The extension of the new railway line from Matara to Kataragama will be carried out in three phases - Phase I from Matara to Beliatta, second phase from Beliatta to Hambantota and third phase from Hambantota to Kataragama.
Responding to a request from the Sri Lankan government, the Government of China has agreed to provide a US$ 278.2 million loan through Export - Import (Exim) Bank of China on concessional terms to finance the Phase I of the Matara- Kataragama Railway Extension Project, a Finance and Planning Ministry release said.
In Phase I a 26.75km long single line broad gauge rail track from Matara to Beliatta will be constructed along with the supporting structures. These include culverts, bridges over rivers, viaducts required over the Nilwala river flood plain, level crossings, underpass boxes, road diversion, four railway stations and functional requirements including construction of railway quarters for staff, earth embankments and ground treatment etc.
The government expects the demand for transport between the Southern Province and other provinces of the country to increase due to rapid developments in the Southern region and operations of the Hambantota Port and Mattala Airport.
The project will meet this demand in providing a clean, efficient and economical transport service to facilitate commuter and cargo transport between Colombo and Kataragama.
The new railway line will also be beneficial to commuters and transportation of goods from remote areas of Sri Lanka's Southern Province, the government says.
Out of the total loan amount, US$ 200 million will be provided under Preferential Buyer's Credit facility and the balance US$ 78.2 million will be provided under Chinese Government concessional loan facility.
These loan facilities will be provided at an annual interest rate of 2% with a repayment period of 20 years including a 5 year grace period.
The Exim Bank of China signed the relevant Loan Agreement with the government of Sri Lanka on 19th February 2013, the Finance Ministry said.