Government irons out cost estimate issues of Chinese- funded highway projects
The Government has ironed out cost estimate issues on several highway projects that were being carried out with Chinese financing, Highways Ministry officials revealed.
Certain changes will be made to highway construction plans in consultation with contractors with the aim of bringing down costs and the work of such projects will commence shortly, they said.
Minister of Highways and Investment Promotion, Kabir Hashim last Sunday held a discussion with Chinese Ambassador Yi Xianliang, on highway projects which are being financed by China to restart some of these projects, a senior official of the Ministry said.
The Outer Circular Highway phase 3 (OCH 3) between Kadawatha and Kerawalapitiya will com- mence within the next few weeks, he revealed.
A review committee appointed by the Minister to negotiate with contractors had proposed changes in scope that could potentially achieve cost savings in the region of Rs. 25 billion.
The estimated cost will now be reduced to Rs. 41.7 billion from Rs. 66.7billion earmarked by the previous regime, he said.
The project, which was amended after it was reviewed by this committee appointed to evaluate technical and financial aspects of highway projects, received Cabinet approval on April 22.
Further to these negotiations the government has released a part of the mobilisation fees and work on the OCH 3 project is expected to commence soon, a media release issued by the Ministry disclosed.
The construction of the 9.32 km long section from Kadawatha to Kerawalapitiya has been awarded to the Metallurgical Corporation of China Ltd, at a contract price of Rs. 66.7 billion rupees but this was revised to Rs. 41.7 billion. China's EXIM Bank is funding this third phase of the project.
Construction of the second phase of the 4- lane expressway from Kaduwela to Kadawatha, a 14.3 km stretch, which began in 2012, is now nearing completion.
The discussion also covered plans to commence work on the Southern Expressway Extension.
The Minister explained that serious consideration had been given towards proceeding with the project as justification of its cost was important.
The Minister explained that although the evaluation of the proj- ect on a stand- alone basis may question the feasibility, the benefits that could potentially accrue when looked at as an integrated investment with investments already made on the Hambantota Port and a proposed Economic Zone would justify the feasibility to proceed with the Southern Expressway Extension.
According to the media release, the Minister said road construction work in the country hasn't halted and explained that some work had been temporarily paused to re- evaluate and negotiate in the wider interest of the country.
All road work has recommenced and is being carried out in a far more planned and systematic manner that has reduced wastage and corruption, media release said.