Sri Lanka political crisis derails US$1.7bn LRT loan as deadline passes

ECONOMYNEXT  –  A 1.7 billion dollar equivalent loan to build a light rail transit system in Sri Lanka’s capital Colombo funded by Japan has been derailed by a political crisis with the planned deadline for signing the loan having now passed, a former minister said.

Champika Ranawaka, Minister of Megapolis Development in charge of the light rail project before a political crisis erupted in Sri Lanka with President Maithripala Sirisena, the loan from Japan is now

"The loan was to have been signed in November 22," he told parliament shortly before the assembly passed a motion to cut spending on disputed ministers appointed by President Sirisena.

The Speaker of Sri Lanka’s Parliament has said that the island did not have a legal Prime Minister and Cabinet after multiple motions of no-confidence was passed against Rajapaksa.

He said a number of other loans were also on hold.

Sources close to lending agencies say signatories for the loans which were decided and approved earlier are no longer in office and there are doubts about the legality of new appointees, making it difficult for lending agencies to go ahead.

A 500 million dollar grant from Millennium Challenge Corporation of the US which was to have been signed in December is also in the balance, Ranawaka said.  (Colombo/Nov30/2018)


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