Document of The World Bank FILE CLOP'y FOR OFFICIAL USE ONLY Report No. 4089a-CE STAFF APPRAISAL REPORT SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (FORESTRY I) December 15, 1982 South Asia Projects Department General Agriculture Division This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS US$ 1 = Rs 21 Rs 1 = US $0.0476 FISCAL YEAR 1 January - 31 December WEIGHTS AND MEASURES 1 kilometer (km) = 0.62 miles 1 meter (m) = 1.09 yards 1 hectare (ha) = 10,000 m2 (0.01 km2) = 2.471 acres 1 cubic meter (m3) = 35.315 cu ft 1 kilogram (kg) = 2.2 pounds 1 metric ton (t) = 1,000 kg = 2,205 pounds ABBREVIATIONS ADB - Asian Development Bank BSc - Bachelor of Science FAO - Food and Agriculture Organization of the United Nations FINNIDA - Finland's Department for International Cooperation - Ministry of Foreign Affairs GOSL - Government of Sri Lanka IDA - International Development Association MSc - Master of Science NORAD - Norwegian Agency for International Development SIDA - Swedish International Development Agency UNDP - United Nations Development Programme USAID - United States Agency for International Development FOR OFFICIAL USE ONLY SRI LANKA FORESTRY I - FOPCEST RESOURCES DEVELOPMENT PROJECT Table of Contents Page No. I. INTRODUCTION ................... . 1 II. FORESTRY IN SRI LANKA .........s..... *.* .... .......... 2 A. Forest Resources ...................... 2 B. Contribution to the Economy... .................... 3 C. Forestry Institutionstit.i. .n... .................... 3 D. Forest Operations. ................... 6 Wood extraction . ...................-. 6 Plantation Program.. 7 Planting Techniquescs.. ... 7 Forest Management and Silvicultural Practices..... 8 Research . ...... . 8 E. Wood Supply and Demand.e...*.* ...................... 9 General ............... . 9 Industrial Wood ........... ..... . ... . .... . 9 Firewood.... ............. 10 F. The Forest Industry ............................ .0 12 G. Forestry Training ................... 13 H. Government Plans and Pol i. ...... 14 I. External Assistance to Forestry. 14 J. Constraints to Development .......................... 16 III. THE PROJECT AREA . ................ ...... . 16 A. - General ............ , .... .. ... ... .. , .. 16 B. Climate............. 17 C. SoLls, Land Use, Population and Infrastructure...... 17 This report is based on the findings of an appraisal mission to Sri Lanka in April-May 1982. Mission members included: Harald Stier (Economist and Mission Leader, IDA), Orhan Baykal (Forest Specialist, IDA), Derek K. Paul (Forester, FAO/Bank Cooperative Programme) and' Andre Lafond (Forest Education Specialist, Consultant). This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -2- IV. THE PROJECT ............... . ..... ................. 18 A. Objectives and Main Features . ..18 B. Detailed Description ......... .. ............... 19 Master Plan. 19 Aims and Strategy ............ . 19 Strengthening of Planning . .20 Institutional Development Study. 20 Forest Inventoryv en... ......... 0................. 21 Preparation of Forest Management Plans. 21 Assessment of Non-forest Wood Resources. . 21 Wood Market and Demand Stddy 21 Forest Industry Study.. 22 Wood Utilization Studt. 22 Logging and Transportation Study .22 Analytical Cost Accounting System 22 Forestry Data Bank. . . . . . . ... ... .. ...... 23 Forestry Training ..23 Professional Training. 23 Forest Guard Training 24 Plantations ..... 25 Plantation Establishme t. .25 Management of Teak Plantations . .27 Silvicultural Treatment of Young Stands......... 27 Harvesting and Replanting of Over-mature Stands. 28 Species and Provenance Trialsr...... 28 Land Clearance and Ground Preparation Trials.... 29 Forest Protection ........... 29 Socio-Economic Study .30 Soil and Site Survey. ........................... 30 C. Implementation Schedule ... 31 D. Project Costt.. 32 E. Financing . . 33 F. Procurement 34........ ........................ . 34 G. Disbursements . . .34 H. Accounts and Auditsu d i ts....... 35 V. ORGANIZATION AND MANAGEMENT ... 36 A. Project Implementation . ..........................., 36 B. Staffing ....... 38 C. Consultancy Services . .................. 39 D. Training .......................... . 39 E. Monitoring and Evaluation ...... . 40 -3- VI. PRODUCTION, MARKETS AND PRICES .......................... 41 A. Yields and Production . .. ... ...... .. . 41 B. Markets ................................... ....................... 42 C. Prices .............................................. 43 D. Impact on Government Budget ......................... 43 VII. BENEFITS AND JUSTIFICATION .............................. 