Sri Lanka on track to improve the road network
[January 17, 2005]

The World Bank
Information Note

Colombo, 16 January 2006: Sri Lanka’s poorly maintained road network has hindered the movement of goods with resulting poor service levels restricting the spread of economic activities and development. The Road Sector Assistance Project aims to significantly improve and maintain highways and over 600 kilo metres of national and rural roads in a 2006-2012 year program. The World Bank is partnering with Sri Lanka providing US$100 million credit -- the largest ever given to Sri Lanka. The Government of Sri Lanka is financing 30 percent of the project cost with a US$ 44 million injection to the project and will establish for the first time a vital Road Maintenance Trust Fund.

The Roads selected for improvements are spread across Southern, Central, Sabaragamuwa, North Central, Uva, Eastern and North Western Provinces. The roads on which work is scheduled to commence immediately and termed phase I will consist of Ingiriya – Rathnapura (A8), Nittabuwa –Kandy (A1), Galle-Akuressa-Deniyaya (A17), Denagama-Mulatiyana (B098) and Hakmana-Thalahanduwa(B142).

Targeted to commence in phase II [2006/2007] of the project is the rehabilitation of the Bandarawela-Haliela(A16),Bandarawela-Welimada(B44),Galkulama-Punewa(A9),Medawachchiya-NCP boundary(A14), Maradankadawala-Habarana-Minneriya-Welikanda-Trikkandimadu(A11), Padeniya-Puttalama (A10). In addition, Wellawaya-Siyambalanduwa(A4),Siyambalanduwa-Ampara (A25) and Karativu-Ampara (A31) have been given priority due to being roads affected by tsunami.

The Road Maintenance Trust Fund set up under the Trust Ordinance will be an interim mechanism to ensure financial allocations are made for the maintenance of National and Provincial Roads. The Government has undertaken to increase the annual maintenance expenditure from a projected US$13 Million in 2005 to US$ 30 Million in 2006 and US$46 Million in 2010, to upgrade and maintain the core road network. The Ministry of Finance will be responsible for the implementation of all activities related to the setting up and the financing of the Fund. A Board of Trustees at the Central Bank will manage the Trust Fund. A technical Advisory Committee consisting of industry stakeholders will be appointed to evaluate and approve competing 3 year proposals put forward by the road maintenance agencies. Transparency of the approvals is to be made public through annual reports of the account to Parliament.

The Ministry of Highways will oversee the execution of the road sector assistance project through a project management unit established within the Road Development Authority. Provincial Directors in the respective provinces would provide the necessary coordination in the field.  The improvement work would be carried out by local and foreign contractors where supervision of all the civil works would be carried out by a Supervision Consultant. All civil contracts and consultancies are to be invited and selected through a competitive tender procedure by the Government.

The improvements of the total of 620 km of National roads are packaged in to 13 contracts, where 7 contracts are offered under International Competitive bidding procedures and 6 contracts are offered under national competitive bidding procedures. Local contractors bidding under International Competitive Bidding Procedures would receive a preference as a domestic contractor. In the packaging of such contracts, consideration has been given to the need to expand the local construction industry as well as offering work commensurate with their capabilities in order to ensure delivery of timely and high quality work. Each contract would span a period of 18-30 months. The civil contracts in phase 1 have already been tendered and award of some have been approved by the Cabinet of Ministers. These contracts would be awarded shortly.

The progress of the project will be monitored by the Ministry of Highways as well as the World Bank. Supervision by the World Bank would focus on physical progress, financial management, procurement and management of environmental and social aspects of the project. The project is expected to be completed by 2012.

The credit for the Road sector assistance project from the International Development Association (IDA) would provide US$ 100 Mn (SDR 69.1 Million)   The credit has a grace period of 10 years with a maturity period of 40 years and carries a service charge of 0.75% with no interest being charged. The project is expected to be made effective and ready to disburse within the first quarter of 2006, based on the progress made on the implementation. A special feature of this project is that it has been designed to disburse at a higher percentage from the IDA component in the earlier years providing much needed support to  the Government  in the initial stage.

The Road Sector Assistance Project is closely coordinated with the Asian Development Bank and the Japan Bank for International Cooperation and signifies the World Bank’s re engagement in the transport sector after an absence of more than a decade.

Contacts:

Amali Rajapaksa, Infrastructure Specialist, South Asia Region. Email: arajapaksa@worldbank.org
Chulie de Silva, External Affairs Officer. Email:cdesilva@worldbank.org