It has been revealed that Japanese company has demanded Rs. 58 million from the Sri Lankan government for abandoning a previously agreed light railway project.
The project was designed to construction of the 16-kilometer stretch from Malabe to Colombo Fort with 16 parking lots during the last government with the aim of reducing traffic congestion in the capital city.
The contract was awarded to Japan International Cooperation Agency (JICA), which has built a number of infrastructure facilities in Sri Lanka, including the port.
The current President canceled the project, which was to be carried out under a concessional loan of $ 150 million, saying it was not a profitable program.
The latest government audit report reveals that the company has sought compensation for the cancellation of the consultancy agreement at the time of the cancellation of the project.
“The consulting firm has demanded Rs. 5,896 million in damages,” the auditor general said after inspecting government accounts last year.
Secretary to the Ministry of Urban Development, Water Supply and Housing Infrastructure Dr. Priyath Bandu Wickrema stated that no compensation is required for the cancellation of the light rail agreement.
JICA had allocated $ 280 million to start the project, but only $ 20 million had been spent at the time, and only that amount would have to be repaid, the secretary stated to the state media.