Local banks fund road development

by Ranil WIJAYAPALA

Three local banks - People's Bank, Bank of Ceylon and Commercial Bank - have committed Rs. 26.5 billion so far for the road development sector of the country under the initiative taken by President Mahinda Rajapaksa to get local bank funding to expedite the road development process, Ports and Highways Ministry Secretary Ranjith Pemasiri told the Sunday Observer .

He said the Ports and Highways Ministry has signed seven agreements with the three banks.

The Secretary said many road development projects in many parts of the country are expected to commence under local bank funding in the future.

"We are now implementing improvement and rehabilitation projects for the Anuradhapura-Trincomalee road, Ibbagamuwa-Kumbukgete-Madagalla road, Katuwana-Alupothdeniya road, Galigamuwa-Ruwanwella road, Polonnaruwa-Somawathiya road and Habarana-Dambulla road under local bank funding," he said.

He said People's Bank has signed agreements to provide Rs. 15 billion, Bank of Ceylon to provide Rs. 10 billion and Commercial Bank to provide Rs. 1.5 billion for these projects.

Local bank funding for the road development sector has been initiated for the first time in Sri Lanka under a 2011 proposal in which President Rajapaksa proposed an investment fund account in each bank.

"The Investment fund account is based on the revenue earned and the taxes to be paid to the Inland Revenue Department. ''The loans will be given for a 14-and-half-year repayment period", he said.