News
No US dollars to fund Central expressway
The failure to raise US$ 86 million (Rs 31.7 billion) in foreign currency has further delayed government plans to resume the first phase of the Central Expressway project between Mirigama and Kadwatha.
Plans were underway to resume the project this month after a lapse of five years.
A senior Treasury official said that under the agreement Sri Lanka should raise the local component of the project in US dollars and the inability to do this had delayed the project.
He said the Government had made arrangements to raise the funding from two state banks to resume the project, but an issue had arisen in providing the funds in US dollars as the country faced an acute shortage of foreign currency.
Under the project agreement, China’s EXIM bank is to provide a loan of US$ one billion for the project, but 15 percent of the local funding should be provided in US dollars.
A Treasury official said the Road Development Authority had initially signed the agreement, pledging that the local component would be provided in US dollars.
He said the Treasury had now directed state departments and agencies not to enter into agreements to pay the local component in US dollars and that consultation should be held with the Treasury before signing such agreements.
The move came as Prime Minister Mahinda Rajapaksa on Friday visited the construction site of stage II of the Central Expressway project between Mirigama and Kurunegala. He said he would expedite the construction of the project.