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Its business as usual for all Chinese-funded projects
View(s):All Chinese-funded projects are now back on track and either completed or in the process of being completed, a senior Finance Ministry official told the Sunday Times this week.
The Government has a total of 28 projects funded predominantly by Chinese loans amounting to US$ 7.671 billion, the official said. They are spread among power and energy, roads and transportation, telecommunication, airport and aviation, port, irrigation and water sectors. They do not include the Colombo Port City project which, in contrast, is not being implemented on borrowed funds but is a Chinese investment.
The official said that, shortly after the new Government assumed power, several projects—roads, being chief among them—were subject to reviews to ascertain whether they could be implemented at cheaper cost. The underlying assumption (widely expressed during recent election campaigns) was that, having originated as unsolicited proposals, these projects were overpriced and the loans too costly to service.
With unsolicited proposals, the Chinese Government nominates a contractor. One of the initiatives the Government had concerns over was the Outer Circular Highway Project which came at a cost of US$ 494 million. “A committee was appointed and went through the estimates and contracts,” the official said. “In some cases, they found they could reduce the scope of the project, thus saving money to be used for some other projects.”
“Now most of the issues related to the projects that were held up have been cleared,” he said. “It is because of the review process that the delays happened. To my knowledge, none of the projects were suspended.”
The sectors with the most number of Chinese-funded projects—a total of 10 each—are power and energy and roads and transportation. Of these, the most expensive venture is the Lakvijaya coal power plant in Norochcholai which was completed at a cost of US$ 1.346 billion. In the roads and transportation sector, it is the Priority Road Project Phases 1, 2 and 3 at US$ 1.053 billion. In the ports sector, the Hambantota Port Development Project Phase 1 and 2 are priced at US$ 1.116 billion.
The total amount of Chinese funding for the power and energy sector, according to External Resources Department statistics, is US$1.553 billion. For the roads and transportation sector, it is a massive US$ 3.99 billion. The only project in the telecommunication sector is the ongoing Lotus Tower which comes at a cost of US$ 89 million.