The government is considering terminating the current contract for constructing the Kadawatha–Mirigama stretch of the Central Expressway.
If terminated, the project company may receive over US $40 million as compensation.
Authorities plan to renegotiate a new deal under revised terms for the same stretch.
The current loan agreement with China EXIM Bank amounts to US $989 million, covering 85% of the contract price.
The construction cost of the Kadawatha–Mirigama phase has more than doubled since the agreement was first signed in 2015.
Despite agreements in 2015 and 2016, successive governments failed to commence the project for nearly a decade.
Deputy Minister Dr. Prasanna Gunasena said the final decision on project termination will be made within two weeks.
He confirmed that the expressway segment would definitely be built, possibly under a new project arrangement.
Metallurgical Corporation of China (Ltd) was initially awarded the construction contract.
The Mirigama–Kurunegala stretch of the expressway (Phase 2) has been completed and is operational, while the Kurunegala–Kandy phase is currently under construction.
