By: Staff Writer
October 06, Colombo (LNW): Funding from China’s Export-Import (Exim) Bank for Sri Lanka’s long-delayed Central Expressway Project (CEP) is expected to resume by September or October, marking a potential breakthrough for one of the country’s most ambitious infrastructure ventures.
Road Development Authority (RDA) Chairman T. Paskaran confirmed that discussions with the Chinese lender are progressing, following a suspension triggered by Sri Lanka’s 2022 economic crisis. “Negotiations with the donor are currently ongoing, and there is a strong likelihood that funding could resume by September or October,” Paskaran said.
The funding freeze was the main reason for the project’s prolonged delays. Paskaran added that, in case of further setbacks in foreign disbursements, the Government is prepared to mobilise domestic funds as a contingency to ensure continuity.
However, concerns have emerged from Parliament’s Committee on Public Finance (CoPF) over the incomplete negotiations with both the contractor, Metallurgical Corporation of China (MCC), and China Exim Bank. Committee Chairman Dr. Harsha de Silva revealed that discussions on the contractor’s claims and revised loan conditions for the reduced USD 500 million facility remain unfinished.
In a post on X, de Silva questioned the decision to alter the previous 15-year fixed loan rate of 2.5% to a variable rate ranging between 2.5% and 3.5%. “We were puzzled why the Highways Ministry wants to switch from a fixed rate to a variable rate,” he said, adding that the CoPF urged a fair and balanced arrangement that equally shares future interest rate movements between both parties.
Despite financing uncertainties, the Government has taken steps to advance construction. The Cabinet of Ministers recently approved the award of the Central Expressway Phase 3 spanning the vital Mirigama to Kurunegala stretch to Maga Engineering (Pvt) Ltd., following a competitive bidding process that selected the lowest responsive bidder.
The appointment of Maga Engineering represents a strategic shift toward involving reputable local firms in large-scale projects, with an emphasis on transparency and cost efficiency. Officials hope the move will curb cost overruns and accelerate completion timelines, crucial to meeting Sri Lanka’s infrastructure goals.
Once completed, the Central Expressway is expected to serve as a critical transport artery linking Colombo to the central provinces, easing congestion on the A1 and A6 routes and reducing travel times significantly.
Analysts view the Cabinet’s decision and renewed funding talks as a hopeful step in reviving a project long mired in financial and administrative delays, signalling a renewed commitment to deliver long-promised connectivity and economic growth.
