The Hon. Bimal Rathnayake - Minister of Transport, Highways, Ports and Civil Aviation and Leader of the House of Parliament

¶ 01 Hon. Speaker, I move:

¶ 02 “That a sum not exceeding Rupees Thirty Six Billion Six Hundred and Nine Million (Rs. 36,609,000,000) be paid out of the Consolidated Fund of the Democratic Socialist Republic of Sri Lanka or any other fund or moneys of the Government or any moneys received by the Government as loans, for the service of the financial year commencing on January 01, 2025 and ending on December 31, 2025, and that the said sum be expended as set out in the Schedule hereto:

¶ 03 Schedule Head 117 — Minister of Transport, Highways, Ports and Civil Aviation Programme 02 — Capital Expenditure of the Road Development Programme Rs. 36,609,000,000 Total Rs. 36,609,000,000 (Cabinet approval obtained.)”

¶ 04 Hon. Speaker, I will submit the primary purpose of this Supplementary Estimate in writing for clarity and to save time.

¶ 05 For 2025, our Ministry’s expenditures were planned at the start of the year. But as you know, though the President took office in 2024, the Budget was passed only in March 2025, so earlier programmes had to be integrated. Despite planning to utilize all allocations, issues arose: unresolved matters with lenders, foreign financiers withholding disbursements, contractor disputes, and some projects delivering bills below estimates. Thus, under Head 117, for the Highways sector, estimated unutilized provisions are Rs. 33,272.20 million (foreign financing) and Rs. 840 million (domestic), totaling about Rs. 34,112 million. Under Head 306 (Sri Lanka Railways), domestic financing savings of Rs. 2,496.80 million are forecast. Together, expected savings are Rs. 36,609 million. We seek to transfer these under Financing Code 11.

¶ 06 Put simply, funds allocated cannot be fully spent due to several reasons I will table for Members. The 2021–2022 crisis caused many lenders to suspend loans, halting many projects: Gatambe and Kohuwala flyovers (Hungarian financing), Indian line upgrades, and large Chinese-financed works like the Central Expressway. At Bandaranaike International Airport’s second terminal, delays amid allegations have led to an estimated Rs. 55 billion in additional delay costs.

¶ 07 When foreign loans pause, domestic counterpart funds cannot be effectively used; projects near completion still stall awaiting the foreign tranche. Some domestically conceived projects also suffered from poor planning and lack of comprehensive studies—like the “100,000 km roads” political programme.

¶ 08 Therefore, in May, under Financial Regulation 66 and in consultation with the President and Treasury, we resolved to reallocate likely unspent domestic funds to productive uses—e.g., increasing rural roads from Rs. 14 billion to Rs. 26 billion, and allocating Rs. 3,500 million to revive 25 key SLTB depots. For foreign-loan projects, to repurpose counterpart/sinking funds we require Parliament’s approval. Today we seek approval to redirect about Rs. 36 billion for productive purposes, chiefly to service high-cost domestic bank loans of the Road Development Authority (RDA).

¶ 09 Media carried incorrect reports; I table RDA’s clarifications. Since 2013, RDA borrowed heavily from local banks for roads—total about Rs. 414 billion; about Rs. 310 billion remains. Bullet payments make the burden acute. The loan book includes major exposures with state and private banks; around Rs. 119 billion of the remaining Rs. 310 billion are bullet maturities. Rates are generally AWPLR plus a margin (roughly 2%–2.8%). We propose using these savings to reduce this debt burden now; banks have agreed to waive extra charges on such early repayments.

¶ 10 On the Central Expressway: though works started earlier, the loan agreement (Exim Bank of China, about USD 900 million equivalent) was signed in 2019, with a 60:40 LKR:USD split then proposed. In 2022 the lender suspended disbursements due to the crisis. Since taking office, we negotiated intensively. China is no longer extending USD loans for this; we converted to a CNY facility with a floating rate policy. We negotiated to AWPLR minus 0.8%, with an effective band about 2.5%–3.5% on the CNY side under their framework—an improvement over initial terms. We have resumed activity accordingly.

¶ 11 As of 30 September, domestic financing utilization stands at 56.76% and we expect to exceed 90% with the Central Expressway restart. Foreign financing utilization is about 21.75% and will also improve as that project advances. Overall financial progress is around 50% so far.

¶ 12 A few quick public-interest points: - Driving licences: we explained the in-house printing shift and savings. - Recruitment of female bus drivers and conductors is underway; private operators are following suit. - Today we open the office of Lanka Metro Transit (Pvt.) Ltd., funded with Rs. 3,000 million by the Minister of Finance, to establish a low-floor bus service in the metropolitan area. Buses will take time; we invite private sector participation. - We will introduce card payments on buses. By 30 November, any bus with a standard ticket machine should accept domestic bank cards. Cash will remain for those without cards. - We are issuing guidelines for school vans and office vans through the NTC to enhance road safety. - At Bastian Mawatha and Makumbura, we will pilot basic mechanical checks for long-distance buses prior to dispatch.

¶ 13 Public transport remains weak; we ask everyone’s support to improve it. Please approve this Supplementary Estimate.

¶ 14 Question proposed.