Chairman of the Committee on Public Finance (CoPF), Dr. Harsha de Silva, has expressed concern over a proposal to alter the interest rate structure of the Central Expressway project’s financing, warning that it could increase the country’s borrowing costs.
Taking to X, Dr. de Silva said the LKR 226 billion project—already delayed and burdened by growing interest payments—was reviewed due to ongoing financial and contractual uncertainties.
He noted that despite the project being relaunched with much fanfare under President Anura Kumara Dissanayake, negotiations with the main contractor, MCC, on their claims, and with China EXIM Bank on the revised USD 500 million loan facility, remain incomplete.
Dr. de Silva said the committee was puzzled by the Ministry of Highway’s proposal to shift from the existing 15-year fixed interest rate of 2.5% to a variable rate, with 2.5% as the floor and 3.5% as the cap.
He added that the CoPF urged the ministry to ensure a fair and balanced agreement that provides equal advantages to both parties in the event of future changes in long-term Chinese lending rates.