Sri Lanka: Railway Efficiency Improvement Project

Transport / Rail transport (non-urban)

Sri Lanka benefits from an advantageous geographical position at the crossroads of major maritime trade routes between Asia and Europe. It is a densely populated island, with 21.7 million people living on 62,710 square kilometers of land, or 346 people per square kilometer. Colombo is the center of commercial and administrative functions and accounts for about 54.6% of Sri Lanka's urban population. The Western Province includes the districts of Colombo, Gampaha, and Kalutara, concentrates 6.1 million people (28% of the country total) on 5.6% of the land area of Sri Lanka, and contributes to 38.7% of its gross domestic product (GDP).

After a strong post-war recovery period, with the GDP growing by 8.5% annually during 2009-2012, the growth of the GDP averaged 4.1% during 2012-2018, and is also forecast at 4.1% in 2019.3 Sri Lanka is on the path to achieving upper-middle income status, and the GDP per capita attained $4,065 in 2017 while the poverty headcount ratio decreased from 22.7% of the population in 2002 to 4.1% in 2016. However, inadequate transport infrastructure and service delivery hinder the development of industry and services, which account for 91.8% of the GDP, and prevent Sri Lanka from leveraging its geographical position to increase its competitiveness and promote inclusive economic growth. Exports increased by 2.7% only during 2007-2017, while imports increased by 7.3% in the same period.

The population of Sri Lanka is projected to stabilize to 25.0 million people by 2050. The rising affluence of the middle-class drives a rapid increase of motorization rates, and total vehicles in Sri Lanka increased from 3.1 to 7.2 million during 2007-2017 (8.8% annual growth), with 67% of new cars registered in the Western Province. The stagnating efficiency of the railway network results in a market share of about 6% of passenger and 1% of freight demand in 2017 only, down from 35% of passenger and 80% of freight markets at its peak. This results in increasing congestion, particularly in the Western Province, where daily motorized trips are forecasted to increase from 7.9 million trips in 2013 to 18.3 million by 2035, while roads cover only about 10.7% of the urban area of Colombo.5 Significant investments are thus required to heighten the railway market share, increase domestic trade, alleviate the growing pressure on the road network, and mitigate the negative economic impacts of congestion.

Colombo is the central node of the railway, road, air, and port infrastructure networks. SLR was established in 1858, and owns and operates the railway network; administratively, it is a department of the Ministry of Transport Services Management (MSTM). In 2017, the railway network connected 343 stations along 1,568 km of broad-gauge tracks, and SLR operated about 351 daily passenger trains and 19 freight trains, transporting 136.7 million passengers and 2.0 million tons of goods annually. Four suburban lines radiate out of Colombo, and the 230 km of tracks in the Western Province (16% of the country total) carry over 80% of railway passengers. SLR owns 250 diesel locomotives and multiple units, but only 76% are operational and 49% of the fleet is over 30 years old. Tracks and rolling stock suffer from corrosion due to airborne salinity, which hinders the potential for rehabilitation. Signaling mainly consists of outdated mechanical interlocking system, with centralized control for only 200 km of tracks in the Western Province. The telecommunications system was installed in 1985, with the latest spare parts received in 1998. Automatization is limited, and most planning, operating, and recording activities are manually conducted.

Operational efficiency improved

Maintenance capacity strengthened

Railway safety improved

Technical training center upgraded

Project implementation capacity and readiness of future railway projects strengthened

Consulting firms and individual consultants will be recruited under the project to assist with the implementation and preparation of pipeline projects.

All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). All firms will be recruited using ADB's quality- and-cost-based selection (QCBS) under full technical proposal (FTP) and a standard quality-cost ratio of 90:10, unless nongovernment organizations are identified in which case the recruitment approach will be updated to quality-based selection (QBS). Individual international and national consultants will be engaged for project management support, railway technical expertise, and capacity building of the PMU. About 30 person-months of international consultants and 100 person-months of national consultants will be required.

All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (2015, as amended from time to time).

International competitive bidding procedures will be used for all civil works, goods, and information technology (IT) goods contracts. Shopping will be used for procurement of works and goods estimated to cost less than $100,000. Before the start of any national competitive bidding procurement, ADB and the government will review the public procurement laws of the government to ensure consistency with ADB's Procurement Guidelines (2015, as amended from time to time).

All procurement activities will be the responsibility of the project director of the PMU, who will be supported by staff and consultants. ADB will closely monitor all major project implementation activities. Works and goods contracts under the projects primarily include (i) two IT-goods packages for the telecommunications and ticketing system; (ii) five design-build packages for the housing units, operations headquarters and train control center, railway workshop, new training wing of the SLGRTTC, and railway underpass; (iii) one or more works packages for the improvements of station facilities at Colombo Fort and Maradana; (iv) and about 18 goods packages for the procurement of maintenance equipment, and training equipment for the SLGRTTC.