Kandy Expressway – A series of political blunders

Thursday, 24 August 2017 00:22 -     - {{hitsCtrl.values.hits}}

 The Kandy Expressway, also known as the Northern Expressway and the Central Expressway (name keeps on changing), was first proposed in the early 1990s, taking a route over the Kelani River’s northern flood plain and was challenged over environmental issues; accused of building a dam disturbing rain water flow, thereby creating floods. RDA was unable to meet the accusations and the proposal had to be abandoned.

In the next attempt, a feasibility study was awarded to a Swedish consultancy firm and completed in December 2001. According to the proposal, the expressway will commence from the Kadawatha interchange of Outer Circular Highway terminating at Katugastota. The selected corridor lies close to Ganemulla, Gampaha, Balabowa, Banduragoda, Mirigama and Ambepussa (Phase 1 – 48.2km) and Devalegama, Rambukkana, Hatharaliyadda, Hedeniya, Katugastota (Phase 2 – 50.7km). Also, a 12-km ring road around Kandy city from Katugastota to Gannoruwa. 

Offer to investors

The proposed highway was offered to international investors in May 2011, to be built as a privately financed toll road on BOT (build, own & transfer) basis. The investor was expected to design the road over the pre-selected corridor, acquire land, pay compensation and construct related facilities. The design and construction would be under the supervision was awarded to Australian consultant SMEC Engineering in December 2012.

RDA’s estimate 

The Northern Expressway was expected to be constructed in two phases: Phase 1 – 48.2 km section from Kadawatha to Ambepussa estimated at Rs. 70 b; Phase 2 – 50.7 km section between Ambepussa and Katugastota was priced at Rs. 90 b.

llAward of contract

In July 2012, Cabinet approved the award the construction of 100km Kandy Expressway under Build Own Transfer (BOT) system to two Chinese companies, China Merchant Holdings and China Merchant Huajin Investment Company and a MOU was signed. The website of China Merchant Huajin Investment Company noted under ‘China company lands 1 b USD highway project in Sri Lanka’.

The first 45 km of the Expressway traverse a flat terrain, the next 15 km a rolling terrain and the balance 38 km hilly terrain and the route had been approved by the CEA in 2008. A significant feature of the second section of expressway is the inclusion of 10 tunnels, two of length of around 400 m and eight of length of around 30-225 m. The Chinese agreed to construct the Kadawatha-Ambepussa section for a 35-year BOT period and construction was expected to begin in August 2012. The Chinese indicated that the second sector, Ambepussa-Kandy, would require a longer period. 

Shifting to Enderamulla

In the original trace prepared by the Consultant the first 0-10 km was on firm ground. But in July 2012 when villagers near Gampaha protested against their loss of property, Minister Felix Perera agreed to relocate the route. The road commencement was shifted from Kadawatha to Enderamulla and join the original route at Mirigama, increasing the distance by five kms. The amended route from Enderamulla continued via Ragama, Gampaha, Veyangoda to Mirigama with a sharp right turn to Ambepussa. The principle of avoiding built-up areas was adopted for the entire alignment. The new route not only included villagers’ concerns, but also accommodated wishes of politicians.

Enderamulla is surrounded by marshes and the amended route ran parallel to the railway line, traversing over paddy, marshy and uncultivated lands. Marshes on the diverted route necessitated nine km of viaducts (overhead road). Viaducts cost over six times the cost of a firm-ground road and the increased costs altered the financial viability of the project, and the Chinese investor was no longer interested.

Changes to Kandy route

In March 2013, Mahinda Rajapaksa during a visit to Kandy reviewing progress noted problems in land acquisitions in Kegalle, Rambukkana had delayed implementation of the project. Rajapaksa directed the expressway be built through Kurunegala and Galagedara. This diversion pushed the highway nearly 20km northwards and increased the highway length and the costs. Rajapaksa had a soft corner for Kurunegala, as noted by the decision to contest from Kurunegala District, abandoning Hambantota, after losing the presidency.

Inauguration of Northern Expressway

With the route change, the contract was awarded to Australian consultant SMEC to select a suitable road corridor to link the highway with the Northern Province, with a link to Kandy. The highway to allow speeds up to 100 kmph.

nStage 1 – Enderamulla to Meerigama – 37.1km 

nStage 2 – Meerigama to Kurunegala – 39.7km and Ambepussa link (9.3km) 

nStage 3 – Pothuhera to Galagedara (Kandy) – 32.5km 

nStage 4 – Kurunegala to Dambulla – 60.3km 

The revised Northern Expressway intended to connect Enderamulla with Pothuhera and continue to Katugastota and Gannoruwa. In addition, highway commencing from Pothuhera will pass through Kurunegala, Galewela and Dambulla. The road will have interchanges at Gampaha, Veyangoda, Mirigama, Nakalgamuwa, Pothuhera, Dambokka, Kurunegala, Rideegama and Melsiripura. Under revised Expressway, distance wise Enderamulla to Kandy became 120km, whereas in the earlier proposal Kadawatha-Kandy was only 98.9km.

