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Philippines,Sri Lanka : ADB to support SRI LANKA with a US$800m loan for road upgrading venture

July 7, 2014

The Sri Lankan Information Minister Keheliya Rambukwelle has revealed that the country has secured a loan of US$ 800 million from the Asian Development Bank for the accomplishment of road upgrading projects worth US$ 906 million.

He has also said that the Cabinet of Ministers has approved the loan proposal as well.

He has further said that the Government will provide the remaining amount of US$ 106 million.

Sri Lanka will use the funds to upgrade and maintain roads linking over 1,000 villages to the highways and expressways, according to the Minister.

Sri Lanka hopes to get the first tranche of the loan worth US$ 100 million from the Manila-headquartered bank by this October. The island nation plans to use this money to upgrade and maintain 560-km of rural access roads and 130-km of national roads in the Southern Provinces with a local part of US$ 18 million.

The regional lender s loan carries an annual interest rate of 2%, with repayment period and grace period of 25 years and 5 years respectively.

The Asian Development Bank will offer the subsequent tranches of US$ 100 million in December 2014, and then US$ 200 million in 2016, US$ 150 million in 2017, and US$ 150 million in 2018. It will provide the last installment of US$ 100 million in 2020, the deadline for the completion of the project.

The country will utilize these funds to improve and maintain roads in Sabaragamuwa Province and Kalutara District, Central Province, North Central Province and North Western Province in Sri Lanka.

Once the complete project is accomplished in 2020, the provincial and local authorities will have 2,200-km of access roads that have undergone improvements and converted into 'all weather' type and maintained for a seven-year period. The completion of the project will facilitate the country to have 400-km of national roads as well.

Though Sri Lanka has reinforced its road network considerably, mainly after the end of the three-decade long conflict, the country has to spend much for the maintenance of the same.

Sri Lanka imposes higher tax rates on petrol, private vehicles and motor cycles, although these are lighter and not much damaging to the roads, its tax rates on diesel and heavy commercial vehicles are low, reflecting a biased state intervention rather than offering an impartial regulation.

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Source: TendersInfo (India)

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