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More Chinese Loans For Planes And North

Aug 27, 2010 9:13:11 AM - thesundayleader.lk
Zest Airways MA60 at Marinduque Airport, Philippines

Zest Airways MA60 at Marinduque Airport, Philippines

The Cabinet today (27) approved a set of proposals to borrow over US $375 Million from the EXIM Bank of China for projects including planes, northern road development and northern power sector development. These requests were tabled directly by President Mahinda Rajapaksa.

Planes ($41.1 million) – The cabinet has approved the purchase of two MA-60 aircraft from China. These small aircraft were estimated to cost $12.5 million each in 2006 with a large additional amount for spares. The MA-60 is a turboprop (propeller) aircraft with seating for 40-60. It is intended for domestic and regional flights.

A9 Road Rehabilitation ($141.6 million) – The cabinet has approved the rehabilitation of the Kandy to Jaffna Road, long neglected due to war.

Jaffna Roads ($75.4 million) – The cabinet also approved monies to improve the AB32 and AB18 roads leading out of Jaffna, to Point Pedro and Palali, respectively.

Mullativu Road Rehabilitation ($85.2 million) - Two roads to Mullativu, the last stronghold of the LTTE, have also been slated for redevelopment.

Northern Power Sector ($31.6 million) – Credit has also been obtained for materials for the Northern Province Power Sector Development Programme.

China is currently a large lender to Sri Lanka, financing the Hambantota Port and various infrastructure projects throughout the country. These funds, however, are all loans and must eventually be repaid by Sri Lanka.

The relevant sections of the Cabinet decision are reproduced below.

10. On the recommendation of President Mahinda Rajapaksa as the Minister of Finance & Planning, a concessionary loan has been provided by the Government of China for the supply of two MA – 60 Aircraft to Sri Lanka. The Government of China will provide RMB Yuan 280,000,000 [US $41,188,000] for the purpose through the Export – Import (EXIM) Bank of China

The Aircraft will be used for passenger transportation between domestic and regional destinations.

11. On the recommendation of President Mahinda Rajapaksa as the Minister of Finance & Planning, the Government of China has agreed to extend a Buyer’s Credit Facility through the Export Import (EXIM) Bank of China amounting to US $141,604,966 to finance the rehabilitation and improvement of 153 Km length Kandy to Jaffna road (A9) Total cost of the project is US $ 166,594,076.66

And also the Government of China has agreed to extend a Buyer’s Credit Facility through the Export Import (EXIM) Bank of China amounting to US $ 75,420,000 to finance the rehabilitation and improvement of 84 Km length Jaffna- Point Pedro Road (AB32) and Jaffna – Palali Road (AB18).

In another project also with Credit Facility of (EXIM) Bank to the tune of US $ 85,287,000 will be obtained for rehabilitation and improvement of 42.4 Km length of Mullative – Kokilai – Pulmudai Road (B297), 52.6 Km length of Oddusuddan – Nedunkerny Road (B334) and Mullative – Puliyankulam Road (B296).

12. On the recommendation of President Mahinda Rajapaksa as the Minister of Finance & Planning, the Government of China has agreed to extend a Buyer’s Credit Facility through the Export Import (EXIM) Bank of China amounting to US $ 31,659,391.82 for the procurement of material for the Northern Province Power Sector Development Programme.