Lankan Ranger
ELITE MEMBER
- Joined
- Aug 9, 2009
- Messages
- 12,550
- Reaction score
- 0
China - Sri Lankas top lender in 2009
Since the establishment of diplomatic relations in January 1957, bilateral relations between China and Sri Lanka have seen smooth and upward development.
The exchanges and co-operation in the political, economic and social fields have been frequent and fruitful. China and Sri Lanka share common views and support each other on major international issues, with Sri Lanka adhering to the One China policy, which recognises Taiwan as part of China.
All past and present presidents of Sri Lanka have visited China, and there are frequent visits of State leaders and high-ranking officials between the two nations.
As of December 2006, Sri Lanka has been the recipient of grants to the value of RMB 63.9 million, credit lines totaling RMB 64.5 million and preferential loans of RMB 96 million from China for development and infrastructure projects.
The most visible symbol of Chinese assistance remains the BMICH which is an enduring testimonial to Sri Lanka - China friendship.
Prior to the Rajapaksa period, China had funded several projects including the Supreme Court Complex, the Central Mailing Exchange, Gin Ganga Flood Protection Scheme and the redevelopment of the Lady Ridgeway Childrens Hospital.
In the aftermath of the tsunami disaster China helped Sri Lanka build three fisheries harbours for those affected by the event and extended US$ 300 million worth of support.
The Rajapaksa era has taken this silky relationship to an unparalleled height during the past four years as China emerged as the islands biggest financial donor in 2009.
The Treasury Department of the Ministry of Finance said China became the biggest donor to Sri Lanka in 2009, with US$ 1.2 billion (Dh 4.4bn) worth of assistance in the form of grants, loans and credit representing 54 percent of the total $ 2.2billion committed by foreign countries and multilateral agencies.
The next highest contributors were the Asian Development Bank with $ 423 million and the World Bank with $241 million.
As many economists believe, under this strategy the countrys economy is not being pushed from the back, but is being pulled from the front. The strategy is seen with the commencement of the infrastructure development of Sri Lanka in the fields of ports, roads and highways, power, public utilities, arts and culture.
It is in this context that the Government embarked on a more rational and exciting journey aligned with China to create better infrastructure conveniences to the nation that would bring enormous economic gains in its 10-year development strategy.
The key factors that attract Foreign Direct Investments and progress to any country are peace, a sound investment climate and most importantly, political stability coupled with proper infrastructure such as aviation and shipping facilities, electricity, telecommunication and transportation.
Sri Lanka as a transshipment hub
The development of a port in Southern Sri Lanka to reap the benefits of busy international shipping lanes closer to Sri Lanka had been in the air for over three decades with successive governments taking no serious interest in it.
The proposal embodied the construction of a deep water harbour in Hambantota, demonstrating its potential of being developed as the deepest and largest harbour in the world, with a location just half an hour off the worlds busiest sea-lane which is used by 100 - 200 ships a day.
Construction of the Hambantota Port, expediting work on the Southern Highway and converting Hambantota to a commercial town. As soon as President Rajapaksa was elected, he got the Hambantota project moving, and most importantly, through direct talks with Chinese leaders. By visiting the Peoples Republic of China three times during the past three years, he persuaded and obtained the necessary funds from the Chinese government to kickstart the project.
The total cost of the project is US $ 360 million for phase one. Thereafter, phase two and three will be constructed with another US$ 600 million.
The project is financed through the EXIM Bank of China and the construction is being undertaken by the China Harbour Engineering Corporation (CHEC) and the Sino Hydro Corporation. China Harbour Corporation is one of the worlds largest companies in this field and bears the national qualification under the Ministry of Construction of the Peoples Republic of China for Harbour, Road, Building, Environmental, EPC and other engineering projects.
The Sino Hydro Corporation is also the largest and most successful Chinese construction company in the field of hydraulic and hydropower engineering.
The Hambantota Port Development Project will be constructed to handle 100,000 DWT vessels. It will have an approach channel 210 metres wide.
To support logistics and bunkering simultaneously with the port commencing its operations, the Hambantota Port Tank Farm Project has also commenced under Exim Bank funding. This bunkering facility will comprise 14 tanks. Eight tanks will provide oil for ships while three will be used to store LP gas.
