India signed a $67.4 million Line of Credit agreement with Sri Lanka which will fund second phase of upgradation of a railway line which will go from Colombo to Matara in Sri Lanka.
The Indian mission to Sri Lanka issued a statement that declared that Secretary of Ministry of Finance and Planning, P. B. Jayasundera and Executive Director of Export-Import Bank of India, Prabhakar Dalal, in the presence of High Commissioner of India in Colombo Ashok K. Kantha, signed the agreement.
This agreement is second one after an earlier agreement in which The Government of India gave $100 million Line of Credit via Export-Import Bank of India. The first phase of Southern Railway Line’s upgradation is undergoing implementation right now. This project involves the supply of raw material to rebuild the railway track between Matara and Colombo and rehabilitation of rail track between Kalutara and Matara. This rehabilitation process has been undertaken by IRCON (I) Ltd.
Besides these, the money from the agreement will also be used to provide diesel multiple units and locomotive. In addition, the Line of Credit is being used for supply of 20 sets of diesel multiple units (DMUs) and equipment and plant to maintain these DMUs, spare parts for M8 class locomotives and building of maintenance shed in Aluthgama by RITES India Ltd. After this upgradation the trains will be able to run at a speed of 100 km per hour between Colombo and Matara.
This would increase the operating speed to 80 km per hour from the present average of 40 km per hour and will ensure that an express train will cover the distance between Colombo and Galle in just two hours. The capacity and frequency of the trains will also be increased by the locomotives and DMUs supplied under this agreement.
On another front, China has also completed a concessional funding arrangement with Sri Lanka through Exim Bank which is China’s funding arm. This funding will be used to build a new airport in Mattala which will cost around $190 million. China as also pledged concessional finances of $100 million for upgradation of Sri Lankan railway capacity.
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