Sri Lanka Railways will get a loan of USD 318 million or approximately Rs 2,130 crore from India to upgrade its communications system and rolling stock in the Tamil-dominated north.
Sri Lankan government spokesman and minister Gayantha Karunathilake said that the money will be used to improve the signal system from Maho to Anuradhapura in the north central province and from Anuradhapura to Omanthai in the north.
The loan will be provided by the Exim Bank (Export Import Bank of India) which will also be used to buy six power sets with air-conditioned carriages, 10 engines and 160 carriages, 30 wagons with oil tanks and 20 container carrying wagons.
The Cabinet had approved a proposal by Prime Minister Ranil Wickremesinghe to enter into an agreement with Exim Bank of India for the loan.
India has already given loans of about USD 996 million (Rs 6,673 crore) to develop Sri Lanka's railway service which were used to improve northern and southern railway lines and buy engines and power sets.