It has been over three months since Sri Lanka finalised a deal with the Official Creditor Committee (OCC) of the Paris Club to restructure its bilateral debt.
The finalisation of bilateral debt restructuring was touted as a turning point for the country, promising the recommencement of key infrastructure projects, particularly the construction of expressways that had been halted due to the economic crisis. However, investors have yet to come forward to revive these projects, leaving the Government’s ambitious infrastructure plans in limbo.
In addition to the Paris Club agreement, Sri Lanka also finalised a separate deal with China’s Export-Import (Exim) Bank to restructure debt. President Ranil Wickremesinghe announced that these agreements would defer all payments on bilateral loans until 2028, giving the country some breathing space. Moreover, the repayment terms were extended until 2043, offering what appeared to be a much-needed reprieve for the cash-strapped nation.
These developments were hailed as key milestones in the country’s recovery, sparking expectations that stalled projects, such as the construction of major expressways, would resume.
However, the optimism appears to have been premature. While the debt restructuring eased some immediate financial pressures, it has not translated into a flood of investment, as was initially promised.
The Road Development Authority (RDA), the body responsible for overseeing Sri Lanka’s expressway projects, is still in the process of preparing proposals to attract Public-Private Partnerships (PPPs). Until then, key infrastructure projects remain stuck in neutral, The Sunday Morning learns.
Toll of stalled projects
Among the most anticipated projects are the Ruwanpura Expressway Project (REP), Central Expressway Project (CEP), and Elevated Highway Project (EHP) from the New Kelani Bridge (NKB) to Athurugiriya. These projects have been delayed for years due to the economic crisis and the situation has left the public facing various hardships, from longer commute times to economic inefficiencies.
The Ruwanpura Expressway, designed to connect the Western Province with the Sabaragamuwa Province, has been particularly impacted. Initially divided into three phases, this 71 km expressway was supposed to be a vital connection between Kahathuduwa, Ingiriya, and Pelmadulla via Ratnapura.
Phase I of the project, spanning from Kahathuduwa to Ingiriya, was awarded to Maga Engineering after the Government removed a Chinese contractor due to financial concerns. However, financial difficulties soon led Maga Engineering to abandon the project altogether. The total cost of the expressway was initially estimated at Rs. 276.3 billion, but these figures could rise given the delays and complications.
The situation is equally complex for the Central Expressway, which was to be constructed in four sections. Section I, stretching 37 km from Kadawatha to Mirigama, is being built by a Chinese company with funding from China’s Exim Bank. However, the construction was halted due to Sri Lanka’s ongoing economic crisis and the temporary suspension of funds from the bank. While Section II, a 40 km stretch between Mirigama and Kurunegala, has been completed by local contractors and opened to the public, the future of other sections remains uncertain.
The 34 km Section III of the Central Expressway, from Pothuhera to Galagedara, was initially set to be built by a Japanese contractor at a cost of Rs. 135 billion, with financing from the Tokyo Mitsubishi Bank (TMB).
However, in 2020, the Government removed the Japanese contractors from the project due to delays in finalising the agreement. This decision has left Section III in limbo, with no clear path forward. While there have been recent visits from Japanese investors, formal discussions have yet to take place with the Japanese Embassy regarding the resumption of the project.
Section IV, which runs from Kurunegala to Dambulla, has also been a victim of indecision. Initial discussions suggested that a UK-based contractor would be awarded the project, but nothing has yet been finalised. As the RDA continues to look for investment, the future of this section remains as uncertain as the rest of the Central Expressway.
The EHP, which is designed to connect the NKB to Athurugiriya, has faced its own unique set of challenges. Initially, the RDA considered a Build-Operate-Transfer (BOT) model for the project, hoping to attract private investors. However, the project has been plagued by legal disputes, with five court cases currently pending regarding the proposed route.
One of the main controversies revolves around the environmental and social impact of the project. Several proposed routes pass through densely populated residential areas, sparking protests from affected communities. An alternative route, which would avoid residential areas, has also faced opposition due to its potential impact on paddy fields in Battaramulla and Thalangama.
