Ministry of Megapolis sign MoU for LRT project with JICA…

The Japan International Cooperation Agency (JICA) recently, signed a Memorandum of Understanding(MoU) with the Ministry of Megapolis & Western Development to provide technical assistance for the Light Rail Transit (LRT) project with the objective of empowering women in the public transportation sector and making it the first time woman-friendly public transport system in Sri Lanka.

Finance, Senior Project Specialist, JICA, Namal Ralapanawe said that women participation in the labor force in Sri Lanka is only half of that of men which was about 38.5% as of 2018. One critical factor responsible for this is the lack of safe and affordable transportation for women. As per UNFPA data, about 90% of women face sexual harassment in public transport in Sri Lanka. This hinders the mobility of women, impacting their engagement in the normal workforce. Thus, public transportation should be developed so as to provide safe and affordable transportation, especially to women in order to get their contribution to the national economy.

“Sri Lanka is possibly the only country in Asia where women are blocked out of skilled jobs in railways. In Japan, women have been operating trains since a century ago, while there are a significant number of women train operators (drivers), maintenance and station management staff at Delhi Metro in our neighboring country India. We hope the Malabe – Fort LRT Project would not only open up the hitherto blocked opportunities for women in the railway sector but also take additional measures to promote and encourage them. In a matter of years when the very first CLR train rolls out, I hope it would be driven by the very first woman train operator in Sri Lanka,” she said. Moreover, employing women in the railway could increase the safety and comfort of women passengers which incidentally, would increase the passenger volume and therefore the increase LRT revenu. The LRT could contribute to increasing women’s engagement in the workforce in two ways, namely by providing employment in its operation and by also enabling mobility for women to reach their workplace and get back home in safety and comfort.

The capital cost of the Colombo LRT project is covered by a loan offered by JICA under its Special Terms for Economic Partnerships (STEP) scheme, with a 0.1% interest rate per annum and a tenure of 40 years, including a grace period of 12 years.The STEP loan scheme which is provided only for projects which utilizes Japanese technology, is tied, which means that contractors for the project should be either a Japanese company or a Japan – Sri Lanka joint venture in which the Japanese company is the lead partner. However, the sub-contractors too could be from any country.

JICA’s loan covers all direct costs such as consultancy services with a 0.01% interest rate, civil work, rolling stock and equipment cost and also interest during construction. The other project costs such as the administration costs of the Government of Sri Lanka (GoSL) side, taxes, and land acquisition and compensation costs would be borne by the GoSL.“The loan agreement for the Japanese Yen 30.04 billion, was signed between GoSL and JICA in March 2019, which should cover the fund requirements of the first two years,” she said. The first two years consist mainly of engineering services and the rolling stock procurement activities. Ralapanawe further noted that the GoSL has requested financing for the project to be provided in tranches, considering the fund requirement for implementation as well as external debt management of GoSL, as it is a long term high-value project. She also emphasized the importance of proper operation and maintenance to derive the expected economic benefits of the project.

Careful consideration should be taken in balancing ticket fares, as if the train fare is too high, then fewer people would find it affordable which would result in loss of revenue and if the fare is too low, then the basic operation and maintenance costs could not be covered. Other forms of revenue generation such as advertising in the trains and stations and renting kiosks at stations are also being considered.She also noted that the World Bank classified Sri Lanka as an upper-middle-income country this year, but it does not prevent the country from obtaining concessionary ODA loans from JICA, as long as the project’s eligibility criteria in terms of environmental, social and economic considerations are met. However, when a country graduates to the status of higher income, country access to such concessionary loans would be limited.

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