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Central Expressway phase 1 delayed; RDA seeks Govt. intervention to secure loan
The Road Development Authority (RDA) has sought government intervention to expedite a Chinese loan to get going with a multibillion rupee expressway project delayed for more than two and half years, a top official said.
The loan amounting to US$ 1.1 billion (Rs 160 billion) approved by the Exim Bank of China has been delayed for unknown reasons, thereby preventing the RDA from carrying on with the construction of the first part of the Central Expressway project from Kadwatha to Mirigama – a stretch of 37.09 km.
RDA Chairman Nihal Sooriyaarachchi told the Sunday Times that though the Exim bank of China had approved the loan, the bank needed approval from the Government to release the funds. “We have sought the intervention of the Government to expedite the loan as the RDA will not be able to meet the project’s 2020 deadline,” he said.
The RDA chairman said the completion of the rest of the Central Expressway project would be of little or no use, unless the first stage from Kadwatha to Mirigama was completed, thereby linking it with the Southern expressway.
He said that if the first section was not completed, the RDA would be forced to build link roads to enter the central expressway from Mirigama but this would not be successful.
Priyantha Ratnayake, Director General of the Finance Ministry’s External Resources Department (ERD), said that since the loan was a concessionary loan with an interest rate of around two percent at a fixed rate, they were not in a position to negotiate for another loan where they would be forced to pay a rate of between seven to eight percent interest.
“We understand the loan has been approved by the Exim Bank and put forward to China’s Ministry of Commerce for approval, but have not received a response so far,” he said. He also said the Sri Lankan Government’s intervention might be required to expedite the loan.
The Sunday Times learns that Prime Minister Ranil Wickremesinghe has called a meeting of stakeholders next week to discuss the delay in the phase one of the Central Expressway project.
China’s Ambassador Cheng Xueyunan met President Maithripala Sirisena this week. After the meeting, the Chinese embassy said the President pointed out that Sri Lanka strongly supported China’s ‘Belt and Road Initiative’, and attached great importance to the joint mega-projects of Colombo Port City, the Hambantota Port and the Industrial Park.
However, in the statement, the embassy made no mention of the loan for part one of the Central Expressway.