Korean Government approved USD 200 million for Kandy Tunnel

The Ministry of Strategy and Finance of Korea approved USD 200 million for Kandy tunnel construction project.


The project comprises of 4 tunnels with a total length of 5.5km from Suduhumpola to Tennekumbura via Bogambara and Ampitiya which will be the longest tunnel in Sri Lanka. Korea Exim Bank will finance this project with a concessional EDCF loan of 0.15% interest rate and 40 year repayment period including 10 year grace period. The project executing agency will be the Ministry of Highways and Higher Education of Sri Lanka whereas the project implementing unit will be the Road Development Authority (RDA).


The main objective of the project is to ease the traffic congestion at centre of Kandy by constructing by-pass tunnels for many vehicles wanting to go to the West or the East of Kandy without entering Kandy lake road. After established, the tunnel is expected to reduce the passing time from Suduhumpola to Tennekumbura from 2 hours to less than 30 minutes during rush hours. Therefore, the Kandy tunnel will save colossal sum of money due to extra fuel combustion and increased air pollution near the Sri Dalada Maligawa (Temple of the Sacred Tooth Relic). In addition, the tunnel may boost the economy of Kandy by providing a short connection between the Kandy industrial zone and the road (A1) to Colombo where container terminals for export are located.


The Kandy tunnel construction project does not have only economic meaning but also diplomatic meaning. Korean government’s decision to finance USD 200 million for this project comes at a significant time as this year 2017 marks the 40th anniversary of diplomatic relations between Sri Lanka and the Republic of Korea.