The long awaited expressway projects, the Central Expressway Project (CEP) and the Ruwanpura Expressway Project (REP), are to see further delays due to the Government’s decision to utilise Build, Operate, and Transfer (BOT) models for expressway constructions, The Sunday Morning learnt. It is learnt that this decision has been taken by the Government considering the economic downturn caused due to the Covid-19 pandemic. The Sunday Morning further learnt that the Government’s dire financial position had not left any room to increase its capital expenditure and, worse, even to meet the budgeted expenditure next year, making the BOT model practically the only way to go ahead with the long-delayed expressway projects. [caption id="attachment_100685" align="alignleft" width="300"] Survey conducted prior to the commencement of the construction of Section I of the CEP[/caption] However, a senior official attached to the Road Development Authority (RDA), who wished to remain anonymous, told The Sunday Morning that the construction of these projects would be delayed for at least another three months. They are hopeful that the projects would somehow raise their heads from the ground next year. The BOT model lays the least financial burden on the Treasury, but choosing an investor under the BOT model has made it difficult, especially during the economic slowdown brought about by the ongoing pandemic. The investors too are currently under stress with orders drying up, tight cash flows, and labour shortages. Furthermore, the stretched balance sheets of the companies do not allow them the leeway to take on additional debt to finance the initial cost of construction, which BOT projects entail. With revenue, in the form of toll revenue, flowing only after the completion of construction, these projects are the least preferred. Nevertheless, the delay of projects is causing the Government a financial loss economically, in addition to the already incurred losses due to the delay in commissioning the projects. As learnt by The Sunday Morning, the Government will have to absorb billions of rupees as additional cost overruns due to the delay in commissioning Section I of the CEP during the tenure of the previous Government, and the losses would have to be covered by the Treasury. It is further learnt that the Government had already incurred a loss of around Rs. 30 billion as a result of cost overruns from just Section I of the CEP from Kadawatha to Meerigama. Accordingly, the total cost of Section I of the CEP has now increased from around $ 158 million to $ 194 million. The RDA also had to pay an additional Rs. 8 billion as an advance payment to activate the Chinese loan. The cost overruns have been calculated based on the price escalations of the construction materials, from the date of signing the construction contract to the date when the construction actually commenced, according to a well-informed source at the Ministry of Highways. The 37 km Section I of the CEP from Kadawatha to Meerigama was scheduled to be constructed by a Chinese contractor at an estimated cost of around Rs. 158 billion, obtained as a loan from the Export-Import Bank of China. The construction of Section I of the CEP, which moved at a snail’s pace due to the delay in dispersing the funds of the already signed agreement covering 85% of the contract price, is yet to properly begin due to the delay on the part of the Government to meet the agreed 15% of the total loan amount. However, the contract for Section I was signed in 2015. The delay caused due to the inability to come to an agreement on the conditions mentioned in the loan contract, has caused a massive price escalation. Meanwhile, the construction of Section I of the CEP between Kadawatha and Meerigama commenced last week. Accordingly, the 37 km stretch, which was undertaken by Metallurgical Corporation of China, is scheduled to be completed in four years. Section I includes three interchanges in Gampaha, Meerigama, and Veyangoda. The construction will be done in two stages. The first stage involves the completion of five kilometres and the rest of the distance will be completed at a cost of Rs. 168.5 million. Meanwhile, according to Highways Minister Johnston Fernando, a proposal has been presented to Cabinet to construct stretches of roads on the CEP from Pothuhera to Galagedara and from Kurunegala to Dambulla. “We hope to complete construction work on these expressways within the next three-and-a-half years. We also fast-tracked and completed the construction work on the Matara to Hambantota stretch on the Southern Expressway within four months,” he said. Despite Minister Fernando’s assurance, officials claimed that the projects would be delayed under the present construction models. The construction work of the expressway was launched in 2014 and the estimated total cost was approximately Rs. 200 billion. The work was scheduled to be completed by 2018. However, the previous Government came into power in 2015 and changed the name of the project from “Kandy Expressway” to “Central Expressway” and former Prime Minister Ranil Wickremesinghe again launched the construction of the expressway by laying a foundation stone in February 2017 with the first phase expected to be completed in mid-2019. The first phase includes the following stages; Stage 