The rest will be used to provide oil for aircraft. The total cost of the project is US$ 76 million; the China Huanqiu Contracting and Engineering Corporation which has ranked among the top 225 international contractors and top 200 international design firms released by the Engineering News Record in six successive years and remains the only Chinese company to enjoy both honours simultaneously, has undertaken this project. To date, this company has undertaken more than 36 tank farm projects around the World. They are expected to work on this project before 2012.
The Port of Hambantota is planned as a service and industrial port and subsequently, it could be developed as a transshipment port depending on increasing cargo volumes.
Energy
This power plant, constructed in Norochcholai, a coastal fishing village 120 km north of Colombo along the west coast, will have an ultimate capacity of 900 megawatts of electricity when it is completely developed.
The first stage at a cost of US$ 455 million generates 300 Megawatts to the national grid while the second and third phase will generate 600 Megawatts. The cost for the second and third phase is estimated at US $ 891 million. The construction of the first phase of the Norochcholai Coal Power Plant was inaugurated by President Rajapaksa on May 11, 2006. The construction of the second stage will simultaneously progress with the work on the third stage expected to begin in 2012. The completion date is set for 2013. It is expected to deliver a steady and low cost energy output of 1658 Giga Watt hours annually to the consumers, when completed.
The construction of the three phases of the project is to cost US$ 1.35 billion, according to reports by the Ministry of Energy. Financial aid for the project is provided by the Exim Bank of China.
Construction is carried out by China National Machinery and Equipment Import and Export Corporation. The Chinese have agreed to carry out the project on a Design, Build and Transfer basis. The main objective of the project is to cater to the increasing demand for electricity while supplying steady and low cost electricity to the national grid. With the completion of the Norochcholai coal plant, the cost of a unit of electricity will be reduced to Rs 5 from Rs.11. The CMEC is using the best technology available in coal power generation in this technologically advanced coal power plant.
Development of highways
Colombo - Katunayake expressway
The important roads in a country are the ones linking the international airport and the capital city.
The proposed expressway will be 25 km long and 27.2 metres wide and will have four lanes, two on either side.
The estimated cost of the highway is US$ 292 million of which 85 percent ($ 252 million) will be provided as a loan by the Government of the Peoples Republic of China whereas the balance 15 percent ($ 40 million) has to be borne by the Government of Sri Lanka.
The completion of the highway will enable vehicles to reach the Katunayake airport within 20 minutes; this now takes one and a half hours.
Southern Expressway- Pinnaduwa to Matara
A long-felt need is becoming a reality and once more the Chinese Government has come to the forefront to fund this section of the Southern Expressway with US$ 162 million.
The Southern Expressway, which is largely funded by the ADB and JICA, consists of four sections - two funded by JICA, one by ADB, and the other by China Exim Bank. The bulk of the work is being carried out by China Harbour Engineering Corporation Ltd. (CHEC) which has been awarded the first bid section (34.5 km long), from Kottawa in the capital, Colombo, 20 km southward to connect the A4; the termination is in Dodamgoda where the second bid section starts.
Apart from the above, a number of road network projects in the reconstruction process of the North and the East is in the pipeline to be funded by the Exim Bank of China, including the reconstruction of the A9 expressway, to the value of US$ 520 million.
During President Rajapaksas State visit to China in 2007, the setting was created to make the existing plan a more productive and significant one. The MoU on Cultural Affairs which was then signed strengthened the relations between the two countries in the field of culture, resulting in the speeding up of the construction of the National Performing Arts Theatre.
The new building complex of 33,000 sq.ft is being constructed on a 217 hectare site. China bears the cost of the theatre complex amounting to US$ 23 million for which the agreement was signed on November 25, 2007, for the acceleration of the project work and award of contract. The Chinese authorities entrusted the construction of the theatre to Yanjian Group to complete the project within 26 months.
The new theatre will be a masterwork of architecture designed by the Chinese and festooned with the image of traditional Sri Lankan architecture. The National Performing Arts Theatre once completed will contribute to the development of performing arts in Sri Lanka and to the promotion of the distinction of artistes. It will remain a fitting monument to Sino-Sri Lanka friendship.
