Cabinet accepted
this week a plan by Roads and Highways Minister Johnston Fernando to launch
procurement activities related to the development of a by-pass tube in the
urban area of Kandy, for which Korea's Economic Development Cooperation Fund
has agreed to provide financial facilities amounting to $199.27 million.
The by-pass
tunnel mooted as a solution to congestion of vehicles in the urban area of
Kandy, a project whose total estimated cost is $252.30 million. The project
consists of four 5.5 km long tunnels from Suduhumpola to Tennekumbura via
Bogambara and Ampitiya, which will be the lengthiest tunnel in Sri Lanka.
Korea Exim bank
will finance this project with a very concessional interest rate EDCF loan of
0.15 percent and a repayment period of 40 years, including a grace period of 10
years. The project executing department will be the Sri Lankan Ministry of
Highways and Higher Education, whereas the Road Development Authority (RDA)
will be the project implementing entity.
The project's
main objective is to relieve traffic congestion in the center of Kandy by
constructing bypass tunnels for many vehicles that want to go to Kandy's West
or East without reaching Kandy Lake City. After completion, the tube expected
to reduce the passage time from Suduhumpola to Tennekumbura during rush hour
traffic from two hours to less than 30 minutes. In doing so, the Kandy tunnel
will save money by reducing additional fuel consumption and air pollution near
the Sri Dalada Maligawa (Sacred Tooth Relic Temple).
Moreover, the
tunnel will improve Kandy's economy by providing a short link between the Kandy
industrial zone and the A1 road to Colombo, where container terminals located
for export.
The construction
project for the Kandy tunnel has not only economic importance but also a
diplomatic impact. The decision by the Korean government to provide $200
million for this project comes at a significant time, as 2017 marks the 40th anniversary
of Sri Lanka-South Korea diplomatic relations.
Korea's
Export-Import Bank (Korea Exim bank) lends the Official Development Assistance
(ODA) loans to international development and collaboration through the Economic
Development Collaboration Fund. In 1990, the bank received its first ODA loan
to repair the Colombo-Galle road (A2). The bank has, as of now, funded $805
million for 28 Sri Lankan development projects.
Korea Exim bank
also provides funding to facilitate bilateral economic cooperation for
international trade and overseas investment. Korea Exim bank has received $386
million since 1978, both for trade between Sri Lanka and Korea as well as for
foreign direct investment by Korean companies in Sri Lanka.
OSL Take: The government of Sri Lanka has launched
several programs to attract foreign investments to the country. The recently
held investment promotion program in Seoul is one such venture. The exposure
received by Sri Lanka through such promotions has resulted in many foreign
businesses/investors expressing interest and exploring business/investment
opportunities in the island nation.
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