Korea to provide US$ 200 million for Kandy tunnel
The Korean Strategy and Finance Ministry approved US$ 200 million for the Kandy tunnel construction project comprising four tunnels with a total length of 5.5km.
The tunnel is to run from Suduhumpola to Tennekumbura via Bogambara and Ampitiya which will be the longest tunnel in Sri Lanka.
Korea Eximbank will finance this project with a concessional EDCF loan of 0.15 percent interest rate and 40-year repayment period including a 10 year grace period.
The project executing agency will be the Highways and Higher Education Ministry of Sri Lanka whereas the project implementing unit will be the Road Development Authority (RDA).
The objective of the project is to ease the traffic congestion in the Kandy centre by constructing by-pass tunnels for vehicles heading to the West or the East of Kandy without entering Kandy Lake Road.
After establishing the tunnel, it is expected to reduce the passing time from Suduhumpola to Tennekumbura from 2 hours to less than 30 minutes during rush hours. The Kandy tunnel is expected to save money due to the extra fuel combustion and reduce air pollution near Sri Dalada Maligawa (Temple of the Sacred Tooth Relic).
In addition, the tunnel will boost the economy of Kandy by providing a short connection between the Kandy industrial zone and the road (A1) to Colombo where container terminals for export are located.
The Korean government’s decision to finance US$ 200 million for this project comes at a significant time as when Sri Lanka and Korea mark the 40th anniversary of diplomatic relations this year.
Korea Eximbank provided its first ODA loan for the rehabilitation of the Colombo-Galle road (A2) in 1990. As of now, the Bank has approved US$ 805 million for 28 development projects in Sri Lanka.
Korea Eximbank also provides financing for international trade and overseas investment, to promote bilateral economic cooperation. Since 1978, Korea Eximbank has provided US$ 386 million both for trade between Sri Lanka and Korea and for Korean companies’ foreign direct investments in Sri Lanka.
