News
Three state banks to fund part of Central Expressway
In the absence of foreign investments for sections of the Central Expressway project, the Cabinet has approved a proposal by the Ministry of Highways and Road Development to obtain a loan of Rs 60 billion from three state banks.
Approval has been granted to obtain funding from the People’s Bank, the National Savings Bank and the Bank of Ceylon to complete the section between Mirigama to Kurunegala – stage II of the Central Expressway.
As a security for the loans, the Ministry has proposed that the annual toll collections from the other expressways could be made use of, with the toll revenue set to increase by next year.
The project was due to be completed in November this year, but has now been delayed till May next year.
The Cabinet paper has noted that if the work of the project is stopped, heavy compensation will have to be paid to contractors with a drastic social impact due to stoppage of employment of around 5,000 direct employees of the local contracting companies.
The paper also notes that in addition, other road construction contracts already awarded to various construction companies have been held up due non-availability of funds to pay compensation for land acquisition amounting to Rs 9.5 billion. It also claims heavy compensation will have to be paid to these contractors as well, if the projects are delayed.