Annual Report 2010 - Ministry of Finance and Planning

5 | FOREIGN FINANCINGFinancing for RailwaysThe railway network consists of1,640km, but the railway serviceoperates only on 1,200km of railwayline due to the closure of severalsections in the Northern Provinceduring the past three decades. Afterthe end of the war in May 2009 ithas become important to operatethe railway service throughout theentire railway network including theNorthern Province in order to providea satisfactory transport service tothe people of our country. Thereforerestoration of the destroyed railwaylines in the Northern Province wasassigned high priority in 2010.The Government has increasedinvestment during the last fouryears on railways, especially forrehabilitation of the existing tracks andsignalling system, extension of tracks,procurement of Diesel Multiple Units(DMUs), locomotives and passengercarriages. The total commitment forthe railway sector during the last fiveyears was around USD 800 million ofwhich USD 497 million or more than60 percent was made in 2010. Ofthe total commitment in 2010, USD416 million was committed by theGovernment of India for restorationof the railway lines in the NorthernProvince.Table 5.15 > Projects committed for the last five years (USD Mn)Projects 2007 2008 2009 201015 Nos. of DMU’s – China 38100 Nos. of Rail Passenger carriages – China 2715 Nos. of Tank Wagon – Pakistan 02Up-gradation of Southern Railway Phase I – India 10013 Nos of DMU’s – China 101Restoration of Southern Railway Phase II – India 67Restoration of Northern Railway Line – India 416Rehabilitation of Eastern Railway Line – Austria 14Total 68 100 101 497Source: Department of External ResourcesOngoing ProjectsUpgrading of Southern Railwayfrom Colombo to MataraThe total cost of the project wasestimated at USD 212.4 million ofwhich USD 167.4 million was expectedto be funded through the EXIM Bank ofIndia. Initially, the Government of Indiaprovided USD 100 million in 2008 forthis project. The balance of USD 67.4million was committed by the IndianGovernment in 2010.The objective of the project is toupgrade the railway track fromColombo to Matara to the standardlevels allowing a maximum speed of100kmph. It will increase the averageoperating speed from 40kmphat present to 80kmph allowing apassenger express train to coverthe Colombo – Galle distance withinapproximately two hours. The projectcommenced in 2008 and is scheduledto be completed by the end of 2012.Restoration of NorthernRailway ServicesThe Government of India committedUSD 416.4 million in 2010 for theimplementation of this project. TheNorthern Province railway networkwas completely destroyed due to theconflict prevailing in the area duringthe last 25 years and as a result, thetrain service on the Northern Provincewas limited to Vavunia for the last 20years. The objective of this project isto revive the economic activities of thecommunity in the Northern Provinceby restoring the Northern RailwayService.The main components of theproject are reconstruction of therailway line from Omanthai to Pallaicovering a distance of 90km and268