China delayed loan to Sri Lanka expressway for 4.5 years: ex-highways minister
ECONOMYNEXT – China delayed a loan for an expressway to Kandy for 4.5 years though the building contract was awarded to a Chinese contractor was re-confirmed during his time, former Sri Lanka Highways Minister Lakshman Kiriella said.
Sri Lanka’s central expressway which runs from Colombo to Kandy and is then expected to run to Jaffna is being built in three segments.
“We started the expressway from Kadawatha. The project had three stages. Kadawatha to Meerigama, Meerigama – Kurunegala and Pothuhera – Galagedara,” Kiriella told parliament during the highways ministry vote.
“In 2014, the government of Mahinda Rajapaksa had decided to award the first segment of the project to a Chinese company called MCC (China Metallurgical Group Corporation). There was an agreement in 2014. So we gave it to MCC.”
“But the Chinese government did not give money.
“They delayed it intentionally (Hithar matharmer parakk-ku keruwar). For four and a half year the Chinese government did not give the money,” he claimed.
Kiriella served in the Sirisena-Wickremesinghe administration which suspended the Colombo Port City Project. Sri Lanka then had to allow the Chinese firm to reclaim more land as compensation, reports said.
The administration also had a dispute with MCC over the construction cost of the outer circle highway in the capital Colombo.
China however gave an 800 million dollar budget support loan to Sri Lanka during the last administration.
Kiriella said a second segment of the Central Expressway was given to local construction companies to be built with domestic financing.
“Then the second segment Meerigama to Kurunegala was given to local constructors,” he said. “And we built 37 kilometers out of the 40 kilometers. Only 3 kilometers remain to build. This government is still struggling to build that part.”
He said it was the first time domestic contractors had been allowed to build expressways.
Kiriella said the third section was supposed to be built with financing from Japan by Taisei, but it ran into controversy.
“In 2016 we were planning to start the constructions prior to Kandy Perahera. We gave the contact to the Company called Taisei,” Kiriella said.
However, with due loan repayments from the Sri Lanka the Taisei Company withdraw from keeping the Bid Bond to take the contract.
“Normally 10 percent should be placed as the bid bond but this Taisei company did not do that.” Kiriella said.
“They said the Sri Lankan government already owed them money and cannot place any bid bonds. This was in 2016.”
“Then several controversies took place between our party leaders regarding this and in due time the government changed.”