44 A. Project Benefits ... ....... .... .................................... . 44 B. Economic Analysis .............. .. ....... . 45 VIII. RECOMMENDATIONS .................. ............ ....... . 48 LIST OF ANNEXES ANNEX 1 - BACKGROUND DATA Table 1 - Average Monthly Rainfall for Selected Sites in Sri Lanka .......................................... 50 ANNEX 2 - COST ESTIMATES - PLANNING Table 1 - Master Plan - Capital Cost ........................... 51 Table 2 - Technical Assistance Cost ............................ 52 Table 3 - Planning Unit - Local Staff Cost ................... 0. 53 Table 4 - Forest Inventory - Local Staff and Labor Cost ........ 54 Table 5 - Master Plan - Operating and Maintenance Cost ......... 55 Table 6 - Total Planhing Cost .................. ............... 56 ANNEX 3 - COST ESTIMATES - TRAINING Table 1 - Professional Training - Total Cost .............. ..... 57 Table 2 - China Bay Forestry College Expansion and Rehabilitation ............. ..... * .... 58 ANNEX 4 - COST ESTIMATES - INDUSTRIAL PLANTATIONS. Table I - Capital Cost -Eastern Area .......... .............. 59 Table 2 - Capital Cost - Southern Area ....................... 60 Table 3 - Technical Assistance Cost .......... ............... 61 Table 4 - Staff Cost - Eastern Area ........................... 62 Table 5 - Staff Cost - Southern Area ..............f.....h...rn.A e 63 Table 6 - Staff Cost - Total Industrial Plantations ........... 64 Table 7 - Operating Cost .......................... .......................... . 65 Table 8 - Nursery Model ................................... . 66 -4- Table 9 - Plantation Establishment - Unit Cost ................ 67 Table 10 - Plantation Establishment - First Year Cost .......... 68 Table 11 - Industrial Plantations - Annual Maintenance Cost .... 69 Table 12 - Plantation Establishment - Direct Cost Summary ...... 70 Table 13 - Total Industrial Plantation Cost .................... 71 ANNEX 5 - COST - ESTIMATES PLANTATION MANAGEMENT Table I- Management of Teak Plantations ................. 72 Table 2 - Silvicultural Treatment of Young Stands .............. 73 Table 3 - Reforestation of Mature Plantations.................. 74 Table 4- Total Plantation Management Cost ................ .. 75 ANNEX 6 - COST ESTIMATES - PLANTATION TRIALS AND RESEARCH Table 1 - Plantation Research and Trials - Capital Cost........ 76 Table 2 - Plantation Research and Trials - Staff Cost.......... 77 Table 3- Mechanized Trials -Unit Cost . . 78 Table 4 - Plantation Research and Trials - Direct Cost ......... 79 Table 5 - Plantation Research and Trials - Total Cost ...... 80 ANNEX 7 - SUMMARY PROJECT COSTS Table I - Total Project Cost (in Rs '000) ........... ............ 81 Table 2 - Total Project Cost (in US $ '000) . ... .- 82 Table 3 - Total Project Cost by Nature (in Rs '000) .......... 83 Table 4 - Total Project Cost by Nature (US $ '000) . . . 84 ANNEX 8. DISBURSEMENT SCHEDULES AND FINANCING Table I - Disbursement Schedule ........-............ ....... 85 Table 2 - Project Cost Items and Disbursements ................ 86 ANNEX 9 - PLANTATION SUPPORTING TABLES Table 1 - Foreign-assisted Forest Plantation Projects .......... 87 Table 2 - Area Planted Under Project by Species and Method of Plantation.. ........... o ........ .. . 88 Table 3 - Yield Assumptions for Plantations ... . 89 ANNEX 10 - COSTS, PRICES AND CONVERSION FACTORS USED Table 1 - Forest Department Major Staff Categories and Salaries ................ ... ... ....... ..... 90 Table 2 - Vehicles and Equipment - Operating and Mantenance Cost. . . ............. ............... . 91 Table 3 - Timber Corporation Sales Prices, 1981s................ 92 Table 4 - Assumptions Used for Calculations of Stumpage Value.. 93 -5- Table 5 - Calculation of Financial and Economic Stumpage Values for Teak ...................... . .. ....... . 94 Table 6 - Calculation of Financial and Economic Stumpage Values for Eucalyptus ................. . . ....... . 95 Table 7 - Calculation of Economic Stumpage Value for Telepoles, Construction Poles and Firewood......... 96 Table 8 - Financial Prices, Economic Prices and Conversion Factors ....... ..... ..... ..... ...... 97 ANNEX 11 - FINANCIAL ANALYSIS OF BUDGET IMPACT Table 1 - Calculation of Proiect Revenues from Harvesting and Mature Stands. ................................. 98 Table 2 - Calculation of Project Revenues from Thinnings...... 99 Table 3 - Calculation of Total Project Revenues................ 100 ANNEX 12 - ECONOMIC ANALYSIS Table - Economic Cost and Benefit S e treams 101 Chart 1 - Discount Rateate........... ... 