STAFF REPORTER
COLOMBO : Sri Lankan Prime minister Mahinda Rajapaksa in his capacity as the Minister of Economic Policies and Plan has issued a gazette notification under the Strategic Development Project Act (2248/15 dated 5th October) identifying the project to construct and operate a four lane elevated highway from New Kelani Bridge to Athurugiriya via Rajagiriya by China Harbour Engineering Company Ltd. with an envisaged investment of USD 821.6 million.
The project will be implemented with 100 percent foreign funding under Design-Build-Finance-Operate-Maintain and Transfer (DBFOMT) basis and the CHEC- NKBA Elevated Highway (Pvt) Limited, which would be the project company will build, operate and maintain the project.
As per the Gazette, this Project is one of the largest foreign investments in the road sector with a committed investment of USD 821.6 million and is expected to be financed, with an equity contribution of USD 246.50 million, loan of USD 575.10 million, to be made during the construction period of the project.
The Project Construction Period is three years from the effective date of the related Concession Agreement and the project operational and maintenance period is 15 years after the construction period.
The Gazette further provides details on China Harbour Engineering Company Ltd the Bidder, which is an Engineering Company that specializes in infrastructure development such as marine engineering, roads and bridges, dredging and reclamation, railways and airports. CHEC is also the contractor that will carry out engineering, procurement and construction of the Project. CHEC for the purpose of implementation of this project will establish a special purpose company to be duly incorportared under the Laws of Sri Lanka through its parents or an affiliate 100 percent owned by CHEC.
A gamut of tax exemptions are proposed for the project subject to the project fulfilling terms and conditions such as corporate income tax, capital gains tax and dividend tax for a period of 15 years, WHT exemption on payments such as management fees , royalty, service fees for 15 years, Expatriate income tax for 20 employees for 15 years. Other taxes such as value added tax , customs duty, port and airport development levy , Cess and Excise Special provisions are also exempt for 15 years. These exemptions are detailed out in the notification,
As per the notification, upon completion of the project operational and maintenance period, the Project Company shall hand over the Project to the Ministry of Highways.