Railway transportation
China National Machinery Import and Export Corporation signed an agreement with the Sri Lankan Railways Department to provide 100 rail carriages. Accordingly, the railway authorities of Sri Lanka, for the first time in history, obtained a warranty from the manufacturers that they will compensate the Railways Department US$ 50 for each day, in case a carriage is taken out of operation within the warranty period.
Another US$ 100 million has been obtained from the EXIM Bank to boost the capacity of the Sri Lankan Railway to acquire two diesel multiple units AC, seven UC (up-country) and four DMU KV (Kelani Valley) from China South Locomotive and Rolling Stock Corporation Ltd.
The extension of the Matara-Kataragama Railway line (first stage) at a cost of US$ 60 million is also on the pipeline to be finalised in 2010.
Second international airport
Sri Lankas second international airport in Mattala, Hambantota will be commissioned in December 2011 with the first flight landing in the end of 2011.
The airport construction project is under way on a 2,000 hectare land at a cost of US$ 200 million and the EXIM Bank of China is financing the project under a concessional loan constructed by the CHEC. The project was launched by President Rajapaksa on November 27, 2009.
The new airport will be a boon to the local aviation industry while being a catalyst for the Southern Province economic development, generating international trade, tourism, vocational training and employment.
It is obvious that during the past four years, Sri Lanka-China relations have reached new heights and China has figured prominently in providing funding for socio-economic development projects in particular, during the concerned period reaching an extraordinary level of US$ 3.5 billion.
It adds to a significant amount although only a fraction compared to Chinas total lending package to other countries. All these mega infrastructure projects, some of which would be completed by the year 2011, will alter the infrastructure landscape of Sri Lanka, bringing in many positive direct development as well as trickle-down effects in the economic empowerment of the islands people. It undoubtedly would mark a golden era in Sino-Sri Lanka friendship.
As both countries are willing to further increase friendly exchanges between the Governments and people of different walks of life, and expand bilateral exchanges and cooperation in politics, economy, trade, culture and tourism the stage is set for both countries to accumulate even more benefits from this new-found dynamism.
Features | Sundayobserver.lk - Sri Lanka
Since the establishment of diplomatic relations in January 1957, bilateral relations between China and Sri Lanka have seen smooth and upward development.
The exchanges and co-operation in the political, economic and social fields have been frequent and fruitful. China and Sri Lanka share common views and support each other on major international issues, with Sri Lanka adhering to the One China policy, which recognises Taiwan as part of China.
All past and present presidents of Sri Lanka have visited China, and there are frequent visits of State leaders and high-ranking officials between the two nations.
As of December 2006, Sri Lanka has been the recipient of grants to the value of RMB 63.9 million, credit lines totaling RMB 64.5 million and preferential loans of RMB 96 million from China for development and infrastructure projects.
The most visible symbol of Chinese assistance remains the BMICH which is an enduring testimonial to Sri Lanka - China friendship.
Prior to the Rajapaksa period, China had funded several projects including the Supreme Court Complex, the Central Mailing Exchange, Gin Ganga Flood Protection Scheme and the redevelopment of the Lady Ridgeway Childrens Hospital.
In the aftermath of the tsunami disaster China helped Sri Lanka build three fisheries harbours for those affected by the event and extended US$ 300 million worth of support.
The Rajapaksa era has taken this silky relationship to an unparalleled height during the past four years as China emerged as the islands biggest financial donor in 2009.
The Treasury Department of the Ministry of Finance said China became the biggest donor to Sri Lanka in 2009, with US$ 1.2 billion (Dh 4.4bn) worth of assistance in the form of grants, loans and credit representing 54 percent of the total $ 2.2billion committed by foreign countries and multilateral agencies.
The next highest contributors were the Asian Development Bank with $ 423 million and the World Bank with $241 million.
As many economists believe, under this strategy the countrys economy is not being pushed from the back, but is being pulled from the front. The strategy is seen with the commencement of the infrastructure development of Sri Lanka in the fields of ports, roads and highways, power, public utilities, arts and culture.
