• Fully-owned by Government with majority of shares to be held by RDA 
• Company to be authorised to lobby for loans
• All expressway ownership to be transferred to new company 
• Current expressways to be used as collateral for future loans 

In a bid to raise funds for future development projects, the Government yesterday gave approval to establish a separate entity to develop and manage “critical infrastructure projects”, with powers to independently lobby for financial assistance. 

The fully Government-owned entity to be known as the Special Infrastructure Company (SIFCO) will be managed by the Treasury Secretary and the Road Development Authority (RDA). Presenting a proposal to Cabinet, Minister of Finance Ravi Karunanayake said that the new public company would be used as a “transitional vehicle” to accelerate critical development projects enabling local capital market investors to provide funding “through a Takeover, Operate and Transfer basis or other internationally accepted investment modalities.” 

With the RDA holding a controlling stake in the company, the Ministers of Finance and Highways will have the authority to appoint directors to the new entity and authorise the Efficiency and Management Unit of the General Treasury to support day-to-day financing of SIFCO. 

According to the methodology proposed by the Minister, the company will own all the assets of expressways – the Southern, Outer Circular, Colombo which Katunayake valued at $ 1.65 billion - and undertake future development and recently commenced projects which require $ 4 billion within the next four years. 

Once incorporated, the company will also be able to raise capital from investors or arrange for financing for future projects using expressways as collateral, the Cabinet paper said. It added that SIFCO would operate as an independent agency which “will not come within the Government borrowing program.”

The revenue from the expressways earned will be channelled to repay the loans, while the Treasury will arrange guarantees to the lenders as needed. However, the Treasury will cover the shortfall in the event that the revenue of the expressways is inadequate to repay the debt taken by SIFCO. 

Draft Bill on Credit Information Service Providers to be gazetted soon

The Government yesterday gave the green light for the proposed Credit information Services Providers Act to be presented in Parliament. 

The Bill to be gazetted provides credit information held by a private entity to identified users to enable better lending practices, Finance Minister Ravi Karunanayake informed Cabinet this week. 

Current law provides for the sharing of credit information only by licensed commercial banks on a voluntary membership basis in the Credit Information Bureau (CRIB), excluding “a wide range of other users who could benefit from accurate and complete credit information” including finance companies, microfinance companies, insurance companies, investment companies and such similar institutions dealing with credit at both the macro and micro levels from accessing and sharing credit information. 

According to the Minister, the new Act will empower lenders to show better judgement on credit applicants leading to a reduction in cost through a reduction in default rates. 

The draft of the Act, which was approved by Cabinet last May, has gotten approval from the Attorney General’s department, Karunanayake informed Cabinet this week.