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China Exhim Bank delays funding for Matara -Katharagama railway

China Exhim Bank has delayed payment of US$ 83,460,000 for the construction of new railway line from Matara to Katharagama to the contractual company by 2 years and 06 months from August 2013, thus re sulting a foreign exchange loss of Rs. 737.6 million.

Although the contract was due to be completed within a period of 48 months as required by the contract agreement, the Government had suffered a foreign exchange loss of Rs.36.5 million in consequence of extending the project periods in three times. Official sources said.

Failure in Recovering Liquidated Damages in terms of Sections 8.7 and 14:15 (6) of the contract agreement for the construction of railway line from Matara to Kataragama, will be causing a considerable loss.

If delays occur in the constructions, liquidated damages of 0.1 per cent of the contract value should have been charged from the contractor in respect of every week followed by the scheduled date for the completion of the constructions, Finance Ministry official said.

The contractor had delayed the completion of the constructions by 34 weeks as at 14 June 2018 . Accordingly, liquidated damages of Rs.1,445.85 million should have been recovered from the Contractor, whereas it had not been recovered even by August 2018


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