India has signed an $82.64m contract agreement to deliver 160 passenger coaches to Sri Lanka Railways under a concessional financing arrangement.

The agreement was signed by India’s state-owned engineering consultancy company RITES and the Government of Sri Lanka’s Ministry of Transport and Civil Aviation.

In June 2017, the EXIM Bank of India and the Government of Sri Lanka signed a $318m line of credit (LoC) agreement for the supply of railway rolling stock, as well as modernisation of rail tracks.

The supply of 160 passenger coaches is part of the LoC.

All coaches being supplied will be customised to meet requirements of Sri Lanka Railways.

“The new passenger coaches will be used to serve the growing demand of railway services due to increase in road congestion.”

A Sri Lankan Ministry of Transport official stated that the new passenger coaches will be used to serve the growing demand of railway services due to increase in road congestion, as well as supporting tourism, reported dailynews.lk.

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The new coaches will also enable the state railways to retire the older units, the official added.

Alongside the passenger coaches, India is set to supply six DMUs, ten locomotives, 20 container carrier wagons and 30 fuel tank wagons to Sri Lanka.

The DMUs and locomotives will be delivered by RITES, while Texmaco Rail & Engineering is responsible for supplying the wagons.

Overall, India is estimated to have completed nearly $1bn of projects under concessional financing in the Sri Lankan railway sector.

Delivery of passenger coaches is a part of this continued collaboration.