President Anura Kumara, addressing a campaign rally in Kandy during the 2024 general election, revealed that he had held successful discussions with the Japanese Ambassador on securing Japanese assistance for the Kandy Expressway. He made the announcement after considering repeated requests from the Mahanayake Theros to complete the project.
However, in a surprising turn, the President recently launched the Mirigama–Kadawatha section of the expressway with funding secured through a Chinese loan. Japan had earlier extended loans for Sri Lanka’s airport development at a minimal 0.18% interest rate. In contrast, Anura’s government borrowed from China at 3.5% interest for the highway section.
Parliament’s COPF Chairman, Harsha de Silva, warned that the Chinese loan terms were highly unfavourable to Sri Lanka. China had initially agreed to lend one billion US dollars at a fixed rate of 2.5%. However, the Chinese government scaled the facility down to 500 million dollars while raising the interest to a floating rate of 3.5%. De Silva argued in COPF that this restructuring placed Sri Lanka at a clear disadvantage.
Ahead of the inauguration of the Mirigama–Kadawatha section, the Chinese Ambassador met with former President Mahinda Rajapaksa on the day he was leaving his official residence. Later, he met with Ranil Wickremesinghe. Embassy sources stated that the ambassador visited them officially to deliver invitations for China’s National Day. Some media reports, however, suggested the ambassador had also sought assurances from Anura’s administration that Mahinda would not be harassed.
The Chinese Ambassador, who met Mahinda and Ranil, attended the opening ceremony of the Mirigama–Kadawatha section and praised Anura’s government. This is because the deal for the Mirigama–Kadawatha section is financially beneficial to China, and granting loans for building the expressway also provides an opportunity to win over the Mahanayake Theros and the Sinhala Buddhist population of Sri Lanka.
It is reported that whenever the Chinese Ambassador met the Mahanayake Theros, he also discussed the Kandy Expressway. Based on the ambassador’s interest in the Kandy Expressway, the government had the opportunity to renegotiate this loan and interest in Sri Lanka’s favour. Observers argue that this interest could have provided the government with an opportunity to secure more favourable loan terms for Sri Lanka.
Yet the government failed to act—perhaps because the present administration, too, has been trapped in the Chinese debt snare initiated by Mahinda’s government. The concerning aspect is that the government is entering into a disadvantageous deal for Sri Lanka at a time when the country’s economy has already collapsed.
