Construction of the second passenger terminal at Bandaranaike International Airport in Katunayake, suspended for more than four years after Sri Lanka’s economic crisis, is scheduled to resume in November, the Ministry of Ports and Civil Aviation said on Saturday. The full project is expected to be completed within 30 months of restart.
The timetable was set after a Friday meeting between Minister of Ports and Civil Aviation Anura Karunatilleke, Japanese Ambassador Isomata Akio and a delegation from the Japan International Cooperation Agency (JICA), Ada Derana reported. The Ministry said the meeting’s main objective was to expedite approval of the loan amount and contract value so that ground operations can restart.
JICA’s delegation proposed sequencing the next steps in two phases: finalising the loan amount and signing the loan agreement first, with contract award at the negotiated price to follow. The Minister agreed to hold prompt discussions with the Ministry of Finance to secure approval for the loan amount required to complete the project.
Construction originally commenced in December 2020 under a Japanese loan facility of 75 billion yen, but was suspended in April 2022 as the foreign-exchange crisis forced Sri Lanka to halt large multilateral and bilateral capital projects. Procurement was restarted in late 2024, bidding concluded in 2025, and the process is currently in its final stage of contractor selection.
Following several rounds of discussions among the Sri Lankan government, the Government of Japan and JICA, the Japanese side has expressed agreement to provide the necessary loan facilities to complete the project based on “confidence in the current government,” the Ministry’s statement said. The disclosure marks the first formal restart commitment on the terminal since the 2022 suspension and reopens the largest single Japanese infrastructure loan in the airport portfolio.
The terminal expansion has been a central pillar of plans to grow BIA capacity in tandem with the rebuilding tourism sector and Western Province transport upgrades. Japan has also re-engaged on other delayed projects, including the JICA-financed Anuradhapura water supply scheme awarded to MAGA Engineering.
Update — June 15: Terminal 1 expansion to add 500,000 passengers a year
Minister Karunatilleke reviewed the wider BIA development pipeline with the management of Airport and Aviation Services (Sri Lanka) Limited on Monday and conducted an on-site inspection of the airport, the Ministry said. Beyond the stalled Terminal 2 project, the agenda centred on a parallel expansion of Terminal 1 covering arrival and departure areas, check-in and boarding systems, and immigration and transit facilities. That upgrade is expected to add roughly 500,000 passengers per year to BIA’s handling capacity. Authorities said the combined Terminal 1 and Terminal 2 projects are intended to position Katunayake as a more modern aviation hub capable of meeting the anticipated increase in passenger traffic.
Sources: Sri Lanka’s BIA second terminal construction to resume in November after JICA loan talks — Ada Derana, June 13; Minister reviews major expansion plans for BIA — Ada Derana, June 15.