102 Chart 2 -Percentage Shortfall in Benefits.................... 103 CHARTS World Bank 24092 - Forest Department Organizational Chart World Bank 24241 - Indicative Time Schedule for Consultants and Major Studies MAP World Bank 16518 - Sri Lanka LIST OF TABLES IN MAIN TEXT 2.1 - Forestry Sector Institutions . . 4 2.2 - Forest Department Plantation Pra ogram 7 2.3 - Industrial Wood Consumption, 1 9 8 0 10 4.1 - Project Plantation Program . .25 4.2 - Summary of Project Cost. ........ *. s .........so..... 32 4.3 - Inflation Rata................ e... 33 4.4 - Proposed Financing Plan............ . e. . ...... ........ 33 6.1 - Project Impact on Government Budget ...... ..... ............ 43 7.1 - Economic Rate of Return. ....... ........ 45 7.2 - Sensitivity Analysisn a ly........ ...... . .... 47 I SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (FORESTRY I) I. INTRODUCTION 1.01 In 1979, at the request of the Government, the Bank carried out a Forestry Sector Review in Sri Lanka. The report 1/ identified as the main constraints to development, a lack of reliable, basic data, an absence of basic planning capacity and a severe shortage of trained personnel. In the light of these findings, a first step project was proposed, consisting of: (a) the preparation of a Forestry Master Plan; (b) professional forester training; (c) the expansion of technical training facilities; and (d) the establishment of plantations to meet industrial wood requirements. 1.02 The government of Sri Lanka obtained UNDP assistance for the prepara- tion of a project along the lines proposed in the Sector Review. Swedforest Consulting AB was selected for the preparation of the Master Plan and Industrial Plantations components of the project and their final report was submitted in April 1981. The Government itself undertook to prepare the proposals for the training-component. For professional training, a committee consisting of representatives of the University of Sri Jayawardenepura and the Forest Department was formed, and for the training of forest rangers and guards, the Forest Department prepared a program. The first Government reports were dated February 1981. These were revised on the basis of IDA comments and were presented to the appraisal mission upon arrival in Sri Lanka. 1.03 Due to the strained budget situation in Sri Lanka, necessitating the postponement of new public investments, the appraisal was delayed by about one year. The project was appraised during April-May 1982 by a team consist- ing of Messrs. Harald Stier (Economist and mission leader, IDA), Orhan Baykal (Forest Specialist, IDA), Derek K. Paul (Forester, FAO/Bank Cooperative Program) and Andre Lafond (Forest Education Specialist, consultant). During appraisal, the mission found that the country had sizeable forest plantations with overmature trees and that the management of existing plantations was 1/ Report No. 2672-CE, Sri Lanka Forestry Sector Review, Sept. 8, 1980. -2- severely neglected. Sound economics, therefore, dictated that priority be given to the harvesting of mature stands where environmentally defensible and to the better management of existing plantations before additional resources were allocated for new plantations. With the main constraining factor being the severe shortage of staff trained in forestry at all levels in the Forest Department and in the country and their previous commitment to other foreign-financed forest plantation schemes, the mission reduced the planta- tion component in the preparation report by some 60% and instead introduced into the project, schemes for the upgrading of existing plantations and for the harvesting and replanting of mature stands. Because of the above-mentioned budgetary constraint, project activities in 1983 had to be kept below a ceiling of Rs 5 M. 1.04 As this is the first IDA appraisal of a forestry project in Sri Lanka, Chapter II of this report contains a somewhat detailed sub-sectoral description. Further information is available in the project file. II. FORESTRY IN SRI LANKA A. Forest Resources 2.01 The availability of data on forest and land resources in Sri Lanka is scarce, out-of-date and highly unreliable. The most recent forest inventory in Sri Lanka dates from 1960 and shows the situation in 1956, when the aerial photographs on which the inventory is based were taken. At that time, a total of 2.9 M ha (44%) out of the country's total land area of 6.6 M ha were under closed forest cover. The forest cover in the Wet Zone was about 0.25 M ha (17%), the Intermediate Zone 0.14 M ha (16%), and the Dry Zone 2.52 M ha (60%). Since then, the area of closed for,,. has been reduced -4hstaratiallY and is now estimated at about 1.6 M ha or about 24% of the total land area. An extrapolation shows that if this rate of deforestation continues, Sri Lanka's forests would be completely depleted in thirty years' time; urgent measures are therefore necessary to arrest this trend. 