As reliably learnt, the RDA has yet to make a final decision, and the project remains stalled until a resolution can be reached.
Frustration mounts
The delay in key infrastructure projects, particularly the stalled expressways, has had a tangible impact on everyday life. Promises of development and improved transport networks seem distant, leaving residents frustrated as they face daily inconveniences. The Central Expressway, in particular, has left those depending on it disillusioned.
Anura Wijesinghe, a resident of Kurunegala, expressed his frustration with the slow progress. “The delay in completing the Central Expressway has been a major inconvenience for us. The road from Kurunegala to Dambulla is crucial for businesses and travel, but it feels like this project has been forgotten,” he said.
“We were promised faster access to Colombo and other key areas, but now we’re stuck on slow, congested roads. Every day we hear about foreign investment and agreements, but on the ground, nothing has changed,” he added, reflecting the growing dissatisfaction in the region.
For businesses that rely on efficient transportation, the Central Expressway was supposed to be a gamechanger. Priyanka Fernando, a small business owner in Mirigama, shared how the delays had affected her livelihood.
“The incomplete sections of the Central Expressway are hurting small businesses like mine. We were counting on improved transportation to bring more customers and reduce delivery times, but the stalled project has kept us in the same slow-moving situation.
“The promises to complete the expressway feel empty at this point. It’s frustrating to watch the Government talk about progress while we’re left to deal with delays that affect our livelihoods,” she said.
The situation is not unique to the Central Expressway. Across the country, delayed projects are taking a toll on communities that have been waiting for years for improved infrastructure. In the Sabaragamuwa Province, commuters like Ravi Perera from Ratnapura are struggling with the consequences of the halted Ruwanpura Expressway.
“The delays in the Ruwanpura Expressway project are affecting our daily lives. What was supposed to be a faster route for commuters is still a distant dream. We spend hours stuck in traffic on narrow, congested roads, and the economic toll is massive.
“Many small businesses rely on efficient transport, but this hold-up has left us struggling. It feels like the promises of improved infrastructure are just empty words,” he said, pointing to the growing sense of frustration.
In Athurugiriya, residents continue to wait for the promised EHP, which was supposed to ease traffic congestion in the area. Nirosha Silva, a resident, described the impact of the delay.
“The EHP was supposed to ease traffic in our area, but instead, we are left with nothing but uncertainty. Every day, the roads get more crowded and getting to Colombo has become a nightmare.
“The Government promised that these projects would resume quickly after the debt restructuring, but here we are, waiting, with no progress in sight. It’s frustrating to watch these plans stall while we continue to suffer,” she said, echoing a sentiment felt by many in the region.
Next steps
According to RDA Director General S.M.P. Suriyabandara, efforts to restart these projects are ongoing, but progress remains slow. While there has been interest from Japanese investors for Section III of the Central Expressway, formal discussions have yet to take place. Similarly, the RDA continues to explore investment opportunities for Section IV and the EHP.
Meanwhile, the Ministry of Transport and Highways is working on proposals to open these projects to PPPs. Ministry Secretary Ranjith Rubasinghe confirmed that the proposals were expected to be finalised within a month.
He said: “The Government is looking to include these infrastructure development projects in the next budget, signalling the administration’s commitment to moving forward.”
Nevertheless, according to the 2024 Budget proposals, key investments have been allocated for the development of Sri Lanka’s expressway infrastructure. This includes Rs. 45.1 billion for the construction of the 39 km-long Kadawatha-Mirigama section of the expressway and Rs. 25.0 billion for the 5.3 km Port Access Elevated Highway from Ingurukade Junction to Port City.
Additionally, Rs. 8.5 billion has been earmarked for the construction of the 12 km stretch of the Central Expressway from Pothuhera to Rambukkana. To streamline traffic management, Rs. 5.0 billion has been allocated for the establishment of an automated toll collection system at every interchange of the expressway.