Major Sri Lankan rail scheme goes to Chinese firm thanks to loan

14 March 2014 0 Comments

14 March 2014

A Chinese company will build the second and third stages of a rail project valued at $600m in southern Sri Lanka, Xinhua reports.

The China National Machinery Import and Export Corporation (CNMIEC) will construct the line between the towns of Beliatta and Kataragama, according to Transport Minister Kumara Welgama.

Funding will come as a loan from the Exim Bank of China.

CNMIEC is already building the first phase of the line, a 28km stretch from Matara to Beliatta, a cost of $272m.

An existing rail line in Sri Lanka (calflier001/Wikimedia Commons)

“We have decided on the Chinese company as the Exim Bank has agreed to grant a loan for the project,” Welgama told reporters.

The first phase of the railway line is expected to be completed by 2016.

The railway line will run parallel to a highway, also built mostly with Chinese funding.

Xinhua reports that when Sri Lanka ended its 30-year war in 2009, China has emerged as the island’s largest loan provider, granting $1.2bn in 2009 and $821m in 2010.

In 2013 China supplied more than a quarter of all foreign funding into Sri Lanka, Xinhua said.