Japan and Sri Lanka sign loan agreement for Light Rail Transit System

The Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of Sri Lanka in Colombo today to provide a Japanese ODA loan of up to 30.04 billion yen for the Project for Establishment of Light Rail Transit System in Colombo.

The objective of the project is to boost the transportation capacity and improve the safety and comfort of public transportation by introducing a light rail transit (LRT) system with 16 stations distributed over 15.7 kilometers of track in and around Colombo.

By doing so, the project aims to improve the urban environment through a reduction in air pollution and other traffic pollution and to stimulate socioeconomic activities in the area.

The Special Terms for Economic Partnership (STEP) will apply to the Japanese ODA loan for the project, and Japanese technology, including rolling stock and electromechanical equipment for the LRT, will be utilized in the project.

STEP refers to special assistance terms for promoting the visibility of Japanese aid through a transfer of outstanding Japanese technology and expertise to developing nations.

The main contract is Japan tied and subcontracting is general untied. Although the main contract allows a joint venture with the borrowing country in addition to the Japanese company and its subsidiary with an overseas presence, the Japanese company must be the leading partner in such an arrangement. (Colombo Gazette)

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