Govt. borrows additional US$44 mln for already-built Katunayake Expressway
The cash-strapped Sri Lankan government continues its borrowing spree for infrastructure development from state banks, this time obtaining a loan of US$ 44.72 million (Rs.5.81 billion) for the Katunayake Expressway which is operative, official sources revealed.
The loan agreement was signed by the Ministry of Highways, Ports and Shipping on September 10, 2014, exactly one year after this expressway was opened by the President, raising many eyebrows.
There was no reason for the delay in the settling of expenses of the project for almost one year, a senior official said adding that no contractor or supplier will wait such a long time to recover their dues. The funding of the long-delayed project was agreed with the Chinese Government to meet the project cost of $292.4 million with a loan facility extended by China’s Exim Bank.
The Chinese contribution was for 85 per cent of the project or $252 million, with the Sri Lankan Government funding the balance 15 per cent, according to the MOU and Finance Ministry accounts.
But the total cost estimation was revised 18th July 2013 and this led to a new project cost of $336.72 million. Later it was again increased to $352.17 million.
This was an increase of $59.37 million from the original cost estimate made in 2008 and the 26-kilometre-long Colombo-Katunayake Expressway has cost the country $14 million a kilometre — around double the cost-per-km of the Southern Expressway, a senior government official said. The Katunayake expressway was marred by allegations of corruption since the awarding of the contract to the Daewoo-Keangnam joint venture from South Korea in 1999. The Koreans commenced work on the project in 2001 but it was stopped midway due to protests of residents.
China Metallurgical Group Corporation was awarded the contract in 2008 and it resumed the construction of the express highway in 2009. It was opened 27th October 2013.