Outer Circular Highway phase 3 gets under way with reduced costs
View(s):The Government is compelled to obtain a massive loan of Rs.66.7 billion from the Chinese Exim Bank owing to contractual agreement between the previous regime and the Metallurgical Corporation of China Ltd despite the present administration’s efforts to reduce the cost for the construction of the Outer Circular Highway phase 3, officials said.
The 3-member committee appointed by the Minister of Highways and Investment Promotion, Kabir Hashim has recommended reducing the scope of the highway project by 30 per cent of the original cost eliminating financial waste, a senior official of the ministry disclosed.
The savings accumulated from the reduction of the cost of this project would be redistributed to the upcoming road projects.
Under the new scope, the Ministry will reduce the cost of work by approximately Rs. 24 billion (a 30 per cent reduction from the original cost) by constructing four lanes of the highway removing the provision to expand it up to six lanes by the previous regime, he added.
Under the Mahinda Rajapaksa government, the OCH 3 plan was to be a four (4) lane highway, with provision to expand to six (6) lanes in 2027. The plan to expand OCH 3 to six (6) lanes was based on traffic projection reports which have been found to have been exaggerated during the initial planning stages.
According to the traffic forecasts prepared during the former regime, traffic was expected to increase by 14 per cent on average per annum from 2017-2022 and by 10 per cent on average per annum from 2022-2027. However, vehicle registration during that same period was expected to only increase by 6 per cent on average per annum. As such the review committee is of the opinion that a six (6) lane highway would be underutilised and provisions for an expansion are an unnecessary accumulation of cost.
The removal of the provision to expand to six (6) lanes will ensure a reduction in the cost of the construction of expensive structures such as the viaducts and embankments, the ministry official pointed out. The committee is also of the opinion that the construction material, which was to be provided by the contractor, is between 20-30 per cent above market rate.