2.02 For all practical purposes, the forest estate is completely owned by the State. For administrative purposes, these forests are categorized as: (a) "Forest Reserves" and (b) "Other State Forests". There is also an intermediary group of "Proposed Forest Reserves" which are areas pending reservation. The motivation behind the demarcation of "reserves" was to bring such forests under permanent, sustainable management. Other State Forests are not subject to any management and may be released for other land uses. The Forest Department controls, and is responsible for, the management of Forest Reserves and Proposed Forest Reserves. The responsibility for the large, though scattered, Other State Forests is shared between the Forest Department and the Government Agent (the highest civil servant at the dis- trict level). In theory, all Other State Forests over 200 ha in the Dry Zone -3- and over 40 ha in the Wet Zone fall under the Forest Department and the remainder under the Government Agent. B. Contribution to the Economy 2.03 The share of value added by forestry in Sri Lanka's Gross Domestic Product is estimated to be only about 1.5%, equivalent to Rs 1.2 B in 1981. These figures tend to underrepresent the importance of the forestry sector since they do not reflect its major role in providing cheap energy in the form of firewood, particularly to the rural populations and the urban poor. It has been estimated that firewood consumption in Sri Lanka is about 6 M m3 per annum, or about 0.4 m3 per capita. This represents over 60% of the total national energy consumption. About 70% of the firewood is consumed by the rural populations who rely entirely on traditional fuels for cooking and heating and who are still able to collect most of their firewood requirements locally. The bulk of the remaining 30% of the firewood is used by low income urban dwellers and by the large number of tea factories. The forests are also an essential part of the protection of the environment in Sri Lanka, particularly in the Wet Zone which is characterized by heavy rainfall, high elevation and steep slopes. Practically all the rivers rise in the upper watershed of this region and nourish irrigated agriculture in the lowlands. Moreover, clean and regulated stream flows are essential to the generation of hydroelectric power, on which Sri Lanka is very dependent and for which there is considerable further potential. 2.04 Until recently, Sri Lanka's wood production had been adequate to meet the modest and slow growing domestic demand. However, with the rapid deforestation now taking place in Sri Lanka, concerns for environmental protection and preservation grew increasingly stronger. Lacking a sufficient data base for a selective action based on technical considerations, the Government, in 1977, stopped almost all exploitation of the forests in the rich Wet Zone. As a result, in 1978, demand for industrial wood exceeded domestic supply by over 30,000 m3 roundwood equivalent. The clearfelling of some 30,000 ha of forest under the Mahaweli scheme and the salvage operations of some 12,000 ha cyclone-damaged teak plantations has temporarily increased supplies and brought down wood import requirements to rather negligible quantities, but once these "windfalls" have been worked off, the shortage of industrial wood will be increasingly felt. C. Forestry Institutions 2.05 The main forestry sector institutions and others connected with wood supply are listed in Table 2.1 with the ministries to which they report. -4- Table 2.1: FORESTRY SECTOR INSTITUTIONS Ministry Institution A. Ministry of Lands and Land 1. Forest Department Development 2. State Timber Corporation 3. Land Commissioner - Government Agent (in respect of forests) B. Ministry of Industries and 1. Ceylon Plywood Corporation Scientific Affairs 2. National Paper Corporation C. Ministry of State 1. Department of Wildlife Conservation D. Ministry of Coconut Industries 1. Coconut Plantations (public and private) E. Ministry of Plantation Industries 1. Rubber Plantations (private) F. Janatha Estates Development Board 1. Rubber Plantations (public) G. State Plantation Corporation 1. Rubber Plantations (public) 2.06 The Forest Department is headed by the