RDA engineers allege the consultancy award to SMEC without calling other quotations and the price of Rs. 1 billion was excessive. They also claim the route was deliberately moved over paddy fields/marshlands, necessitating a large number of overpasses and excessive earth-fills.

In November 2014, prior to Presidential elections, Mahinda Rajapaksa re-launched the construction by laying a foundation stone at the Senkadagala entrance and also awarded the Stage I of the contract to Metallurgical Group Corporation of China (MCC).

Changes to Outer Circular Road

The last section is OCH Phase III from Kadawatha to Kerawalapitiya (9.63 km) had been awarded to MCC in January 2013 for Rs. 66.69 billion with a loan wfrom Chinese Exim Bank. The OCH 3 is a four-lane highway with provision to expand to six lanes to accommodate traffic leading to Kandy Expressway commencing from Enderamulla. 

Earlier, the 54km stretch Kadawatha to Ambepussa was priced by the RDA at Rs. 70 billion. But shifting the commencement from Kadawatha to Enderamulla moved the highway into flood plains and embankments had to be made larger, so the RDA Engineers revised the Enderamulla to Mirigama estimate to Rs. 100 billion. But the price of contractor, MCC, was Rs. 29 billion higher.

Expressway under Yahapalanaya Government

The new Government appointed a committee of three ministers to determine the future of the Kandy Expressway. The Committee recommended in March 2015 to bring back the commencement of the Expressway from Enderamulla to Kadawatha, also renaming it as the Central Expressway. The biggest change was the possibility of reducing costs of OCH 3 by approximately Rs. 24 billion (or 30%) by removing the provision to widen the road to six lanes and the redundancy of the Enderamulla interchange. The Committee recommended that with the savings from OCR 3, Kadawatha to Kossinna (five km) sector could be built. The highway beyond Mirigama would be left unchanged from previous Government proposals.

Untitled-1Sector 1 – Kadawatha-Mirigama sector

The construction of the Central Expressway was inaugurated again by Prime Minister Ranil Wickremesinghe on 3 August 2015, by unveiling a plaque at Kossinna, north of Kadawatha. Public were informed that the construction of the first section of the expressway has been offered to China Metallurgical Corporation, funded by a loan from China's Exim Bank. The negotiated cost of the 32.5km-long Kossinna to Mirigama sector stands at Rs. 145.8 billion or Rs. 4.5 billion per km.

The new Government was unenlightened to retain a 120km long highway compared to the former 98.9 km. When the Kadawatha-Mirigama sector cost Rs. 4.5 billion per km, the most difficult and expensive sector would drag costs to Rs. 6 b/km, resulting in an additional cost of staggering Rs. 120 billion for the 20 km. 

The Government expected savings from OCH 3, also built by MCC could cover the cost of the first five km from Kadawatha to Kossinna and awarded the Kadawatha to Mirigama 37.1 km to MCC without tender. Funding for the project was expected from China’s Exim Bank.

The contract was divided into two sectors: Kadawatha-Kossinna and Kossinna-Mirigama. Kadawatha to Kossinna was to be completed from savings from OCH 3, as indicated by the official committee. However the savings from OCH 3 found to be evasive, as the local engineers were found to be completely inexperienced in negotiations with a shrewd international contractor. The contractor later increased the cost of entire road to Rs. 158 billion, or Rs. 12 billion more than original.

Section II

The road section from Mirigama to Kurunegala and branch to Ambepussa spanning 39.29 km, as Section II, was sub-divided into four packages and groups of local contractors involved in road construction were requested to submit bids. But the irony was each group bid for a single package avoiding competitive bidding. Naturally, bids received were 18% to 20% higher than the Engineer’s estimate, but were negotiated lower. The Engineer’s estimate was Rs. 126.8 billion, but the finally-agreed negotiated price was Rs. 136.8 billion. In November 2016 on the recommendation of Minister of Highways, the Cabinet of Ministers approved the award. The cost per km reached Rs. 3.49 per km.

Calling quotations without competitive bidding is not generally done and would lead to higher prices. Also contractors would have been aware of the Engineer’s Estimate. In addition, during the construction there could be variations to the contract, leading to higher final costs.

