The government has decided to resume construction on the Kadawatha to Mirigama section of the Central Expressway next month, partnering once again with the Chinese state-owned company, Metallurgical Corporation of China Limited (MCC), Sunday Times reports.
Initially, the authorities had considered assigning the stalled project to local contractors. However, the decision was ultimately made to proceed with MCC due to several practical and financial considerations.
Deputy Highways Minister Prasanna Gunasena told the Sunday Times that the project would be restarted with the support of the China EXIM Bank, which originally financed the venture. He explained that continuing with MCC was necessary to secure the loan, as the funding was tied to the previously contracted company.
Negotiations have reportedly led to a revised loan arrangement, with the repayment now to be made in Chinese yuan instead of US dollars, offering a more manageable financial structure for Sri Lanka.
Minister Gunasena also noted that continuing with MCC brings other advantages, such as the ability to use existing designs and equipment, avoiding the need for new machinery purchases.
Work on this first 37 km segment of the expressway has been on hold since April 2022, when the China EXIM Bank halted disbursements following Sri Lanka’s sovereign debt default. Due to the delay, parts of the already-built structures have deteriorated.
The Deputy Minister highlighted that the delay has resulted in an average additional cost of Rs. 20 million. The original loan agreement, signed in March 2019, was valued at USD 989 million, covering 85% of the project’s cost.
With preparations underway, the government aims to recommence construction of this critical infrastructure project by next month.
well done hodailn Minister Gunasena as well as Hon Bimal Ratnayaka, Now please start the Marine Drive to Panadura. millions are suffering in rush hour traffic to/from Panadura