Following the Covid-19 pandemic and its effects on Sri Lanka’s tourism industry, the ¥70bn (US$524m) development at the country’s Bandaranaike International Airport may be halted, Nikkei has reported.
In 2020, Japanese engineering group Taisei won a ¥62bn (US$464m) contract to build a new multilevel terminal and viaduct at the airport near Colombo, Sri Lanka’s largest city. The project, which was expected to be completed around 2023, was to be financed by the state airport operator, Airport and Aviation Services (Sri Lanka), which in turn was being financed by the Sri Lanka Ministry of Finance.
However, the negative effects of Covid-19 on the country’s foreign-exchange reserves has caused the Ministry of Finance to pause foreign debt repayments until further notice. This has left Airport and Aviation Services (Sri Lanka) unable to fund the project.
As a result of the financial cut-off, Taisei will begin negotiations on stopping the expansion project and is reportedly considering requesting a release from its contract before the end of 2022 if the funding situation is not resolved.
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