Section III

With the mountainous terrain, the 32.5 km Section III from Pothuhera to Kadugannawa is the most difficult and expensive road section. The section includes four interchanges at Pothuhera, Polgahawela, Rambukkana and Galagedera, with three tunnels, 290m, 200m and 235m; and in addition 12 main bridges and 17 viaducts across the floodplains of three rivers; Rambukkan Oya, Kuda Oya and Kospothu Oya. 

The Cabinet agreed to award the third section of the highway to Japanese contractors with funding from a Japanese bank. The Japanese Ambassador was requested to nominate possible contractors and nominated Taisei Corporation, Penta Ocean Construction Co. Ltd., and Wakachiku Construction Co Ltd. The loan terms of Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) are said to be expensive and the Sri Lankan Government has requested more favourable terms. 

When tenders were called for the first round only Taisei Corporation submitted a bid. But Taisei’s bid was rejected due to non-submission of bid bond. In the second round two responded; Fujita Corporation offered the lowest bid at Rs. 147 billion and Taisei at Rs. 159 billion to build the road. But Fujita’s lower bid was rejected by the tender evaluation committee, claiming the company had not carried out a road construction of such magnitude in the recent past. The third party Penta Ocean Construction specialises in marine works and land reclamation, not road building. 

The entire process lacked transparency; why was the project not offered to all Japanese contractors? In calling quotations only from three contractors, supposed to have been recommended by the Japanese Ambassador, why was their road building experience not checked, rather than at evaluation of bids? It’s apparent that Taisei was favoured from the beginning.

Regarding the experience of rejected Fujita, the company’s website indicates a large number of varied construction works carried out by the company. Latest news reports indicate the two contractors Taisei and Fujita have agreed to form a consortium to carry out the project and the price would be around Rs. 150 billion.


The Kandy Road is the most travelled road in Sri Lanka and should have taken the shortest route. Original study of the highway was in 2001, but the design presented to investors in 2012, as Kadawatha-Ambepussa was 48.2 km, passing through Gampaha, Veyangoda, Mirigama to Ambepussa, whereas the same on the AI highway amounts to only 43 km. 

A traveller from Kadawatha during a non-rush hour would realise the twists and turns taken by the A1 road. Thus a properly designed highway from Kadawatha to Ambepussa should not exceed 40km. The excessive length was due to deliberate route modification to connect Ragama, Gampaha, Veyangoda and Mirigama. It is most likely that the route was modified on instructions of Basil Rajapaksa. When questioned by a journalist, the Minister claimed the road would collect travellers from cities. Should an expressway take a school-van route? In addition Mahinda Rajapaksa routed the highway close to Kurunegala, adding another 20 kms and taking the road over marshes and rivers. 

If Kadawatha to Ambepussa was reduced to 40km with 50.7 km Ambepussa-Katugastota, the highway distance would come down to 90.7 km, whereas the current road amounts to 120km. The current highway being 30km longer, every motorist would spend minimum two litres of petrol each way.

When expression of interest was called in July 2012, China Merchant Holdings and China Merchant Huajin Investment Company agreed to construct the road on BOT basis for 35 years, even with the longer route. They indicated to construct the second phase for 50 years. This would have allowed the highway without local capital or running costs to the country. Chinese indicated the two sectors would cost slightly over $ 2 billion or Rs. 300 billion.

Current costs are:

  • Kadawatha to Meerigama – Rs. 158 billion
  • Mirigama to Pothuhera and Ambepussa link – Rs. 137 billion
  • Pothuhera to Galagedara (Kandy) (32.5km) – Rs. 150 billion
  • Total – Rs. 445 billion

Initial route change was to accommodate protests by locals. Our people protest at every turn of the Government. Politicians should have explained to the public the national importance of the project and the need for the shortest route. For persons who lose their housing or land, proper compensation/alternate housing needs to be settled promptly. It is known that compensation payments by RDA are well above the market rates, including resettlement costs. If the situation was handled properly, the highway would be in operation by now.


The new Government too failed to investigate the massive project in detail and blindly accepted modifications made by the Rajapaksa Government. They failed to obtain opinions of educated persons in road construction and contract management prior to taking decisions. Politicians were only interested in filling their pockets and contracts for all three sectors was awarded on negotiated basis.

If the Chinese offer in 2012 was accepted, the people would be enjoying the highway by now, without loans or interest payments. The present highway will cost an additional Rs. 150 billion and interest on loans would be payable. Extending the highway by 30 km means every vehicle will consume additional two litres of petrol on every trip to Kandy one-way forever. The proposed overpriced Kandy Expressway is the consequence of a series of political blunders and public 

will be expected to endure.

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