RDA releases Rs. 4 billion to Treasury to settle unpaid bills
The Road Development Authority has released Rs 4 billion from expressway earnings to the Treasury to settle a portion of unpaid bills of Rs 6.6 billion in the road sector.
One billion rupees is expected to go towards unpaid bills for road maintenance; Rs 1 billion to settle dues for rehabilitation and improvement of national highways funded by local banks; and Rs 2 billion for widening and road maintenance bills.
“This is not enough to settle the due amounts,” RDA Director General Rohitha Swarna said, adding that the Treasury had promised to reimburse the funds to the Authority at a future date. The Rs 4 billion that the RDA advanced was maintained in a fund used for expressway maintenance and management.
It is not clear how the backlog of unpaid bills had reached Rs 6.6 billion. There are Rs 3 billion in payments due for widening and improvements of national highways (Rs 600 million of this work was carried out last year); Rs 1.6 billion due for road maintenance; and Rs 2 billion for rehabilitation and improvement of national highways funded by local banks.
Official documents show that annual budget allocations for the road sector are high. However, the amount of money actually advanced fall below the promised amounts.
Meanwhile, the Government is going ahead with plans to attract investors for a public private partnership (PPP) for the expressways from Kottawa to Godagama, from Kottawa to Kerawalapitiya and from Colombo to Katunayake. However, after strong protest from RDA unions, a fresh committee was appointed by the Cabinet Committee on Economic Management (CCEM) to submit a report on “the most appropriate model and guidelines after taking the financial proposition into consideration”.
The report is to be submitted at the next CCEM meeting by the committee whose members are the
Secretaries to the Ministries of Highways and of National Policies and Economic Affairs, a representative from the PPP unit of the Treasury and the RDA Chairman.
RDA officials have already been instructed to submit details to the group about the income generated from these expressways since inception; the maintenance cost and other relevant expenditure; the maintenance plan for the next ten years; and the adequacy of revenue to meet the cited costs.
The Government hopes to attract a private investor to manage the expressways in collaboration with the RDA. Earlier, Highway s M i n i s t e r Lakshman Kiriella divulged that a Chinese party has already been identified. However, this would have contravened recommendations to call for open, transparent international bidding with the objective of attracting the best deal.
The proposal for a PPP for the expressways emerged earlier this year in keeping with the Government’s policies of greater private sector involvement. A Cabinet memorandum from Prime Minister Ranil Wi ckremesinghe in March this year said that, while, historically, investments in infrastructure had been a task of the Government, this landscape had changed during the last few decades.
“Other deve l o p i n g countries which are ahead of us in the development process have adopted successful alternative modalities for the rapid development of critical infrastructure, which have accelerated industrial development and attracted foreign direct investments ( FDI) to stabilise fiscal and external balances,” the memorandum read.
The Prime Minister said Sri Lanka’s development in infrastructure is lagging behind competitors in the region “since the Government has historically relied on public funding for critical infrastructure projects”.
“This has added enormous pressure on the Government fiscal operations and stalled the development process of the country,” he asserts. “Under this backdrop, it is vitally important for us to look into successful PPP modalities tested elsewhere for future expansion of our infrastructure development process.”
The RDA unions have opposed moves to, what they call, privatise the expressways. They say the authority earns good income from the expressways and is capable of managing them. They also warn about efforts by China to take over the road network, in addition to its already heavy presence in the country.