Financial Times

According to a news item in a weekly magazine the government has to mothball the plan to construct the Colombo-Katunayake expressway as they are not getting a response from the Chinese Export and Import Bank to fund the project.

The Colombo-Katunayake expressway is a much awaited project in facilitating better transportation; a pre requisite for economic development of Sri Lanka. Not only the Katunayake expressway, the proposed outer circular expressway, the Colombo-Kandy expressway, and the recently proposed 13 flyover projects will contribute immensely to improve transportation infrastructure enhancing mobility in and around commercial hub of Colombo.

Many of the countries such as Bangladesh were much behind us few years ago but moving forward by passing us even with the political instability and organized strikes disrupting day-to-day work. Investors mainly anticipate higher productivity levels not lowest wages nowadays when deciding where they will get maximum return.

As an example the daily rate per day in China is double Sri Lanka in the garments trade but investors prefer China than other low paying countries as productivity of Chinese workers is more than double compared to Sri Lanka. Recent reports by many researchers indicate lack of transportation facilities and time spent in traffic jams as a huge impact on productivity levels of the Sri Lankan work force.

Before former President Chandrika Kumaratunga’s government decided to do the Katunayake expressway using local funds RDA had called for expressions of interest to do the project on a BOT basis. As far as I can recall they had received some responsive proposals from investors but they were thrown away with the decision of doing the project using local funds.

RDA can call expressions of interest again for the balance work to be done on BOT basis or supply credit basis and the potential of getting a favourable response is higher.

After the government announced the signing of the MOU with the Chinese contractor there were news reports saying the proposed highway would be the most expensive highway in the world. If the selection process was transparent and people were made aware in advance such criticism could be avoided.

On the other hand elevated highways are more costly than highways constructed on land. Anyway the RDA should not think about changing the trace or modifying the designs as it will delay the process for another five six years. The best available option will be to go the public and call for expressions of interest for the balance work on supply credit basis and to negotiate with the prospective investors to receive a responsive bid with better terms and conditions.

We anticipate the government and RDA as the implementing authority will do their utmost to make the highway a reality this time.