It is in this context that the Government embarked on a more rational and exciting journey aligned with China to create better infrastructure conveniences to the nation that would bring enormous economic gains in its 10-year development strategy.
The key factors that attract Foreign Direct Investments and progress to any country are peace, a sound investment climate and most importantly, political stability coupled with proper infrastructure such as aviation and shipping facilities, electricity, telecommunication and transportation.
Sri Lanka as a transshipment hub
The development of a port in Southern Sri Lanka to reap the benefits of busy international shipping lanes closer to Sri Lanka had been in the air for over three decades with successive governments taking no serious interest in it.
The proposal embodied the construction of a deep water harbour in Hambantota, demonstrating its potential of being developed as the deepest and largest harbour in the world, with a location just half an hour off the worlds busiest sea-lane which is used by 100 - 200 ships a day.
Construction of the Hambantota Port, expediting work on the Southern Highway and converting Hambantota to a commercial town. As soon as President Rajapaksa was elected, he got the Hambantota project moving, and most importantly, through direct talks with Chinese leaders. By visiting the Peoples Republic of China three times during the past three years, he persuaded and obtained the necessary funds from the Chinese government to kickstart the project.
The total cost of the project is US $ 360 million for phase one. Thereafter, phase two and three will be constructed with another US$ 600 million.
The project is financed through the EXIM Bank of China and the construction is being undertaken by the China Harbour Engineering Corporation (CHEC) and the Sino Hydro Corporation. China Harbour Corporation is one of the worlds largest companies in this field and bears the national qualification under the Ministry of Construction of the Peoples Republic of China for Harbour, Road, Building, Environmental, EPC and other engineering projects.
The Sino Hydro Corporation is also the largest and most successful Chinese construction company in the field of hydraulic and hydropower engineering.
The Hambantota Port Development Project will be constructed to handle 100,000 DWT vessels. It will have an approach channel 210 metres wide.
To support logistics and bunkering simultaneously with the port commencing its operations, the Hambantota Port Tank Farm Project has also commenced under Exim Bank funding. This bunkering facility will comprise 14 tanks. Eight tanks will provide oil for ships while three will be used to store LP gas.
The rest will be used to provide oil for aircraft. The total cost of the project is US$ 76 million; the China Huanqiu Contracting and Engineering Corporation which has ranked among the top 225 international contractors and top 200 international design firms released by the Engineering News Record in six successive years and remains the only Chinese company to enjoy both honours simultaneously, has undertaken this project. To date, this company has undertaken more than 36 tank farm projects around the World. They are expected to work on this project before 2012.
The Port of Hambantota is planned as a service and industrial port and subsequently, it could be developed as a transshipment port depending on increasing cargo volumes.
Energy
This power plant, constructed in Norochcholai, a coastal fishing village 120 km north of Colombo along the west coast, will have an ultimate capacity of 900 megawatts of electricity when it is completely developed.
The first stage at a cost of US$ 455 million generates 300 Megawatts to the national grid while the second and third phase will generate 600 Megawatts. The cost for the second and third phase is estimated at US $ 891 million. The construction of the first phase of the Norochcholai Coal Power Plant was inaugurated by President Rajapaksa on May 11, 2006. The construction of the second stage will simultaneously progress with the work on the third stage expected to begin in 2012. The completion date is set for 2013. It is expected to deliver a steady and low cost energy output of 1658 Giga Watt hours annually to the consumers, when completed.
The construction of the three phases of the project is to cost US$ 1.35 billion, according to reports by the Ministry of Energy. Financial aid for the project is provided by the Exim Bank of China.
Construction is carried out by China National Machinery and Equipment Import and Export Corporation. The Chinese have agreed to carry out the project on a Design, Build and Transfer basis. The main objective of the project is to cater to the increasing demand for electricity while supplying steady and low cost electricity to the national grid. With the completion of the Norochcholai coal plant, the cost of a unit of electricity will be reduced to Rs 5 from Rs.11. The CMEC is using the best technology available in coal power generation in this technologically advanced coal power plant.
Development of highways
Colombo - Katunayake expressway
The important roads in a country are the ones linking the international airport and the capital city.
The proposed expressway will be 25 km long and 27.2 metres wide and will have four lanes, two on either side.
