Will Sri Lanka’s expressways generate enough revenue?

Will Sri Lanka’s expressways generate enough revenue?

Written by Lahiru Fernando

15 Oct, 2017 | 9:23 pm

“Sri Lanka’s expressways do not require a Public Private Partnership (PPP) type financial model.”

The above was reported by the Sunday Times newspaper, which quoted a team appointed by the Road Development Authority Chairman.

The Ministry of Highways planned to hand over expressway operations and management to a Chinese company. This plan provoked a strong opposition from unions.

Following the union retaliation, a committee was appointed as-per instructions of the Cabinet Committee on Economic Management.

The Sunday Times has obtained a copy of its report, which says that “the analysis does not warrant going for PPP type financial model”.

However, a PPP can be formed for investment in expressways between the RDA and the State-owned Bank of Ceylon (BOC).

The RDA Chairman formed a team, which has now spoken to the Sunday Times, and instructed them to study the following;

  • Income generation of expressways since inception
  • Maintenance cost and other relevant expenditure
  • Maintenance plan for the next ten years
  • Adequacy of revenue to meet the above cost.

The committee is saying that the expressways will generate a positive net cash flow every year between 2017 and 2027.

However the government has expressed the importance of establishing Private Public Partnerships in the past.

Speaking at the Asia Pacific Business Forum that opened in Dhaka on the February 8, 2017 -Commerce Minister Rishad Bathiudeen expressed the views of Prime Minister Ranil Wickremesinghe to switch to Privately funded PPP’s.

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