Written by Staff Writer
24 Mar, 2019 | 7:28 pm
Colombo (News 1st): The Central Expressway continues on a highway of trouble with Japan imposing tough conditions for a US$ 1 billion loan.
Japan’s tough conditions include the cancellation of the project if bribery or corruption is involved to award the billion dollar loan.
The loan is of a commercial nature and is to be used for the third phase of the Central Expressway project to build the 32 km from Pothuhera to Galagedara stretch.
Quoting a senior official, the Sunday Times newspaper reported that in the event of arbitration, the Japanese are insisting on Japanese law.
Secondly, the Japanese have linked the International Monetary Fund loan facility to the project loan stating that it will be cancelled if the IMF facility is withheld.
However, questions arise as to why Japan did not take the same stand when negotiations were being conducted with Tokyo Mitsubishi Bank to grant a facility with an exorbitant interest rate and a significantly high insurance premium?
Why didn’t Japan hold the same stance with regard to the Taisei Corp., a contractor with a dubious record?
The Japanese Government’s response to these questions is much anticipated.
The Treasury’s External Resources Department Director General, Priyantha Rathnayake, told the Sunday Times “the government was not agreeable to such conditions as it was difficult to negotiate on these terms.”
He said the loan under negotiation had no link with the IMF facility and the government could not be held responsible if a third party got involved in a bribery issue.
He added “The loan was proposed by Japan. The contractor and the consultant were proposed by Japan. Therefore, there should be flexibility in approving the loan. We will be forced to look for other options if there is no flexibility”.
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