Govt to re-negotiate USD 400 mn ADB loan
The Government is re-negotiating with the Asian Development Bank to obtain USD 400 million for road development and also settle long overdue amounts due to local contractors, Minister of Transport, Highways and Mass Media and Cabinet spokesmen Dr. Bandula Gunawardena said.
“We are hoping to use part of this to repay some of the road contractors which were long overdue. In addition the government also hopes to restart some of the stalled road and bridge development projects that are currently on hold.”
Dr. Gunawardane said that when a country goes in for ‘self default’ foreign funding they do not realize and they are waiting for the IMF bail out to overcome this issue and obtain the ADB’s USD 400 million assistance. The investment program will improve the accessibility of the road network in Sri Lanka’s rural areas, and thereby increase the involvement of the rural population in nationwide economic and social development. Government does not plan to initiate any new projects from this ADB of USD 400 million. Meanwhile Chairman, Managing Director of Sripalie Contractors Ruwan De Silva and member several construction chambers said that over Rs. 160 million is owned by the government to local constructors for building government properties and engaging road development projects. “This is overdue for around several years and despite appeals to successive governments this amount is yet to be paid and we are facing issues in repaying bank loans.”
He said that due to this several small time contractors who took sub contracts have shut down and even big companies like them are feeling the punch. This has created uncertainty in the employment of professionals and workforce who earned a living from the industry.
“It may be fair for the government not to start any new mega development projects at this time, but our arrears should be paid soon.”
Meanwhile Dr. Rohan Fernando from the Ceylon Institute of Builders earlier said that after numerous requests a supplementary estimate to the vote-on account was presented to the Parliament seeking approval to spend an additional sum of Rs.156 billion towards settling the long outstanding payments for the work completed by the construction companies and others during the year 2019. “However it was disheartening to note that the Government was forced to withdraw the estimate due to the refusal of the opposition parties.”
The construction industry which was at its peak following the end of the war in 2009 for about a decade contributed almost 7% to the GDP of the country and has now declined to around 4%.