Japan halts 12 infrastructure projects in crisis-hit Sri Lanka until IMF issues roadmap

As Sri Lanka continues to reel under an unprecedented economic crisis, Japan has decided to suspend its at least 12 projects in the island nation until the International Monetary Fund (IMF) establishes a roadmap to alleviate the turmoil. According to reports, the halted projects were being carried out under Japan International Cooperation Agency (JICA) in Sri Lanka.

“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, stated in the Parliament, Economy Next reported.

According to reports, the second terminal of Bandaranaike International Airport is among the projects that have been put on hold. The airport expansion project received a $570 million loan from a Japanese lender in 2012 and it was scheduled to be finished in 2023. According to reports, the second terminal of Bandaranaike International Airport is among the projects that have been put on hold. The airport expansion project received a $570 million loan from a Japanese lender in 2012 and it was scheduled to be finished in 2023.

Sri Lanka seeks $4 billion bailout package from IMF

For the past few years, JICA's projects have experienced difficulty in the island nation. A $2.2 billion light rail transportation project was cancelled in August 2019 by the Gotabaya Rajapaksa-led administration because it was too expensive. Besides, a $500 million trilateral agreement with India and Japan to expand the Eastern Container Terminal (ECT) at the Colombo Port was also unilaterally terminated by the former Rajapaksa government. Notably, Sri Lanka has sought a $4 billion (Over Rs 30,000 crores) bailout package from the IMF to steer the country's fragile economy, which has also caused severe food and gasoline shortages across the island nation. 

Sri Lankan crisis

It should be noted here that Sri Lanka has been experiencing its worst economic crisis since its independence in 1948. The country has huge debt obligations and dwindling foreign reserves, and has been struggling to pay for imports, causing a shortage of essentials. Meanwhile, citizens in the country have been forced to stand in long queues for fuel, cooking gas, and medicines. Meanwhile, Sri Lanka's newly-elected President Ranil Wickremesinghe has urged all the political parties to work collectively to find a solution to steer the country out of the ongoing crisis.

Image: AP/Facebook/@Ranil Wickremesinghe