SL to roll out Japan-funded $ 2.2 b LRT project again

 Urban Development and Housing Minister Prasanna Ranatunga

• Urban Development and Housing Minister Prasanna Ranatunga tables Cabinet paper 
• Outlines importance of operating LRT for better transportation systems, to ease severe traffic to Colombo during peak hours, economic benefits 

The Government has begun to consider restarting the Japan International Cooperation Agency (JICA)-funded $ 2.2 billion ‘Light Rail Transit (LRT) project, stretching from Colombo Fort to Malabe which was abruptly terminated by the previous regime.

Urban Development and Housing Minister Prasanna Ranatunga said the new administration is ready to renew the LRT project contract with a JICA loan facility given its favourable conditions including low-interest rates and the grace period of 12 years which were completely ignored by the previous regime.

The move comes after the Japanese Government agreed to revive the Colombo-Malabe light rail project in December 2022. 

In September 2020, on the advice of the former President Gotabaya Rajapaksa, Secretary to the President Dr. P. B. Jayasundera abruptly 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. 

However, Ranatunga said the Urban Development Authority (UDA) will call for expressions of interest (EOIs) soon from interested international firms or joint venture companies to build the necessary infrastructure and implement the project subject to Cabinet of Ministers approval.  

“The LRT will provide for a better transportation system, to ease severe traffic to Colombo during peak hours, and will have multiple economic benefits on many fronts,” said the Minister in outlining the importance of the project.

The proposed LRT service can complete the journey from Malabe to Colombo Fort within 30 minutes during peak hours and operate a train every 10 minutes during off-peak hours. 

As per a report compiled by the National Audit Office (NAO), Sri Lanka lost nearly Rs. 6 billion due to the previous Government’s unilateral cancellation of the LRR project, which was started with Japanese loan assistance to reduce traffic congestion in Colombo and provide a better transport service to passengers. 

The NAO has shown that the Government’s decision to terminate the Light Rail Transit (LRT) project in 2020 resulted in a waste of Rs. 10.6 billion. It also pointed out, at the time the Government decided to cancel the project, multiple parties had spent the above-mentioned amount. 

The Auditor-General has suggested that, while submitting its observations on the Cabinet Memoranda, the Treasury makes every effort to give impartial professional observations that go beyond supporting the actions requested by the Memoranda. These findings were presented in a special audit report on the Japanese light rail project produced by the Auditor General’s Department in November 2022.