News
China bank approves $ 1b loan for expressway
After nearly four years of negotiations, Sri Lanka has obtained a US$ one billion (Rs 178 billion) loan from China Exim Bank for the construction of first stage of the Central Expressway project.
The delay in completing negotiations for the loan is estimated to cost an additional Rs 12 billion, which includes escalation of the cost of building materials and currency fluctuations. The approval for the signing of the Memorandum of Understanding (MoU) between the China Exim Bank and the Sri Lankan Government came last week after the Treasury’s External Resources Department officials held talks in China.
Talks for the loan required for the construction of the Kadwatha-Mirigama section – a stretch of 37.09 km — began in 2015 soon after the United National Front Government was elected to power.
“Sri Lanka’s financial situation, political issues and adverse reports about utilisation of funds for various projects delayed the approval of the loan,” ERD Director General R.M.P. Rathnayake told the Sunday Times. He said that if they did not pursue the negotiations the process would have taken a longer time including preparation of new reports required for the transactions.
The expressway’s first phase was due to be completed by June next year, but it would now take about three more years.Road Development Authority Chairman Nihal Suriyaarachchi said the completion of the Kadawatha-Mirigama stretch would enable the linking of the southern expressway to the first phase.
The extended sections of the Southern Expressway — Matara to Beliatta (30 Km), Beliatta to Wetiya (26Km) and Wetiya to Andarawewa (15 Km) and Andarawewa to Mattala and Hambantota (25 Km) — would be ready for opening in August this year, he said