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Sri Lanka railways get US278mn China loan
05 Mar, 2013 13:14:08
Mar 05, 2013 (LBO) - Sri Lanka will get US$278 million dollars in loans from China to build 26.75 kilometres of rail track from Matara to Beliatta in the South of the island, the finance ministry said.
The Exim Bank of China will provide 200 million US dollars under an agreement signed on February 18 as a preferential buyers' credit at 2.0 percent interest with a 20-year repayment and 5-year grace period.

The balance 78.2 million US dollars will be provided by the Chinese government, the finance ministry said without elaborating. Previous Chinese government loans have been denominated in Yuan.

The construction of the railroad involves building, bridges, culverts, viaducts, level crossings, road diversions, earth embankments and four railway stations.

The rail track is the first phase of an extension running to Karataragama from Matara, via Hambantota. A new sea port and airport has been built in Hambantota with Chinese finance.

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1. Niro Mar 05
It’s high time to take a breather from indiscriminate borrowing to develop infrastructure.

Since some of the early projects with Chinese loans are already complete, it’s high time to do a reality check as to if these infrastructure investments are delivering the anticipated dividends (both financial and social) and viable (self sustaining without the need for further loans) in the long run without becoming a burden on the economy and its people.

Otherwise, we'll get caught in an inescapable debt trap which will eventually lead to default within a decade with disastrous consequences.

In my opinion, most of the mega infrastructure developments are ‘illusionary’ wizardry , simply to portray a picture of rapid development to satisfy the gullible masses to stay in power and win elections.