LIBOR- srilanka-IRKON

An agreement for supply and installation of an $86.5-million signalling and telecommunication system for railway network in Northern Province of Sri Lanka was signed between IRCON and Sri Lanka Railways.

Line of credit

This project is a part of Indian Line of Credit of $800-million, which has been extended by India at concessional terms.

•  The credit line has been extended at an interest rate of LIBOR plus 0.5 per cent with LIBOR capped at 3 per cent.
• The repayment period is 20 years with a five year moratorium.

• The proposed contract will cover the Anuradhapura ( – Kankasanthurai( near jafna)       and Medawachchiya – Tallai Mannar sections, covering a route length of 341 km and 28 stations.
• 
• The signalling work involves provision of centralized control panel, interlocking colour light system with electrically operated points and track detection system. All the level crossings will be interlocked with new signalling system, which would ensure safety at level crossings. The telecommunication work involves provision of optical fiber communication system throughout the section. In addition, public address system, etc., shall also be provided at major stations.

In his remarks after the signing ceremony, Indian High Commissioner to Sri Lanka Ashok K. Kantha said that the proposed telecommunication system offered by IRCON is based on proven technology and maintainability. He noted that work is already in progress for track- laying work on the Medawachchiya – Madhu Road, Madhu Road - Tallaimannar and Omanthai – Pallai Sections. He added that IRCON is receiving full support of the Government of Sri Lanka and the projects would be completed as per schedule.

Mr.Kantha said the work on Kalutara – Galle Section is scheduled to commence from September, 2011 and the same will be completed by March, 2012. The southern coastal railway line project is also being funded under Government of India credit line of $ 167.4 million.

Kumara Welgama, Sri Lankan Minister of Transport noted the deep bond of friendship between the two countries and expressed his deep appreciation for assistance provided by the Government of India.

The Libor is the average interest rate that leading banks in London charge when lending to other banks.

•  It is an acronym for London Interbank Offered Rate (LIBOR).
•  Banks borrow money for one day, one month, two months, six months, one year, etc.,
• and they pay interest to their lenders based on certain rates.
• The Libor figure is an average of these rates.
• Many financial institutions, mortgage lenders and credit card agencies track the rate, which is produced daily at 11 a.m.
•  to fix their own interest rates which are typically higher than the Libor rate.
• As such, it is a benchmark for finance all around the world