India has approved a US $318 million loan for Sri Lanka Railways to upgrade its communication system Featured

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Sri Lanka Railway - Historical Demodara Bridge Sri Lanka Railway - Historical Demodara Bridge

The loan has been taken by Sri Lanka to improve its railway communication and signal system.

India has approved a US $318 million loan for Sri Lanka Railways to upgrade its communication system and rolling stock in the north of Sri Lanka.

Sri Lankan government spokesman and minister Gayantha Karunathilake said that the money will be used to improve the railway signal system from Maho to Anuradhapura in the north central province and from Anuradhapura to Omanthai in the north.

It will also be used to buy six power sets with air-conditioned carriages, 10 engines and 160 carriages, 30 wagons with oil tanks and 20 container carrying wagons.

The Cabinet had approved a proposal by Prime Minister Ranil Wickremesinghe to enter into an agreement with Exim Bank of India for the loan. India has already given loans of about US $996 million to develop Sri Lanka's railway service which were used to improve northern and southern railway lines and buy engines and power sets.

History of Sri Lanka Railway

Rail was introduced in Sri Lanka in 1864 to transport coffee from plantations in the hill country district of Kandy to the port city of Colombo on its way to Europe and the world market. The coffee blight of 1871 destroyed many a fine plantation and tea replaced coffee. With the development of tea plantations in the 1880s, the joint stock companies swallowed up the former individual proprietorship of the coffee era. Under corporate ownership and management control by companies, the process of production of tea became more sophisticated and needed more and more railways built to the Kandyan highlands. To send tea to Colombo and to transport labour, machinery, manure, rice and foodstuff, etc to Kandy, another 100 miles of railways were constructed in the tea planting districts to serve the expanding tea domain.

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