Colombo-Malabe LRT to go ahead as PPP

Thursday, 25 June 2020 03:12 - - {{hitsCtrl.values.hits}}

LRT which was to be constructed with loan from JICA will be remodelled to continue as PPP with foreign investor
Investor to be chosen after call from international open competitive bids
Project will be remodelled to include residential, office and commercial areas

By Chandani Kirinde

The Light Rail Transit (LRT) System from Colombo to Malabe, the construction of which the previous Government had entered into agreement with the Japan International Cooperation Agency (JICA), will go ahead but as a Public-Private Partnership (PPP) with a foreign investor who is yet to be identified.

Ministry of Urban Development, Water Supply and Housing Facilities Secretary Priyath Bandu Wickrama said the project will be converted from a loan project to an investor project.

“We have not identified an investor so far, but it will be done after we call for international open competitive bidding. We will pick the investor who is most beneficial to the country,” he said.

He said the land acquisition for the project is now underway and it will be at least May 2021 when it is completed, and by then an investor can be finalised so that the project can be completed without any delay,” Bandu Wickrama told reporters at a press briefing.

He said the Ministry has not done a Request For Proposal (RFP) document so far, but they have a model RFP document which has been finalised to develop another rail track. “To suit the LRT project, we have to do a little modification. Most probably before the end of this year we will have the RFP ready,” he said.

The Secretary said that other than the rail track and the rolling stock, the idea is to develop station lands. “The earlier model was only to have stations, but we plan to allow the investor to build buildings on top of the stations and use those as residential, office and commercial areas. There are the ongoing discussions to remodel the project to suit the revenue model. I think it is going to be viable,” Bandu Wickrama said.

He said at least another $ 2 billion worth of investment will be added to the LRT project with the addition of the commercial and multipurpose model. The total cost of the project could estimate to be around $ 2.2 billion.

He said that of the $ 280 million (approx. Rs. 48 billion) concessionary loan agreement signed between the Government of Sri Lanka and JICA for engineering services and construction of a LRT, only $ 20 million has been utilised for consultancy work, hence there was no truth to reports that the Government would have to pay over $ 100 million for compensation for the cancellation of the project.

He said he had met with JICA officials to discuss the matter and that the agency will continue to support projects in the future.