Sri Lanka’s state-owned SD & CC has received Cabinet nod to make significant purchases of Plant and Equipment for the Construction industy.
The Cabinet of Ministers – as evidenced by the attached documents – have given their approval to SD&CC to make capital expenditure with the Chinese state-owned corporate M/s CATIC in the sum of USD 147.4 Million. The transaction is under what is referred to as Suppliers’ Credit. In this instance the period of the credit is 4 years with an interest rate at 3% per annum.
The same Cabinet also approved a spend of USD 82.7 Million with the China state-owned M/s HUNAN again on a 4 year period with interest set at 3% per annum
According to the documentation, this will provide cover for 85% of the foreign component of the purchases. The balance of 15% is the local component.
Again the Cabinet has given approval to obtain the local component also from the Chinese-state-owned entities. This time the interest rate is 10% and the repayment period of 4 years.
M/s CATIC will provide Rs 470.9 Million – at 10% over 4 years.
M/s HUNAN will provide Rs 263.5 Million – at 10% over 4 years.
The government of Sri Lanka via its state-owned SD&CC has embarked on an expenditure of Rs 48 Billion approximately to procure plant machinery and equipment for the construction industry especially for the requirements of state owned establishments.
It possibly implies that after years of servicing the construction industry private contractors and other state agencies simply do not have any of this heavy equipment to use in the development of mother Lanka.
Many observers would not have failed to miss out that the SD&CC enjoys a at best turnover of Rs 4 Billion per annum. In ordinary times the SD&CC would have to increase its project turnover by at least 40 times! The general yardstick in the construction industry is that of any project 30% is for plant equipment.
At this rate the SD&CC will need to increase its turnover by 40 times in the space of 4 years. A hack noted that this is am amazng piece of a decision. The only remnant for us journalists is to find out who are the agents in Sri Lank?
EDITORS NOTE: Stranger things have happened at sea.
