Cabinet approves raising Rs. 367 b for overdue payments

• Green light to obtain funds to repay Rs. 155 b to local contractors, Rs. 212 b to foreign projects 
• Supplementary estimate presented to P’ment by PM gets Cabinet nod
• Despite strained public finances, infrastructure projects to continue 
• 100,000 kilometres of road upgrades, Rs.600 m new access road to BIA get nod

By Uditha Jayasinghe    

Cabinet approval has been given to meet Rs. 367 billion worth of payments to both local contractors and foreign-funded projects, Cabinet spokesman Bandula Gunawardana said yesterday, but assured this would not detract from kicking off more infrastructure projects this year.

Speaking to reporters at the weekly Cabinet briefing, Gunawardana faulted the former Government for failing to meet payments to contractors, pointing out that Rs. 155 billion was owned to local companies while another Rs. 212 billion was needed to meet payments of foreign projects. 

“With the Cabinet approval and the supplementary estimate before Parliament, the Government will soon ensure these payments are met. However, this does not mean that infrastructure development projects will stop. Cabinet this week approved plans to repair 100,000 kilometres of roads and build a new access road for the Bandaranaike International Airport (BIA),” he said. 

According to Gunawardana, the roads under the 100,000 km program will be selected based on their proximity to trunk roads and highway access. 

“We will introduce a point system, and for the road to be selected it has to score 50 points or more. Points will be allocated based on how many houses are along the road, whether it provides access to a hospital or school, whether it has been repaired at any point in the past ten years. Only crucial roads will be selected, and the upgrades will be funded by foreign organisations such as the Asian Development Bank, the Saudi Fund, and others, so there will be little immediate impact on public finances,” he said. 

Co-Cabinet spokesman Romesh Pathirana said that a new access road will be built for BIA to ease traffic congestion that has been observed at peak hours. The road is estimated to cost Rs. 600 m and will be funded by monies raised by the Civil Aviation Authority, the spokesman said. 

Prime Minister Mahinda Rajapaksa on Wednesday told Parliament the country’s economy is in dire straits, seeking Parliamentary approval to increase the debt ceiling from Rs. 721 billion to Rs. 1.078 billion, and for a supplementary allocation of Rs. 156 billion. 

Of the Rs. 156 billion allocation, Rs. 101 billion will go towards recurrent expenditure, and Rs. 55 billion for capital expenditure, the PM explained, saying the monies were urgently needed to settle outstanding payments due from expenses incurred by the last Government.  He also said there was a Rs. 600 billion revenue shortfall in terms of tax projections targeted by the previous Government.