By: Staff Writer
June 15, Colombo (LNW): After years of uncertainty and repeated delays, Sri Lanka’s long-stalled Bandaranaike International Airport Terminal 2 project appears to be moving toward a long-awaited restart, with construction expected to resume during mid-2026.
The massive expansion project, considered one of the country’s most significant aviation infrastructure developments, has remained largely dormant since late 2022 when funding complications brought construction activities to a standstill.
At the heart of the disruption was the suspension of financial assistance from the Japan International Cooperation Agency (JICA). The agency halted its concessionary loan programme after Sri Lanka defaulted on its sovereign debt obligations, effectively freezing progress on the project when only six percent of construction had been completed.
Government officials now say the situation has changed dramatically following the country’s debt restructuring process. JICA has reportedly agreed to reactivate funding support, providing a crucial lifeline for the airport expansion initiative.
According to the Ministry of Ports and Civil Aviation, technical evaluations of Japanese contractors bidding for the critical Package A1 contract have already been completed. This package covers some of the most important components of the development, including the main terminal building, Piers 2 and 3, and elevated roadway infrastructure.
The ministry has forwarded its evaluation recommendations to JICA for final review and approval. Once concurrence is granted, authorities expect financial bids to be opened and the contract awarded to the successful bidder without significant delay.
Officials anticipate that construction mobilisation could begin between June and July 2026, marking the formal restart of physical work at the site.
Under current contractual conditions, the selected contractor will be required to complete the project within a legally binding period of 30 months. If timelines are maintained, Terminal 2 could begin operations by late 2028 or early 2029.
However, significant financial challenges remain despite the project’s revival. Since the original agreement was signed several years ago, global inflation and rising construction material costs have substantially increased the overall project budget.
As a result, the original JICA financing package is no longer sufficient to complete the development. Government negotiators are currently engaged in discussions with both JICA and Japanese authorities to secure additional funding estimated at between US$450 million and US$564 million.
Industry observers note that Terminal 2 is expected to transform Sri Lanka’s aviation capacity by significantly increasing passenger throughput and modernizing airport services. The facility is also regarded as essential to supporting future tourism growth and strengthening Colombo’s competitiveness within the regional aviation market.
While several procedural and financial hurdles remain, the project’s return to active implementation represents the strongest indication yet that one of Sri Lanka’s most delayed infrastructure ventures may finally be back on track.
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