The Sri Lankan Cabinet has given the green light for the payment of Rs. 7.9 billion to the China Harbor Engineering Corporation (CHEC) for the construction of the Kottawa-Dodangoda section of the Southern Expressway. This payment resolves a long-standing financial dispute that has dragged on for over a decade.
The Kottawa-Dodangoda section, a 35 km stretch of the Southern Expressway, was constructed by CHEC and funded by the Japan Bank for International Cooperation (JBIC). The section was opened in 2011. Shortly after, a dispute emerged between CHEC and Oriental Consultants Co. Ltd. (OCCL), the project’s engineering consultants. The consultants and the project office repeatedly refused to make payments, citing various issues.
According to the contract, disputes were to be addressed by the Disputes Tribunal within 28 days, a process CHEC did not follow, leading to further delays and disputes. Although a committee appointed in 2014 recommended payment to CHEC, this recommendation was not acted upon. In 2023, a new committee proposed settling the claims based on the earlier committee’s findings.
The Cabinet, under President Ranil Wickremesinghe, approved the payment on August 27, 2024, after receiving legal advice from the Attorney General. Despite CHEC’s non-compliance with standard dispute resolution procedures, this decision is expected to conclude the prolonged financial disagreement and ensure that CHEC receives the payment owed for its work on the Southern Expressway.
