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Sri Lanka Halts 12 Infrastructure Projects Funded by Japan Amid Economic Crisis
Sri Lanka Halts 12 Infrastructure Projects Funded by Japan Amid Economic Crisis
Sputnik International
The Ranil Wickremesinghe government has been scrutinizing the infrastructure projects signed in the past amid rising foreign debt. The island nation has... 11.08.2022, Sputnik International
2022-08-11T05:42+0000
2022-08-11T05:42+0000
2022-10-19T20:02+0000
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The Sri Lankan government announced the suspension of 12 projects under the Japan International Cooperation Agency (JICA) in the island nation until the finalization of the bailout package with the International Monetary Fund (IMF).The suspension includes work on the second terminal of Bandaranaike International Airport. The Japanese lender approved a $570 million loan for the airport expansion project in 2012, and it was expected to be completed in 2023.JICA’s projects have been facing challenges in the island nation for the past few years. In August 2019, the Gotabaya Rajapaksa government scrapped a $2.2 billion light rail transit project, claiming it was too expensive. The previous Rajapaksa government had also unilaterally canceled a $500 million trilateral deal with India and Japan to develop the Eastern Container Terminal (ECT) of the Colombo Port.Sri Lanka has been negotiating a $4 billion bailout package with the IMF since June to revive the economy, which is facing a foreign exchange crisis, resulting in severe food and fuel shortages across the island.The World Food Programme (WFP) said last month that nearly 6.3 million Sri Lankans, or one-fourth of the country’s population, are food insecure and in need of assistance. Sri Lanka has also restricted fuel imports to safeguard its foreign reserves. Sri Lanka owes around $51 billion in foreign debt, primarily to multi-lateral institutions and venture funds.
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Sri Lanka Halts 12 Infrastructure Projects Funded by Japan Amid Economic Crisis
05:42 GMT 11.08.2022 (Updated: 20:02 GMT 19.10.2022) The Ranil Wickremesinghe government has been scrutinizing the infrastructure projects signed in the past amid rising foreign debt. The island nation has defaulted on its foreign debt this year for the first time in decades.
The Sri Lankan government announced the suspension of 12 projects under the Japan International Cooperation Agency (JICA) in the island nation until the finalization of the bailout package with the International Monetary Fund (IMF).
“Twelve projects funded by Japan under JICA will be suspended until the IMF establishes a roadmap on Sri Lanka’s debts and its sustainability because the country has been declared bankrupt,” Nimal Siripala de Silva, Minister of Ports, Shipping and Aviation, told parliament on Wednesday.
The suspension includes work on the second terminal of Bandaranaike International Airport. The Japanese lender approved a $570 million loan for the airport expansion project in 2012, and it was expected to be completed in 2023.
JICA’s projects have been facing challenges in the island nation for the past few years. In August 2019, the
Gotabaya Rajapaksa government scrapped a $2.2 billion light rail transit project, claiming it was too expensive.
The previous Rajapaksa government had also unilaterally canceled a $500 million trilateral deal with India and Japan to develop the Eastern Container Terminal (ECT) of the Colombo Port.
Sri Lanka has been negotiating a $4 billion bailout package with the IMF since June to revive the economy, which is facing a foreign exchange crisis, resulting in severe food and fuel shortages across the island.
The World Food Programme (WFP) said last month that nearly
6.3 million Sri Lankans, or one-fourth of the country’s population, are food insecure and in need of assistance. Sri Lanka has also restricted fuel imports to safeguard its foreign reserves.
Sri Lanka owes around $51 billion in foreign debt, primarily to multi-lateral institutions and venture funds.
