Sri Lanka Government has under utilized foreign loan provisions amounting to to Rs.1,350 million allocated for Kankasanthurai Harbour development and therefore delaying the planned development activities of the port, official progress report revealed.
This money was granted to construct an administrative building and a store for direction and carryout development activities of the Kankasanthurai Harbour on the approval of the cabinet of ministers.
That financial provision had been financed under line of credit of Indian Exim Bank. It had been planned to complete only about 5 per cent of the relevant procurement activities and constructions relevant to the project during the year 2018 under review.
But that planned activities were at primary level and total financial provision had not been utilized. Therefore, state loans provided for the project had failed to utilize to the optimum, report disclosed.
India has extended a fresh financial assistance of USD 45.27 million for upgrading Kankesanthurai (KKS) Harbour into a commercial port and strengthening the country's efforts to become a regional maritime hub.
Sri Lanka's Ministry of Finance and Export-Import Bank of India (Exim Bank) signed an agreement in this regard on January 10, the Indian High Commission said.
The upgradation project would make KKS Harbour a full- fledged commercial port, further strengthening Sri Lanka's efforts to become a regional maritime hub, the statement said.
In terms of the MoU between India and Sri Lanka for rehabilitation of KKS Harbour, four out of the six phases of the rehabilitation have already been completed under India's grant assistance.
This includes preparation of Detailed Project Report (DPR), works related to Geo-technical studies, wreck removal and disposal, dredging and hydrographic survey.
The fresh assistance of USD 45.27 million would be used for the remaining two phases involving works relating to the rehabilitation of the breakwater and existing pier, construction of a new pier for commercial cargo handling, installation of port infrastructure facilities, etc.
The KKS port was rendered ineffective after the LTTE attacked it during the North East war. The port was key in connecting the Jaffna peninsula with the rest of Sri Lanka and also India.