Central Expressway Project (Stage 1) yet to receive Chinese Exim Bank pledge
Local bank to pay in rupees
The mobilisation advance of around Rs. 30 billion was yet to be paid by Sri Lanka to activate the loan facility granted by Chinese Exim Bank last year for the construction of Stage I of Phase I of the Central Expressway Project (CEP), The Morning learnt.
The 37 km-long Stage I of the CEP, spanning Kadawatha to Meerigama, was scheduled to be constructed by a Chinese contractor at an estimated cost of Rs. 158 billion obtained as a loan from the Exim Bank of China.
Stage I, which is moving at a snail’s pace due to the delay in disbursing the funds of the already signed agreement covering 85% of the contract price, has not yet begun its construction due to the delay on the part of the Government to meet the agreed 15% of the total loan amount.
According to Road Development Authority (RDA) sources, a local bank had agreed to pay the necessary amount in rupees, even though there was demand from the side of China to pay in dollars.
“We have a shortage of dollars in the country and therefore we’ve decided to pay in rupees,” a senior RDA official, who wished to remain anonymous, told The Morning.
However, the contract agreement for Stage I was signed in 2015 and as the conditions mentioned in the contract, the Government would now have to pay an additional amount as an escalation fee to the Chinese contractor due to the delay in commissioning the construction, he stressed.
Meanwhile, the RDA claimed that the decision to obtain necessary funds to mobilise the loan was taken last year.
The External Resources Department (ERD) had also clarified that the Cabinet decision to obtain a local loan was taken last year.
ERD Director General Priyantha Rathnayak told The Morning that no new directions had been arrived at his department with regard to the CEP’s Stage I and no foreign financing had been sorted in that regard.
By Maheesha Mudugamuwa