COLOMBO: A Japanese firm was chosen by Colombo Thursday to build a new $570 million terminal for Sri Lanka's main airport, as Tokyo re-emerges as a key infrastructure backer amid a raft of Chinese projects.

The cabinet announced the Taisei Corporation was picked to develop the Japanese-funded project, with the new terminal expected to double capacity at Bandaranaike International airport to around 20 million passengers a year.

The decision follows the financing of Colombo's planned $1.5-billion light rail system last year by Japan's overseas development agency -- the biggest single foreign investment in the island nation.

During the presidency of Mahinda Rajapaksa, who was recently appointed prime minister, Sri Lanka secured almost $7 billion in loans from China, dislodging Japan as the island's main infrastructure funder.

But a second international airport funded and built by China in Sri Lanka's south is a white elephant, with no airline using it for scheduled flights.

Unable to service its loans, Colombo leased a Chinese-built deep-sea port at Hambantota to a Beijing company for $1.12 billion in 2017.

AFP