Govt. to borrow $300 million

The government is to raise another US$ 300 million as a syndicated loan but questions are being asked as to whether it is for infrastructure development, as claimed, or to repay US$ 300 million debt that is due by the middle of this year, according to economic analysts.

“There is strong suspicion that this money will be raised to pay the debt amounting to US$ 300 million due in the middle of the year,” Dr. Harsha de Silva told The Sunday Times FT.

The government last week called for Request for Proposals (RFPs) from HSBC, Standard Chartered, Deutsche Bank, Citi Bank, ICICI Bank and other foreign financial institutions and the two state commercial banks to raise US$ 300 million, to fund infrastructure development works.

De Silva said when the government borrowed $ 500 million from the international market last year, it was the same story. “They said it was for development, but ultimately ended-up settling their debt payments, which they admitted to afterwards,” he added.