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Sri Lankan Government Clears Rs. 361 Billion Debt to Road Development Contractors

April 03, Colombo (LNW):Transport, Highways, and Mass Media Minister Dr. Bandula Gunawardhana announced yesterday that the government has successfully settled an outstanding amount of Rs. 361 billion owed to contractors of the Road Development Authority (RDA).

Gunawardhana explained that this payment was a result of the government’s commitment to fulfill conditions set by the International Monetary Fund (IMF), which stipulated that contracts cannot be executed on credit. “The government has given an undertaking to the IMF to settle such credit within a month,” he affirmed.

Highlighting the fiscal challenges faced by the government, Gunawardhana revealed that while the government’s revenue in 2023 amounted to Rs. 3 trillion, recurrent expenditure exceeded Rs. 4 trillion. Despite this, only Rs. 5 billion in outstanding payments remain to contractors.

The Minister assured that contractors were promptly paid, with funds directly credited to their bank accounts. He emphasized that there was no preferential treatment, and all contractors were treated equally.

Regarding the allocation for road construction in 2024, Gunawardhana disclosed that only Rs. 20 billion has been earmarked for this purpose. He warned that failure to settle outstanding bills could hamper the development of roads, estimating that approximately 18,000 to 20,000 kilometers of roads could be improved if debts were cleared.

Gunawardhana acknowledged the challenges faced by contractors due to delayed payments by the government. In response, he personally met with contractors and instructed them not to engage with the ministry’s accountants responsible for calculations, indicating a commitment to streamline payment processes and alleviate contractor grievances.

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