• Loan terms still under negotiation, talks continue
• 56% of construction completed 

Negotiations on revised financing terms for the Kadawatha–Mirigama section of the Central Expressway Project (CEP) are still underway, with the Government hoping to finalise the agreement with China by the end of next month, according to the External Resources Department (ERD). 

Speaking to The Sunday Morning, Finance Ministry ERD Director General Samantha Bandara stated that the revised loan arrangement had not been finalised yet and that negotiations with the Chinese were ongoing. 

“We have not finalised or signed the agreement yet. We are in the process of having discussions with them and we expect to conclude the agreement before the end of the next month,” he said. 

When asked about the Government’s local financing obligation for the project, he said discussions were still ongoing with the National Budget Department. 

Meanwhile, Coordinating Secretary to the Minister of Transport, Highways, and Urban Development Lahiru Madusanka stated that the Chinese side had already agreed to provide the financing and that a delegation was scheduled to visit Sri Lanka to sign the deal. 

However, he noted that the timing would be established by the Ministry of Finance. 

“On our end, we are carrying on with the work as the Treasury has given us the commitment with the released funds. About 56% of the work is done and proceeding at a steady pace,” he said. 

He added that no changes would be made to the project’s scope or contractor obligations under the revised agreement. “We have evaluated their claims. We are not paying for the ones we aren’t liable for. They have a few other claims left,” he said. 

According to Madusanka, the project is still scheduled to be completed by September 2028, although it could be completed sooner. “It might be possible to finish before that,” he said. 

The 37-km Kadawatha–Mirigama section of the Central Expressway has remained one of Sri Lanka’s longest-delayed infrastructure projects. Construction, which began in 2020 under Metallurgical Corporation of China Ltd. (MCC), was halted after China Exim Bank froze loan disbursements following Sri Lanka’s sovereign debt default in 2022. 

While the initial finance arrangement signed in 2019 provided for a loan of $ 989 million to pay 85% of the project cost, only about $ 51 million was delivered before funding was blocked. The remaining 15%, equivalent to $ 174 million, was paid by the Sri Lankan Government as a mobilisation fee. 

In 2025, China Exim Bank presented many options for restarting financing, including changing the loan currency from US Dollars to renminbi, switching to a different financing instrument, or obtaining co-financing from international and local lenders. The Government has since negotiated better financial terms in order to resume full-scale development.