The estimated cost of the highway is US$ 292 million of which 85 percent ($ 252 million) will be provided as a loan by the Government of the Peoples Republic of China whereas the balance 15 percent ($ 40 million) has to be borne by the Government of Sri Lanka.
The completion of the highway will enable vehicles to reach the Katunayake airport within 20 minutes; this now takes one and a half hours.
Southern Expressway- Pinnaduwa to Matara
A long-felt need is becoming a reality and once more the Chinese Government has come to the forefront to fund this section of the Southern Expressway with US$ 162 million.
The Southern Expressway, which is largely funded by the ADB and JICA, consists of four sections - two funded by JICA, one by ADB, and the other by China Exim Bank. The bulk of the work is being carried out by China Harbour Engineering Corporation Ltd. (CHEC) which has been awarded the first bid section (34.5 km long), from Kottawa in the capital, Colombo, 20 km southward to connect the A4; the termination is in Dodamgoda where the second bid section starts.
Apart from the above, a number of road network projects in the reconstruction process of the North and the East is in the pipeline to be funded by the Exim Bank of China, including the reconstruction of the A9 expressway, to the value of US$ 520 million.
During President Rajapaksas State visit to China in 2007, the setting was created to make the existing plan a more productive and significant one. The MoU on Cultural Affairs which was then signed strengthened the relations between the two countries in the field of culture, resulting in the speeding up of the construction of the National Performing Arts Theatre.
The new building complex of 33,000 sq.ft is being constructed on a 217 hectare site. China bears the cost of the theatre complex amounting to US$ 23 million for which the agreement was signed on November 25, 2007, for the acceleration of the project work and award of contract. The Chinese authorities entrusted the construction of the theatre to Yanjian Group to complete the project within 26 months.
The new theatre will be a masterwork of architecture designed by the Chinese and festooned with the image of traditional Sri Lankan architecture. The National Performing Arts Theatre once completed will contribute to the development of performing arts in Sri Lanka and to the promotion of the distinction of artistes. It will remain a fitting monument to Sino-Sri Lanka friendship.
Railway transportation
China National Machinery Import and Export Corporation signed an agreement with the Sri Lankan Railways Department to provide 100 rail carriages. Accordingly, the railway authorities of Sri Lanka, for the first time in history, obtained a warranty from the manufacturers that they will compensate the Railways Department US$ 50 for each day, in case a carriage is taken out of operation within the warranty period.
Another US$ 100 million has been obtained from the EXIM Bank to boost the capacity of the Sri Lankan Railway to acquire two diesel multiple units AC, seven UC (up-country) and four DMU KV (Kelani Valley) from China South Locomotive and Rolling Stock Corporation Ltd.
The extension of the Matara-Kataragama Railway line (first stage) at a cost of US$ 60 million is also on the pipeline to be finalised in 2010.
Second international airport
Sri Lankas second international airport in Mattala, Hambantota will be commissioned in December 2011 with the first flight landing in the end of 2011.
The airport construction project is under way on a 2,000 hectare land at a cost of US$ 200 million and the EXIM Bank of China is financing the project under a concessional loan constructed by the CHEC. The project was launched by President Rajapaksa on November 27, 2009.
The new airport will be a boon to the local aviation industry while being a catalyst for the Southern Province economic development, generating international trade, tourism, vocational training and employment.
It is obvious that during the past four years, Sri Lanka-China relations have reached new heights and China has figured prominently in providing funding for socio-economic development projects in particular, during the concerned period reaching an extraordinary level of US$ 3.5 billion.
It adds to a significant amount although only a fraction compared to Chinas total lending package to other countries. All these mega infrastructure projects, some of which would be completed by the year 2011, will alter the infrastructure landscape of Sri Lanka, bringing in many positive direct development as well as trickle-down effects in the economic empowerment of the islands people. It undoubtedly would mark a golden era in Sino-Sri Lanka friendship.
As both countries are willing to further increase friendly exchanges between the Governments and people of different walks of life, and expand bilateral exchanges and cooperation in politics, economy, trade, culture and tourism the stage is set for both countries to accumulate even more benefits from this new-found dynamism.
Features | Sundayobserver.lk - Sri Lanka
