Turbulence Ahead: Controversy Clouds Sri Lanka’s Largest Airport Expansion Tender

• CNL Reporter
• April 6, 2025
• News
• Sri Lanka’s Largest Airport
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Sri Lanka’s long-stalled Phase II expansion of Bandaranaike International Airport (BIA) has landed in deep controversy, as fresh revelations cast serious doubts on the integrity of the bidding process for the country’s largest-ever construction contract. The tender, officially closed on March 25, 2025, is now mired in disqualification drama, transparency concerns, and allegations of undue influence.

At the center of the storm is the Sojitz-Larsen & Toubro (L&T) consortium, one of only two bidders vying for the JICA-funded Rs. 170 billion project intended to boost BIA’s capacity to 16 million passengers annually.

❗ Disqualification Drama: Sojitz Flagged in Egypt

Industry experts have revealed that Sojitz Corporation of Japan was recently disqualified from participating in a major airport project in Egypt. The Egyptian Airports Company, under that country’s Ministry of Aviation, rejected Sojitz’s bid for the Phase II expansion of Borg El Arab International Airport, citing a lack of technical qualification.

This disqualification by a globally respected aviation authority raises serious concerns about Sojitz’s competence—especially as they now pursue an even more complex project in Sri Lanka. Experts warn that this could be a red flag for the credibility of the entire tender process.

Questionable Partnership: L&T’s Checkered Past

Even more troubling is the heavily scrutinized partnership between Sojitz and India’s L&T. Sources allege that Sojitz is relying on L&T’s experience to qualify, as it lacks airport construction credentials of its own. However, L&T is no stranger to controversy either, with a long history of project delays, legal disputes, and arbitration cases—both in Sri Lanka and across the region.

Some examples of L&T’s troubled track record include: Incomplete or poorly performing projects in Sri Lanka.Ongoing legal disputes, including arbitration with the Government of Sri Lanka and Repeated issues with cost overruns and missed deadlines in public projects throughout Asia.

Bid Manipulation Suspicions Intensify

Concerns around fairness and transparency have escalated following an unusual last-minute extension of the bid submission deadline, granted allegedly at the request of Sojitz-L&T. Industry observers point out that such extensions are rare—especially for a project of this magnitude—and that the move appeared to favor the Sojitz-L&T consortium disproportionately.

It has since emerged that Sojitz officials met with Sri Lankan ministry personnel, an act considered highly inappropriate during an open tender. This interaction is viewed as a breach of ethical procurement norms and has fueled allegations of behind-the-scenes lobbying.

Hidden Arbitration and Compliance Violations

Adding fuel to the fire, Sojitz is reported to have omitted disclosure of a pending international arbitration case against the Government of Sri Lanka—a direct violation of tender rules requiring full legal transparency.

In this case, Sojitz is seeking over US$30 million from the Ceylon Electricity Board (CEB) in a Singapore arbitration, stemming from what officials have described as “false and baseless” accusations. Failure to disclose such critical information could be grounds for automatic disqualification, experts warn.

Sojitz’s compliance history is also under scrutiny due to a US$5.2 million settlement with the U.S. Treasury Department in 2022. A subsidiary was found to have violated Iran sanctions by conducting prohibited dollar transactions, casting doubt on the corporation’s risk governance and ethics.

Wider Implications for Governance and Investment

The controversy is not just about one project—it strikes at the heart of Sri Lanka’s public procurement credibility. Critics argue that allowing bidders with incomplete submissions, legal disputes with the state, and disqualifications abroad sets a dangerous precedent.

Key concerns include:

Erosion of fair competition, with smaller firms disadvantaged by rule-bending for favored players.

Tarnished international reputation, potentially deterring future foreign investment.

Risks of corruption, leading to inflated project costs and long-term economic strain.

Loss of public trust, damaging the legitimacy of national development programs.

The BIA expansion is more than an infrastructure upgrade—it’s a symbolic and strategic initiative tied closely to the image and legacy of President Anura Kumara Dissanayake. The administration is under increasing pressure to reaffirm its commitment to transparency, accountability, and ethical governance.

There are now widespread calls from civil society, industry leaders, and policy experts to:Reinstate the original bid deadline to ensure a level playing field.

Disqualify non-compliant bidders, as per standard procurement guidelines.

Investigate any irregularities and restore trust in the process.

Final Boarding Call for Integrity

As Sri Lanka positions itself for post-crisis recovery, the handling of this tender could set the tone for the future of governance. The question remains: Will the government choose integrity over influence—or allow history to repeat itself?