Cabinet nod for $ 800 m loans

•  MoU for $ 580 m from China Development Bank
• $ 200 m World Bank loans for rural roads  

By Uditha Jayasinghe

Cabinet approval has been given for nearly US$ 800 million worth of projects to continue the Government’s infrastructure development.

Acting Cabinet Spokes-man and Petroleum Mini-ster Anura Priyadarshana Yapa told media that a Memorandum of Unders-tanding (MoU) would be signed between the Government and China Development Bank Corpo-ration for US$ 580 million to continue infrastructure projects in 2013.

The Cabinet paper, which was presented by President Mahinda Rajapaksa, outlined that the MoU would be valid for three years and would be used to finance three key projects by the Government. Road development worth US$ 300 million, water supply projects up to US$ 200 million and a National School of Business Management project using up US$ 80 million were listed as the main funnelling points for the cash.

Cabinet...

The MoU approved on Wednesday is a follow up to another MoU that was signed 23 June 2011, according to the Cabinet paper obtained by the Daily FT.

It also stated: “Both parties intend to promote cooperation in the priority areas of infrastructure construction projects such as highways, expressways, water supply and education in Sri Lanka, in addition to other priority projects with great importance to the economic developments and trade relations between China and Sri Lanka.”  

In addition Cabinet approved two agreements with the World Bank worth US$205 million to improve provincial roads.

US$ 105 million has been allocated to rehabilitate Hulandawa-Kahambana Road in the Uva province. The distance of 14.5 km will be built by Consulting Engineers and Contractors for an amount of Rs. 742 million.

A second Cabinet approval was given to a US$ 100 million project to upgrade the Colombo-Galle-Hambantota-Wellawaya (A2) Road and the Peliyagoda-Puttalam Road. The work will be carried out in four components with contracts being given to Maga Engineering, joint venture of Hovael Construction and CML-MTD Construction, Access Engineering and Tudawe Brothers.  This Cabinet paper was also presented by President Mahinda Rajapaksa.