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Tuesday January 31st, 2023

Sri Lanka gets Japanese Rs48bn soft loan for light rail

ECONOMYNEXT – Sri Lanka Monday signed an agreement with Japan for a soft loan to build a light rail transit (LRT) system connecting the capital Colombo’s commercial centre with the Malabe suburb, cutting travel time to about 30 minutes. ‘

The entire rail track and stations will be on elevated viaducts to minimize requirement of land acquisition, Japan International Cooperation Agency (JICA), the Japanese aid agency, said in a statement.

The concessionary loan agreement for 30 billion yen (about 48 billion rupees) between the government of Sri Lanka and JICA is for engineering services and construction of an LRT line between Malabe and Colombo Fort.

“In order to promote technology transfer and economic cooperation between Sri Lanka and Japan, JICA’s loans for this project are provided under Special Terms for Economic Partnership,” the statement said.

The loan will carry an annual interest rates of 0.1 percent for civil works and equipment cost, 0.01 percent a year for engineering services cost and have a 40-year repayment period including 12 years’ grace period.

“JICA is proud to be the partner of the government of Sri Lanka in establishing the very first urban LRT line in Sri Lanka. It will fundamentally change the face of public transport in this country, ease traffic congestion and improve the environment of Colombo city,” said Fusato Tanaka, Chief Representative of JICA Sri Lanka Office.

“We hope the government will take sustainable measures to ensure proper operation and maintenance, so that the benefits of Japanese technology and concessionary funding could be enjoyed by the public of Sri Lanka.”

At peak travel times in the morning and evening, trains are planned to run every 2-3 minutes, with each four-carriage train having a passenger capacity of over 800, which could be increased by adding more carriages in future when necessary.

With aN 80km/hour top speed, travel time from Malabe to Fort will be about 30 minutes,  including stopping time at stations, with the LRT, the statement said.

The Malabe-Fort LRT line with a total length of about 16 km, with 16 stations, will connect Colombo’s commercial hub with the administrative capital, and significantly reduce travel time in the most congested transport corridor in the country, and the only major corridor currently not supported by railway.

The stations are placed at frequently accessed locations and include Malabe-IT Park, Battaramulla, Rajagiriya, Cotta Road Railway Station, National Hospital, up to the current Fort/Pettah Railway Station.

JICA said that to facilitate inter-connectivity with other public transport modes, multi modal terminals are proposed at Malabe (together with bus terminal) and Cotta Road (connecting with railway).

At Fort/Pettah, the LRT line will connect to the planned Multi Modal Transport Hub accessible to both railway and bus.

“Station facilities and LRT carriages will be designed to ensure accessibility to persons with disabilities, as well as passengers with small children and senior citizens,” JICA said.

The feasibility study, including the Environmental Impact Assessment for the Malabe-Fort LRT line, was conducted with grant financing from JICA and has been approved by the Central Environmental Authority.

Although the elevated viaduct will minimise the requirement, some land acquisition is needed at the LRT depot and some of the station locations, JICA said.

The Ministry of Megapolis and Western Development, the executing agency for the project, will acquire land in accordance with the National Involuntary Resettlement Policy, and JICA’s environmental and social considerations guidelines to ensure inclusive development through public projects.

JICA said that since the railway tracks and stations are constructed at high elevation and over national roadways with high traffic volume, appropriate safety measures during construction are critical to ensure the safety of the construction personnel and the general public.

“JICA will continue to pay special attention to safety aspects in implementation of the project.”

JICA is the implementing agency for Official Development Assistance from the government of Japan, and is one of the largest contributors to the transport sector in Sri Lanka.

JICA financed 66km of the Southern Expressway and Kottawa to Kadawatha section of the Outer Circular Expressway. JICA is also currently financing the new bridge across the Kelani River at Peliyagoda which is planned to be completed in 2020.
(COLOMBO, March 11, 2019-SB)
 

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Sri Lanka shares down for 2nd day as tax hike, delay in Chinese debt assurance weigh

ECONOMYNEXT – Sri Lanka’s shares edged down on Tuesday as worries over delay in financial assurances from China which is mandatory for a $2.9 billion dollar IMF loan and rise in protests against tax hike kept investors in check, analysts said.

The main All Share Price Index (ASPI) edged down by 0.28 percent or 24.62 points to 8,865.05. It fell for the second session after hitting more than three-month high.

“The market is looking for more macro cues because of faster Chinese debt assurance was expected. The market is also hit by fall in corporate earnings due to high taxes,” an analyst said.

China has given an initial response on debt re-structuring to Sri Lanka though analysts familiar with the process say it is not a ‘hard assurance’ sufficient for the IMF program to go through.

