Escalating land prices, delays in acquisition:

Southern Highway construction costs increase by Rs. 2b

BY HIRAN H.Senewiratne

THE Government has to spend an additional Rs. 2 billion for the construction of the Colombo-Southern Highway due to escalating land acquisition prices and delay in releasing of lands for the completion of the project.

The Government has initially estimated Rs. 28 billion for the total project. The delay of releasing lands and acquisition of land at the current market rate resulted it to go beyond the estimated cost, Secretary to the Ministry of Highways Sarath Amarasekera told the Daily News.

He said the Government has not still estimated the cost due to the delay of the project, which would be around Rs 1 billion and the balance for the acquisition of properties. Earlier the Government paid a depreciative price for property owners but changed that policy and decided to pay them at real market price to provide fairness to owners, he said.

According to Amarasekara acquiring of certain lands for the construction of the highway were cleared last week has caused certain delay for the construction work. Due to that total investment for the highway is estimated to touch more than Rs 30 billion.

The total distance of the highway is 126 km and the Asian development Bank and the Japanese Bank for International Cooperation are funding this project.

The construction work of the highway is done in three phases. At present construction work is in progress between Kurudugahahetakma to Godagama in Matara.

Tenders have been awarded to a leading Chinese construction company, China Harbour Company to commence the construction work between Kottawa to Dodangoda.

The estimated cost of this phase is around Rs. 8.5 billion. However the government has also called for tenders for the completion of a 30-km stretch between Kurudugahahatekma to Dodangoda. The highway will be completed by 2008.