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Chinese projects proving costly for Lanka

[Express Buzz, Monday, 7 December 2009 09:45 No Comment]

The whooping US $ 6.1 billion worth mega projects that China bagged in post-war Sri Lanka is proving to be costly for the island nation both in terms of money and jobs, The Sunday Times reports.

There are three serious issues that ought to worry Sri Lankans, the paper pointed out. Firstly, Chinese funds are neither grants nor soft loans, but loans taken at commercial rates from the Exim Bank of China. Secondly, the cost of the projects has been heavily inflated. And thirdly, the Chinese are bringing not only equipment and highly skilled personnel from China, but also unskilled labour, the number of which could swell to 25,000 soon.

For example, the Chinese-gifted Performing Arts Society, now under construction in Colombo at a cost of US $ 200 million, employs around 1,000 Chinese labourers, the paper said. Express learns that in the Humbantota port, all the work is being done by imported Chinese labour. However, in the case of the US $ 200 worth Humbantota airport project it is said that Sri Lankan engineers and designers will be used.

But all in all, Sri Lankans stand to gain little in terms of employment in these much trumpeted Chinese mega projects. The absence of Sri Lankan workers also means that the Chinese will be repatriating a part of the loan to China as wages for their workers in the island nation.

HIGH COST COMPARED TO INDIA AIDED PROJECTS: The Sunday Times points out that Chinese-aided projects cost almost double that of Indian-aided projects. For example, China had given a loan of US $ 245 million for a 56-km railway track from Pallai to Kankesanthurai in the Tamil-speaking Northern Province. The cost works out to more than US $ 4 million a km. This is in marked contrast to the cost of the 92-km stretch of rail track from Omanthai (near Vavuniya) to Pallai, which is US $ 185 million. The cost of this project works out to about US $ 2 million per km. The Omanthai-Palai line is being built with a soft loan from India.

CHINA GETS MAJOR ROAD PROJECTS IN NORTH: In the Northern Province, construction of all adjunct roads has been given to four Chinese companies on an urgent basis, following a Cabinet decision on October 6, the paper says.

The Chinese have also been given a Special Economic Zone, all for themselves, strategically located near Colombo, which has the island nation’s only international airport and harbour to date.

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