Japanese company to withdraw from the Central Expressway project

Japanese company to withdraw from the Central Expressway project

Written by Staff Writer

06 Jun, 2019 | 9:31 pm

Colombo (News 1st): Cabinet approval has been granted to award the 4th phase of the Central Expressway Project to a Chinese Company by the name of Gashumba. Although cabinet approval was granted for the 4th phase of the project, the First and third phases of the same project are facing major setbacks.

It has been 4 years since the construction of the Central Highway began. The initial plan was for the first phase to be constructed from Kadawatha to MIrigama, the second phase from MIrigama to Kurunegala and the Third phase from Pothuhera to Galagedara. The fourth phase was planned to be constructed from Kurunegala to Dambulla.

The construction of the first phase was agreed to be handed over to China. However, the expected loan for the project has not yet been granted by the Asian Development Bank. An agreement was struck for a loan of US$ 1 billion. However, Sri Lanka has to pay an advance of 15% before the loan is granted.

The Ministry of Highways stated that preparations are being made to seek cabinet approval for the payment of this sum. Against a backdrop where the construction of the first phase of the project is on hold, steps were taken to hand over the construction of the 4th phase of the project to China.

Meanwhile, the construction of the second phase of the Central Expressway project is being carried out by a number of local contractors through loans obtained from State Banks. Although the construction of this section from Mirigama to Kurunegala is nearing completion, this phase too has hit a stumbling block, due to issues with the construction of the interchange at Pothuhera.

The construction of the interchange was included in the third phase of the project, and thereby the project had been handed over to Japan. However, due to an urgent need to construct the Pothuhera interchange, the government presented a proposal to the cabinet to include this section under the 2nd phase of the project.

While the consideration of the proposal at the cabinet was postponed for two weeks, the minister in charge of the Kabir Hashim resigned. The Japanese company Taise has warned the government of a complete withdrawal from the construction of the third phase of the project if this section is included under the 2nd phase.

If this interchange is constructed under the third phase it will take 2 more years for the completion of the 2nd phase of the project. As a result of all of these complications, the first and second third phases of the Central Expressway project are in jeopardy.

The matter was discussed at the Parliament today (June 6). UPFA MP Dr Sarath Amunugama noted that the Colombo – Kandy expressway is an embodiment of the failures and inefficiencies of the present government. He noted that they first divided the project into three phases and after four years of idling, it is now reported that the third phase is due to be cancelled.

He went onto note that for four years, local representative visited Japan and Japanese representatives visited Sri Lanka to discuss the terms of the agreement and it was then informed to parliament that the contract was awarded to a company named Taisei, but now the deal has been cancelled. He questioned the government regarding this matter.

State Minister of Finance responding to this noted that they must not forget that the previous government was in power for a period of ten years and the present government has only been in power for four years. He added that if him (Amunugama) and his colleges had left this government a bit earlier, they could have taken these decisions and concluded this matter much faster.

MP Amungam noted that the present government has failed to make any decision. He added that this is an inefficient and unsuccessful government that is incapable of making any decision and a government that fights from morning till evening. State Minister Wickremeratne responded to this noting that the highest foreign investment to the country was reported last year. MP Sarath Amunugama, however, pointed out that 80% of the FDI received last year, is from China, therefore, the present government cannot take credit for it.

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