Project consultants for the Japan International Cooperation Agency-funded Light Rail Transit (LRT) — which was cancelled by the Government last year — have lodged a claim of around Rs 5bn for work already done, other expenses and loss of profit. The consultants are a joint venture between Oriental Consultants Global of Japan and Sri Lanka’s [...]

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Abandoned LRT project’s consultants demand Rs. 5 billion for work done

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Project consultants for the Japan International Cooperation Agency-funded Light Rail Transit (LRT) — which was cancelled by the Government last year — have lodged a claim of around Rs 5bn for work already done, other expenses and loss of profit.

The consultants are a joint venture between Oriental Consultants Global of Japan and Sri Lanka’s Consulting Engineers & Architects Associated. Unless the Urban Development Authority (UDA) has other sources, the payments will likely be made through the JICA loan which remains active despite the project cancellation.

Treasury sources confirmed that the Government had still not discussed terminating the first tranche with the lender. Disbursements already made by JICA will have to be repaid, despite the project being called off. The focus of the first two years was to have been detailed design and procurement.

In March 2019, the Sri Lankan Government signed an agreement with JICA for a loan of 30bn Yen (US$ 285mn at prevailing rates) to meet part of the cost of the Colombo LRT. The total project cost was estimated to be 246,641 billion yen (US$ 2.3bn) but this includes land acquisition, administration, interest and taxes which are not financed by the loan.

The consultants started work in early 2019. Their seven-year contract was signed with the Ministry of Megapolis and covers detailed design and related engineering services, procurement assistance, construction supervision, testing and commissioning as well as defect liability check.

In September last year, however, Presidential Secretary P.B. Jayasundera instructed the Transport Ministry Secretary to terminate the JICA-funded LRT as it was “very costly and not the appropriate cost-effective transport solution for the urban Colombo transportation infrastructure”. The consultants had not been paid since mid-last year despite sending the bills to the UDA, the sources said.

While the 30bn Yen is the first tranche, later segments of the loan were to be approved as the initiative progressed. The JICA-funded line was to have 16 stops between Fort and Malabe. The entire track and stations were to be on elevated viaducts.

Meanwhile, the Government is proceeding with light rail projects across the Western region. Last week, the Central Environmental Authority (CEA) released of public comment the environmental impact assessment report for the Blue, Red and Green lines of the Western Region Light Rail Transit Project.

Separately, the Urban Development Ministry Consultants Procurement Committee has called for bids from consultants to carry out the pre-feasibility and feasibility studies for the Purple Line of the Colombo Light Rail Transit System.

The Purple Line (32km) will run from Port City in Fort through Pettah, Maradana, Borella, Rajagiriya and Battaramulla to Malabe from where one branch will end in Kaduwela and the other at Athurugiriya.

The relevant advertisement states that the consultants will also have to review and refine previous studies conducted for part of the Purple Line and perform the feasibility studies for the rest. “Previous studies” is a reference to the feasibility conducted for the Fort to Malabe section through a Japanese grant.

A feasibility study is designed to reveal whether a project is viable. It is an assessment of the practicality of a proposed project and takes into account economic, technical, legal, and scheduling considerations, among others.

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