Sri Lanka: What happened to the US $500 million, Opposition asks

Tuesday, 13 November 2007

The question of what happened to the money that was flowed into the country through the much hyped recent high interest dollar bond issue has become the talk of the town here in Colombo. Denying the opposition allegations that money was not spared for any of the specified development projects, the Deputy Minister of Finance Ranjith Siyambalapitiya said that it was utilized to settle the Treasury bills that were obtained to invest money for 17 projects. He said that settling these Treasury bills issued for 15 to 18% high interest rates was a boost to the economy.

Opposition United National Party (UNP) MP Lakshman Senevirathna yesterday accused that the government had not spent even a cent for infrastructure development from the US $ 500 million credit obtained at a high interest through HSBC. Of the Rs. 56 billion loan, the government spent Rs. 20 billion to settle a Central Bank overdraft, Rs. 13 billion to settle a loan of Bank of Ceylon and another Rs. 22 billion to settle a loan of People’s Bank, the MP said.

Mere Rs. 10 billion is spared and it will go for the expenses of the President, charged MP Senevirathna. A well-known economic analyst Dr. Harsha de Silva also stated recently to media that the government would not be able to invest money from the loan to development projects after settling the existing loans.

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