The Chinese Government through its Export-Import (Exim) Bank of China has approved a loan of $278.2m on concessional terms for the construction of Phase I of Matara-Kataragama Rail Track Project in Sri Lanka.
Construction of the 26.75km long single line broad gauge rail track from Matara to Beliatta under the first phase has already started.
The first phase of the project includes construction of bridges across several rivers, culverts, flyovers, cross roads, access roads, four railway stations and quarters for railway staff.
China is expected to finance the 114.5km Matara-Kataragama railway line extension project in three stages which is estimated to cost $366m and the remainder of the cost will come from the Sri Lankan Government.
The second phase of the project includes a 48km track from Beliatta to Hambantota which is scheduled to be complete by the end of 2012, while the third phase will involve construction of the 39.5km segment from Hambantota to Kataragama.
All three phases of the Matara-Kataragama Rail Track Project is scheduled to be completed by 2015.
According to the Sri Lankan Government, the new railway will provide an efficient and environmentally friendly mode of transport to help with the increasing demand for transport due to developments in the Southern region such as the operation of a new port and airport in Hambantota.
The Matara-Kataragama Railway Extension Project is a component of the Sri Lankan Government's development plan for the South, which seeks to improve access to the South and in doing so generate economic activity and development.