Announcement of IDA Assists Rural Development Project in Sri Lanka on December 11, 1980

FOR fMMEDIA TE RELEASE . World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 81/21 December 11, 1980 IDA ASSISTS RURAL DEVELOPMENT PROJECT IN SRI LANKA The International Development Association (IDA), an affiliate of the World Bank, today announced the approval of a credit of SOR 25.6 mill ion ($33.5 million) for a second rural development project in Sri Lanka. The $50.01 million project will assist in the development of the districts of Puttalam and Matale by raising productivity, employment, incomes and 1 iving standards. These districts were chosen because of their high percen- tage of rural population and low per capita income. The main thrust of the • project wil 1 be to help improve the production of paddy and coconut and pro- vide the support services essential for increased production. The project would help Sri Lanka in raising incomes, employment and 1 iving standards of_some 130,000 farm families in the two districts. At full development annual paddy production is expected to increase by about 27,000 metric tons, or by 133% over present levels. Annual coconut production is ex- pected to increase by 26 mil 1 ion nuts. The project should help increase exports of coconut products. The project follows the model developed for the Kurune- gala Rural Development Project being assisted by an !DA credit of $~0 million approved in 1979. The IDA credit to Sri Lanka is for 50 years, including 10 years of grace. It is interest free, except for a service charge of 3/4 of 1% to meet IDA's administrative costs. • I NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of negotiation of the credit. FOAM NO. 1121 (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Second Rural Development Sri Lanka $50.01 million • !DA FINANCING: SDR 25.6 mi 11 ion ($33.5 million) standard IDA terms OTHER FINANCING: Government of Sri Lanka, People's Bank, Bank of Ceylon and participating farmers IMPLEMENTING ORGANIZATION: Secretary Ministry of Plan Implementation Colombo, Sri Lanka. Telex: 21232 FORAID CE PROJECT DESCRIPTION: The main components are: (a) Irrigation and water management in both districts; (b) coconut development in Puttalam; (c) minor export crops development in Matale; (d) agriculture credit in both districts; agricultural input supplies in both districts; (f) forestry in both districts; (g) fisheries in Puttalam; (h) sericulture in Matale; (i) livestock in both districts-; (j) groundwater exploration in Puttalam; (k) rural roads in both districts; (1) rural water supply in both districts; (m) rural electrification in both districts;. (n) health in both districts; (o) education and vocational training in both districts; (p) project coordination and investigations in both districts. PROCUREMENT: Equipment, vehicles and spares with an estimated c. i .f. cost of about $2.5 mill ion will be procured on the basis of international competitive bidding (ICB). A preference 1 imited to 15% of the c. i .f. price of imported goods or the import duty, whichever is lower; wi 11 be extended to local manufacturers in the evaluation of bids. Most civi 1 works ($10.5 mil lion) wi 11 be labor- intensive, relatively small, seasonal and scattered over a wide area, hence it will not be practical to group them into contracts suitable for ICB. CONSULTANTS: The project includes 49 man-years of senior and 42 man- years of assistant level consultants for the Irrigation Department; 25 man-years of supervising consultants for rural development; and 18 months of short-term expatriate consultants for minor export crops and six man-months for monitoring approved in 1979. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 17% 1986 - 0 - •