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Central Expressway: Govt. plans shift to BOT track
The Government is considering the construction of two stages of the Central Expressway on a Build Operate and Transfer (BOT) basis despite its high cost.
This is in contrast to a previous proposal to raise foreign loans to complete the two stages — from Pothuhera to Galagedara and Kurunegala to Dambulla — covering a total distance of 92 kilometres.
Cabinet approval has been granted to consider the BOT option where the Government will gain control of the two stretches and collect toll revenue only after a 30-year period. Under the earlier plan, the Government would collect revenue once the expressway was opened.the Sunday Times learns that the Government was facing difficulties in raising funds for the project and this was cited as one of the reasons for the BOT option.
A senior Central Bank official said obtaining foreign loans with high repayment rates had been put on hold until the economic situation improved.
However, he said the completion of the project under a BOT system was a disadvantage to the country as the investor would take a longer period to hand over the project to the Government.
Obtaining foreign loans, he said, would have the advantage of enjoying a grace period to repay the loan while under the BOT project the investor usually opts for a commercial loan with a higher interest rate.
The project, which has already been delayed, could be further delayed if the Government looks for an investor to carry out the project on a BOT basis.
However, Money and Capital Market State Minister Ajith Nivard Cabraal told the Sunday Times that the Central Expressway “is certainly a priority project and Sri Lanka is going ahead with construction work.”
He said a few problems could be experienced in the initial stages of the project, “but we are overcoming these snags and going forward.”
“The priority projects we have earmarked are those that provide water to the people and deal with the Human-Elephant conflict. We would also focus on the 100,000km of road projects and some expressways,” he added.
Work on the Central Expressway project with four stages was due to begin in 2015. Work on stage one of the project from Kadwatha to Mirigama began last year with a US$ 1 billion loan from China EXIM Bank, while some segments of stage two from Mirigama to Kurunegala have been partly completed by local contractors.