Srei may pull out of Colombo metro project

Srei Infrastructure Finance (SIFL) may pull out of the proposed 23-km metro rail project in Colombo due to the political unrest in the island nation.

The Kolkata-based infrastructure finance company was leading the consortium appointed by the Sri Lankan government for developing the $1.6-2 billion mass rapid transport system.

“We were very keen on the project, but the political situation in the country has worsened in the last few months making it unviable to continue. Last month, we had sent a team for project-related work, but they had to return within 24 hours as there was curfew and unrest all around. We have not yet decided, but we are seriously thinking on those lines (pull-out),” said SIFL Vice-chairman and Managing Director Hemant Kanoria.

In August 2007, SIFL along with Land Transport Authority of Singapore was appointed by the Sri Lankan government to carry out a feasibility study on the project and in late last year it was awarded the project.

Subsequently, Srei formed a consortium that included Land Transport Authority of Singapore and a Bangalore-based firm. The cost of feasibility study was estimated at $5 million.

“This is a part of our diversification plan into mass rapid transport system, where we are keen on providing advisory services and implementing core projects,” said a company executive.

The company is advising the Mauritius government on similar projects. “We are largely doing the project advisory related work there in tandem with the Mauritius government,” he added. In addition, in February, the company had entered into an agreement with the West Bengal government for developing country’s first elevated light rail transit system in the state.

Srei would lead the consortium which includes Czech firm Amex International as the technology partner and the state government’s West Bengal Transport Infrastructure Development, to develop Rs 6,000 crore, 40-km long light rail transit system (LRTS) project. The project is expected to be completed in five years.