CEP Phase III loan: Verdict this week | Sunday Observer

CEP Phase III loan: Verdict this week

The decision regarding the granting of a loan of Yen 100 million by the Bank of Tokyo-Mitsubishi UFJ to fund Phase III of the Central Expressway project (CEP) is to be announced this week.

Speaking to the Sunday Observer, Minister of Higher Education and Highways Lakshman Kiriella confirmed that a team from the bank is scheduled to meet officials from the Ministry of National Policies and Economic Affairs tomorrow to discuss matters relating to the requested loan. “They will announce their decision immediately,” he said.

The requested loan facility from the Japanese Bank has come under criticism lately with allegations that it is being obtained at an exorbitant interest rate. However, the Secretary to the Ministry of Higher Education and Highways, D.C. Dissanayake said it is the first time that a private Japanese bank has agreed to provide a long-term loan to a foreign government.

“The expected interest rate is at around 2.04 per cent,” he said, adding that despite market variations it is not expected to rise above 2.2 percent. “Therefore, it is a desirable loan due to its favourable conditions,” he said ,adding that the loan is expected to be fully paid within 15 years after a grace period of six years.

Meanwhile, Japanese contractor Taisei Corporation is expected to commence construction of Phase III of the CEP from Pothuhera to Galagedara by January 2018 after the loan facility is granted.