The long-delayed Central Expressway Project (CEP) – held up by stalled funding from the Exim Bank of China, land acquisition setbacks, and compensation disputes that sparked public dissatisfaction and legal challenges – is set to resume in two months, Road Development Authority (RDA) officials said.
China Exim Bank’s re-engagement with the CEP now appears linked to broader diplomatic and economic negotiations, such as President Anura Kumara Dissanayake’s January 2025 State visit to Beijing, where infrastructure financing was again put on the table.
Deputy Minister of Transport and Highways Dr. Prasanna Gunasena last week said that work on the first phase of the CEP – from Kadawatha to Mirigama – would restart pending final approval from the Chinese lender for the release of the funds. Deputy Minister Dr. Gunasena said the breakthrough followed fruitful discussions held during President Dissanayake’s State visit to China from January 14 to 17 this year, at the invitation of Chinese President Xi Jinping.
During high-level talks, President Dissanayake raised the importance of completing the incomplete sections of the CEP and expressed his appreciation of China’s continued support, particularly for Sri Lanka’s debt restructuring process.
“The President highlighted that the timely completion of these infrastructure projects is vital to improving regional connectivity and accelerating economic development,” Dr. Gunasena said. “The Ministry has taken all steps to clear the remaining bottlenecks. Once the Exim Bank of China grants the final nod, construction activities will commence without further delay”, he said.
Plans to resume construction work on Phase One
The Government is planning to resume construction work on Phase One (Kadawatha to Mirigama), focusing on the first section of Phase One, which was initially stalled due to these challenges.
The goal is to move forward with the construction work of this critical part of the CEP, which is expected to enhance connectivity between Colombo and the central regions of Sri Lanka. Right now, only the 40-Km Meerigama-Kurunegala section is active.
Once the first section is completed, it will help alleviate traffic congestion and reduce travel time significantly, connecting Colombo (Kottawa and Kadawatha) with the upcoming phases of the project as they progress. RDA officials added that compensation payments to landowners are being fast-tracked and administrative measures are being taken to resolve any remaining disputes, paving the way for a smooth recommencement of construction.
Construction cost has more than doubled
The cost of constructing the first phase of the CEP — from Kadawatha to Mirigama—has more than doubled since the initial agreement was signed in 2015, according to Dr. Gunasena.
The project’s estimated cost had surged from Rs.158 billion to Rs.350 billion, due to multiple delays, contractor compensation claims, and the sharp depreciation of the Sri Lankan Rupee (LKR) against the US dollar (USD).
There has also been encroachment and unauthorised activities in areas previously cleared for construction. The Government has now earmarked Rs.7 billion to repair the damaged infrastructure.
With costs continuing to climb, the Government has now placed the CEP at the top of its infrastructure priorities. Construction work on the Pothuhera–Rambukkana section is currently under way, while land acquisition for the next stretch up to Galagedara in Kandy has been completed.
The CEP comprises four main segments, including the Kurunegala–Dambulla stretch. Dr. Gunasena said that no new Expressways will be constructed until this is completed.
The CEP, stretching from Kadawatha to Dambulla, with a link Expressway from Pothuhera to Galagedara, has been divided into four sections: Section 1: Kadawatha to Mirigama (approx 37.0 km); Section 2: Mirigama to Kurunegala (approx 39.7 km) and Meerigama to Ambepussa (approx 9.1 km); Section 3: Pothuhera to Galagedara (32.5 km); Section 4: Kurunegala to Dambulla (approx 60.3 km).
The alignment of the expressway primarily traverses privately owned lands, with a few exceptions of Government-owned lands and institutions. The Expressway will be constructed as elevated structures using viaducts, bridges, culverts and earth fill embankments. Standard road construction techniques will be employed, with heavy earthmoving machinery and equipment used for most of the work.
Traffic congestion on key routes eased
The total project cost for the CEP is estimated to be around Rs. 445.30 billion. The combined cost for Sections 1, 2, and 4 is expected to be approximately Rs. 350.64 billion.
The first phase of the Central Expressway commences at the interchange with the Outer Circular Highway (OCH) and the trace passes over mainly paddy and uncultivated lands. After Gampaha, the CEP runs mostly parallel to the main railway line.
The CEP is the main component of the Government’s transport infrastructure strategy, designed to support long-term economic growth. With construction work resuming, officials said that the project will provide a much-needed boost to the construction sector, creating employment opportunities and stimulating local economies along the route.
A section of the Phase I, a 25.8-kilometre stretch between Kadawatha and Kirillawala, has been almost completed and another section between Kirillawala and Mirigama, has been partially completed.
Under phase 4, the 40-kilometre stretch from Kurunegala to Dambulla is also under construction. Once completed, this section will further connect the Central and Northern regions, facilitating smoother travel towards Dambulla, a key economic hub, and beyond.
Prolonged standstill
When construction work on the CEP, particularly the first phase between Kadawatha and Mirigama, stopped in 2020 -2021 due to Chinese lender’s funding delay, the contractors were unable to proceed without financial clearance, leading to a prolonged standstill.
The Covid-19 pandemic was another factor that hampered construction work as the country faced lockdowns. The delay signalled instability in project financing and coordination, which dampened investor sentiment not just for this Expressway, but for other infrastructure initiatives reliant on foreign funding.
The Exim Bank of China did not officially stop funding the CEP altogether,but rather, delays and hold-ups in disbursement of the promised funds created a de facto freeze on progress during the country’s economic downturn in 2022.
The Bank reportedly withheld or delayed further disbursements due to Sri Lanka’s deteriorating creditworthiness, growing sovereign debt burden, and the need for broader debt restructuring with international creditors. The latter process has now been agreed upon with China, the Paris Club and India.
Delays were costly
RDA officials said that the delays in funding the CEP resulted in increased project costs due to inflation, revised contractor rates, and the need for re-mobilisation of machinery and manpower. Work on the project will be resumed soon, they said.
With construction work on hold, landowners who had given up land for the project faced uncertainty. Officials of the Ministry of Highways also said that the prolonged delays in restarting work could push up costs even further, making immediate recommencement essential to limit the fiscal impact.
Once completed, the CEP will seamlessly connect with the OCH, Airport Expressway and the Southern Expressway. The Ruwanpura Expressway linking Gelanigama and Ratnapura has been put on hold until the CEP is completed and more funding is available.
The Government is also keen to promote improved public transport options such as railways and buses to discourage motorists from using their cars for every journey. It plans to bring low-floor electric buses for the SLTB to offer a comfortable ride for passengers.
