Rail Link

Nov 18, 2011 (LBO) - Sri Lanka has signed a deal with India to restore part of a northern railway line that was damaged during the ethnic war under project funded by soft loans from New Delhi.
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The agreement between Sri Lanka Railways and the Indian government owned IRCON was for the restoration of the 56-kilometre Pallai - Kankesanthurai railway line in the northern Jaffna peninsula which bore the brunt of the 30-year war which ended in 2009.

The total cost of the project, to be completed in two years, is 149.

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30 million US dollars, an Indian high commission statement said.

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It would be funded as a part of a loan of 800 million US dollars given by India at an interest rate of LIBOR plus 0.

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5 percent and a repayment period of 20 years with a five-year moratorium.

Another loan of 167.4 million dollars from the government of India is funding a project to repair and upgrade the island's southern coastal railway line.

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Transport minister Kumara Welgama said the restoration of the northern railway line would enable Sri Lanka Railways to restart the services of 'Yala Devi Express' enhancing connectivity with the north and boosting economic opportunities.

Indian High Commissioner

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