“It was Rajapaksa regime that abused road construction funds,” says Highways Ministry

Sri Lanka’s Highways and Investment Promotion Ministry said on Monday that due to misuse of funds during the Mahinda Rajapaksa regime, in which Rs.151 billion was raised outside the national budget, many contractors are unable to continue their work on road projects due to unavailability of funds. The ministry was responding to comments to the media by former President Rajapaksa accusing the current ministry of being unable to complete certain road projects “due to the misuse of funds”. In a media statement, the ministry said that in 2014 the Rajapaksa-headed Ministry of Ports and Highways obtained an out-of-budget loan from several local banks amounting to Rs. 151 billion for 28 road projects. The National Savings Bank (NSB) was one such bank which extended a loan of Rs. 55 billion to the ministry. The Road Development Authority (RDA) drew out an advance of Rs. 28 billion from the NSB’s Rs. 55 billion loan. “Approval for this drawdown was based on falsified progress reports produced by the RDA related to the bank funded road projects,” the statement said. The RDA lent Rs. 3.7 billion to the Ministry of Ports and Highways for the repayment of outstanding bills. This is in defiance of financial regulations which state that the RDA cannot lend money to the ministry, it said. “A further Rs. 18.1 billion was used to repay local segments of several foreign funded projects. However, financial records indicate that only Rs. 6.14 billion was required for repayment. The balance funds have remained unaccounted for. The road projects which are being funded by these local bank loans were awarded following unsolicited tenders. Due to the misuse of funds during the previous regime, many contractors have been unable to continue their work on road projects due to unavailability of funds,” the Highways Ministry said.