The International Monetary Fund is working with China on extending maturities of Chinese loans to defaulted countries like Sri Lanka, as there is resistance to hair-cuts, Managing Director Kristalina Georgieva told reporters on January 14.
The earnings for first quarter are expected to be negative for many corporates with higher taxes and rising costs. However, investors had not expected earnings to be low in the December quarter because of year end pick ups on heavy counters, the analyst said.
Earnings in the second quarter of 2023 are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

However, the central bank said the IMF deal is likely in the first quarter or in the first month of the second quarter.

The most liquid index S&P SL20 dropped by 0.64 percent or 17.74 points to 2,764.51 points.

The central bank has said it could cut interest rates in future when the country sees fall in inflation, which has already started decelerating.

The market saw a turnover of 1.7 billion rupees, slightly lower than the month’s daily average of 1.8 billion rupees and while being significantly lower than 2022’s daily average turnover of 2.9 billion rupees.

The bourse saw a net foreign inflow (NFI) of 93 million rupees extending the net offshore buying to 413 million rupees so far this year.

Top losers were LOLC, Royal Ceramics Limited and Hayleys. (Colombo/Jan31/2023)

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Sri Lanka exports fall in December as global recession weighs

ECONOMYNEXT – Sri Lanka’s merchandise exports earnings fell 9.7 percent in December year-on-year as the island nation saw a drop in buying from its key export destinations which are facing a looming recession after the Russia-Ukraine war.

The earnings from the merchandise exports recorded $1.04 billion  in December 2022 compared to the same month in the previous year as per the data released by the Sri Lanka Customs.

“This was mainly due to the decrease in export earnings from Apparel & Textiles, Tea, Rubber based Products, and Coconut based Products, Food & Beverages, Spices & Essential Oils and Fisheries products,” the Export Development Board (EDB) said in a statement.

“The reason for this decline was due to the ongoing recession in major markets due to rising cost of production, energy etc. Imports declined sharply due to inflation and demand for goods and services are reduced.”

However, Sri Lanka saw a record export earning of $13.1 billion in 2022 due to increased demand in the key exports throughout the year

Earnings from all major product sectors except Electrical & Electronic components as well as Diamonds, Gems & Jewellery fell in December.

Exports of Apparel & Textiles decreased by 9.6 percent to $480.3 million in December 2022.  Export earnings from Tea fell by 3 percent to $107.3 million, Rubber and Rubber Finished products dropped 20.3 percent to $74.5 million,

However, export earnings from the Electrical & Electronics Components increased by 16.18 percent to $42.9 million in December 2022, while Diamond, Gems & Jewelry jumped 35.7 percent to $30.8 million. (Colombo/Jan31/2023)

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Sri Lanka records over 6,000 dengue cases in first three weeks of January

ECONOMYNEXT – Sri Lanka recorded over than 6,000 dengue cases in the first three weeks of January 2023 after a spell of heavy monsoon rain though a drop in cases is likely from February, officials said.

Health officials identified 6,204 dengue patients by January 22, up from 5,793 recorded in the corresponding period last year.

“A rise in cases can be observed in the November-January period with the heavy rain due to the northeast monsoon,” an official from the National Dengue Control Unit told EconomyNext.

Of all reported cases, 46.3 percent were from the Western Province, official reports showed.

Akuressa, Batticaloa, Eravur, Trincomalee, Madampe, Badulla, Eheliyagoda, Kegalle, Kalmunai North and Alayadivembu MOH areas were identified as high-risk areas for dengue during the third week of January by the health officials.

“We are expecting a decline in dengue cases soon. The Western province is always in the top position with the highest number of dengue cases. Apart from that, we are seeing a higher number of cases during this period in areas like Puttalam, Jaffna districts. A certain number of cases have also been recorded in the Kandy district,” the official said.

“Usually the cases peak in December, but they decline by February. This year, too, we are facing this scenario. There is an increase of dengue during the months of November, December and January”.

Due to the economic situation in the country, the Public Health Inspectors (PHIs) in an earlier report said, diesel and pesticides are not being provided by the ministry.

However, rejecting the allegation, the official from the NDCU said the government has provided enough funds for get the necessary pesticides but it is being used according to a scientific method to avoid building a resistance in the dengue mosquito.

“The recommendation is to do the fogging if there is a dengue outbreak or if there are few patients reported from the same locality.

“If you use this pesticide haphazardly, the mosquitos will develop resistance against it,” the official said, adding that there are adequate stocks of the chemical available. (Colombo/ Jan 31/2023)

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