was halted in June 2020 with the Government claiming the projected cost was too high while the projected return was too low. Consequently, a letter which was circulated on social media in September 2020, which was later verified, stated that the project was terminated based on instructions by the Presidential Secretariat.

The LRT project was initiated with the stated objectives of reducing traffic congestion in Colombo city, encouraging citizens to utilise affordable and convenient means of public transport, reducing the carbon footprint of the country.