Thread by @nimilamalee

Foreign Minister GL Peiris has admitted that some decisions could have been made better. The reference was to #SriLanka's unilateral cancellation of the Japan International Cooperation Agency-funded light rail transit project last year. Thread.
newsfirst.lk/2022/01/20/cer…

It's the first time a senior govt member said anything publicly about the LRT fiasco, albeit in response to a question. He didn't evade it. In Sri Lanka-#Japan relations, this and the cancellation of the MoU related to the East Container Terminal were elephants in the room.

To say the LRT matter could've been handled better is an understatement. The #Japanese govt was blindsided. @TimesOnlineLK followed it from the start.
sundaytimes.lk/200308/news/go…

In March 2020, bare months after the presidential election, the govt said it will float a request for proposals for the LRT despite the last administration having already signed a loan agreement for it with #JICA in March 2019.

Priyath Bandu, urban development ministry secretary said: “We will do it but it will be a different model. There will be an RFP to find a good investor. There will be no unsolicited parties. The future of this project will be a PPP."

The treasury secretary echoed that the project “won’t immediately happen” as the govt had "a lot of other priorities.” We also wrote that the announcement was likely to surprise JICA. It surprised not only JICA but the Japanese embassy.

The system was designed with 16 stations over 15.7 kilometres of track in and around Colombo. Completion was April 2026; loan had 12-year grace period, inerest rate of 0.1 percent. The consultancy contract was awarded in March 2019 and detailed design was at a final stage.

Bid documents for the first contract package for rolling stock were ready to be submitted for Government approval. Land acquisition for the first civil works contract package for the depot area were in progress. Residents’ consent has been obtained.

It had been planned to float a tender for rolling stock after the Parliamentary election. But by then various Govt sources had been indicating that the new administration may even be reconsidering the JICA funding. But JICA was not told.

As sign of cancellation became stronger, this happened: JICA, one of Sri Lanka’s oldest development partners, suspended funding for a new transmission line until the clarification of several "policy matters".
sundaytimes.lk/200614/news/ji…

We reported that the Japanese govt was worried not only about the debt situation, but a lack of clarity on Sri Lanka’s power generation plans. Multiple projects, including a proposed LNG plant as a joint India-Japan initiative, kept getting floated and dropped.

Then this happened. And everyone but JICA (in a manner of speaking) seemed to know the project was off. JICA told @TimesOnlineLK that as far as it knew, the LRT had so far been “implemented steadily” in accordance with the relevant loan agreement.
sundaytimes.lk/200621/news/li…

It said it "hopes that the project continues to be implemented based on the bilateral agreements”. And the Japanese embassy in mid-2020 maintained no request was made to suspend the JICA-funded light rail project or any other project which were in the pipeline for implementation.

By June 28, 2020, stuff started dawning on JICA--that while there was no official communication (as there should've been before media announcements), maybe the project WAS off. So it wrote to Finance Ministry seeking a clear answer.
sundaytimes.lk/200628/news/li…

JICA urged the Sri Lanka govt to follow “due process” if it intended to shift from Japanese funding for the LRT to a public-private partnership. It expressed “great shock” at recent pronouncements and wanted urgent clarification.

Finally, in September 2020, this happened (via @FT_SriLanka). The presidential secretariat issued a letter saying the LRT project was suspended with immediate effect and the project office shut down. The reason cited was high cost.
ft.lk/front-page/2-2…

The same month, @TimesOnlineLK wrote this story: The Treasury will start talks JICA with a view to canceling the LRT loan agreement as the govt's priorities have shifted from mega projects to micro-level initiatives such as irrigation, agriculture, etc.

sundaytimes.lk/200920/news/tr…

That's not all. In 2021, the LRT project consultants lodged a claim of around Rs 5bn for work already done, other expenses and loss of profit.
sundaytimes.lk/210214/news/ab…

This thread is not about the merits or demerits of the LRT vs an alternative. It is about the process and how one of Sri Lanka's oldest development partners was treated. END