1 – Kadawatha to Meerigama, Stage 2 – Meerigama to Kurunegala, Stage 3 – Pothuhera to Galagedara – Kandy, and Stage 4 – Kurunegala to Dambulla. In addition, there is a link road starting from Ambepussa to Meerigama that comes under Stage 2. Stage 3 of the project starts from the Hiripathwella Grama Niladhari Division (GND) of the Polgahawela Divisional Secretariat Division (DSD) and ends at the Palu Kopiwatta GND of the Tumpane (Galagedara) DSD. Again, Stage 4 of the project starts at the Theliyagonna GND of the Kurunegala DSD and runs through DSDs Mallawapitiya, lbbagamuwa, Mawathagama, Rideegama, Melsiripura, and Galewela, and ends at the Mirisgoniya junction of the Dambulla DSD (crossing A06), according to the RDA. On the other hand, the REP, which has also been discussed at length during cabinet meetings this year, is also yet to commence. The REP too was supposed to be converted into a BOT model and the tender documents were being finalised by the Highways Ministry last month. As such, the project was to be commenced soon after the contractors were finalised, without any delay. However, as learnt by The Sunday Morning, the funds for the project had not yet been finalised and the estimates were to be done after concluding the tender process. In July, the Cabinet officially removed the Chinese contractor from Section I of the REP (from Kahathuduwa to Ingiriya) and decided to go ahead with local funding. As confirmed earlier by Highways Ministry Secretary Ranjith Premasiri, the local funds are to be raised through state banks and the Ministry of Highways is yet to lay out a mechanism for the purpose of funding. Accordingly, the Cabinet has removed the Chinese contractor, China National Technical Import and Export Corporation (CNTIC), which was awarded the contract to construct a 26.3 km Section I of the REP from Kahathuduwa to Ingiriya in 2016 by the REP. As per the cabinet memorandum dated 26 July 2016, CNTIC was the proposed contractor for Section I of the REP. The Cabinet of Ministers approved a proposal presented by the Highways Minister to proceed with the expressway constructions using the funds of local banks and the services of local construction companies. The REP from Kahathuduwa to Pelmadulla to Ratnapura (73.9 km) has been divided into three sections for implementation purposes. Section I is from Kahathuduwa to Ingiriya (26.3 km), Section II is from Ingiriya to Ratnapura (26.2 km), and Section III is from Ratnapura to Pelmadulla (21.4 km). 100,000 km road project Despite the construction of the expressway projects being delayed, the RDA, as per the directions given by President Goatabaya Rajapaksa, is now continuing the 100,000 km road constructions project with the aim of completing it by 2024, as promised in the national policy framework “Vistas of Prosperity and Splendour”. The President stated that new bridges will be built replacing hanging, wooden plank, and small bridges. The construction of 8,000 km of roads has commenced and 400 km of it has already been completed in the last few months. He stressed that no room should be left for interruptions and delays in the construction process. “The supervision of the construction should be carried out by both government representatives and contractors and no subcontractors are allowed,” the President noted. The prioritisation of the President’s brainchild, the 100,000 km project, was questioned by some transport experts who claimed that it was a question of prioritising national interests. They also noted that the economic loss caused by the delay in constructing national expressways and the Light Rail Transit (LRT) system would be much higher than delaying some other road construction projects. According to the statistics of the RDA, the grand total of the national highways in Sri Lanka (“A”, “B’, and “E” Class Roads) is 12,496.337 km. Survey on delayed projects Meanwhile, the RDA has launched a survey to identify the number of road development projects that have not been completed yet due to construction delays. The survey had begun following Minister Fernando’s request last week to look into the delayed projects and to evaluate the possibilities of taking legal action against those who have wilfully delayed the projects. Addressing the progress review meeting of the Priority Road Project (iRoad), implemented by the RDA last week, Minister Fernando said the road projects would be taken over by the RDA if construction is delayed and the road has not been completed on time. The Minister further stated that the contractors who are postponing the construction will not be involved in future projects of the Ministry. The Minister also instructed Ministry Secretary Premasiri to submit a report on the companies that are still delaying the construction of roads, especially those whose construction work had not been completed on time. The construction of some roads was scheduled to be completed in 2018 but had not been completed yet, the Minister said. RDA Director General D.M. Dayaratne told The Sunday Morning that the number of projects that have been delayed, contractors to whom those projects have been awarded, and the total loss incurred by the Government due to the delay of the construction would be assessed, and a report would be submitted to Highways Minister Johnston Fernando next week.