Thursday, 21 August 2014 00:00
-
- {{hitsCtrl.values.hits}}
By Ashwin HemmathagamaOur Lobby Correspondent
Taking advantage of the strategic development programs and the prevailing peace in the country, Sri Lanka has started borrowing at 2% from international agencies and financial institutions, Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr.Sarath Amunugama told Parliament yesterday.
According to a list tabled in the House, the Government has borrowed $ 98 million and the State institutions $ 642 million in 2010 from EXIM Bank of China. In 2011 Government borrowing from EXIM bank was at $ 193.5 million while the institutional borrowings were reported at $ 150.9 million. In 2012 the State borrowed $ 238 million while $ 379 million was borrowed through State institutions. Last year the Government had borrowed $ 396 million from EXIM bank and State institutions $ 412 million.
“We borrow from CDB Bank as well. Our borrowings are not limited to EXIM Bank of China. When we take loans, other banks also compete to lend. But China is in the forefront lending to other parts of the world,” he noted.
Dr. Amunugama explained the high interest on loans for some development projects such as the Katunayake Highway was because it was negotiated during the conflict and as such had to offset higher risks for the lender.
“It is not just taking money from them and not a conspiracy to lend only to Sri Lanka. They have considered the strategic values of the Hambantota Port and the Katunayake Highway. But the discussions were held during war time, which pushed the rates up. Now we have a stable country and the rate has come down to 2%. There are no commission payments involved in these borrowings,” the Minister said in response to supplementary questions raised by Opposition MP Ajith Perera seeking the reasons for borrowing from EXIM Bank of China without tenders or any other initial inquiries.