Conservator of Forests and he has six Deputy Conservators of Forests located at headquarters in Colombo responsible for (a) management, (b) research, education and extension, (c) working plan and inventory, (d) planning and development, (e) special projects and (f) commtLnity forestry (being added). An organizational chart is provided at the encL of the Report. Other professionals at headquarters are: three administraLtive staff, three Assistant Conservators of Forests and three Research Officers. For the field operations, the country is divided into seven forest divisions headed by Divisional Forest Officers and assisted by one or two professionals (18 in total). A division is divided into ran- ges, headed by Range Forest Officers and beats, headed by Beat Forest Officers (forest guards). In total, the Forest Department has 1,045 staff of which 36 are professionals, 51 foresters, 189 range officers and 463 forest guards. The remainder are mainly permanent plantation laborers. 2.07 The main responsibility of the Forest Department is the management and protection of fore!st reserves, including plantations and reforestation and development of forest resources. To do this properly requires informa- tion and data on exist:ing resources, the potential for expansion and the -5- pattern and level of the country's needs. Such information would provide the basis for the formulation of working plans for each reserve according to specific objectives. However, the Forest Department has not gathered this information. Although it is known that substantial changes have taken place in recent years, both with respect to area and management objectives of the forest estate, no forest inventory had been carried out since 1960 until it was initiated, as a result of the Bank's Sector Review, with UNDP finance and FAO assistance in early 1982. Also, the development of the necessary market knowledge has been neglected. 2.08 The only visible activity of the Forest Department is plantation establishment. The considerable real increase in the Forest Department budget has been mainly spent on increased planting, but the post-planting silvicultural treatment, on which the final yields and economic return depend, has been neglected (paras 2.14-2.16). This emphasis on plantings was the result of a combination of lack of data for proper management of the natural forest and of a concentration on easily measured targets, expressed as area planted, at the expense of the less easily identified activities of maintenance and thinning. At the root of all this is the severe shortage of trained staff in the Department in relation to the level of its activities, and this situation has progressively got worse. Available data shows that, while the plantation activity has increased by 128% from 3,200 ha in 1961 to 7,300 ha in 1981, the professional and technical staff of the Forest Department have only been increased by 29% and 22% respectively. If the peak planting level of 12,500 ha in 1980 or planned planting levels of 10-12,000 ha over the next few years is taken for comparison, this relationship is even worse and, of course, deteriorates further progressively as a larger area has to be maintained each year. In addition, the Forest Department has no staff economists or planners and a significant number of professional and technical staff do not have the training required for their positions. The lack of adequate training facilities for professional and technical staff has increasingly become a serious constraint on the efficient operations of the Forest Department. 2.09 The State Timber Corporation. in 1968, the commercial division of the Forest Department was separated and incorporated as the State Timber Corporation. The executive power is vested in its chairman. Once the Forest Department has marked the trees tor felling, the responsibility of the Timber Corporation is to fell, extract, convert and market the wood. The felling and extraction is mainly done by private contractors for the Timber Corpora- tion. The bulk of the wood is sold from Timber Corporation depots to govern- ment organizations and private dealers holding special permits. A grey area in the division of responsibilities between the Forest Department and the Timber Corporation has been the thinning of plantations (para 2.14). The Forest Department's position is that it is the Timber Corporation's task to carry out the thinnings, but the latter, being a profit-oriented organiza- tion, declines this responsibility unless the thinnings are of commercial value. As a result, little thinning has been carried out. -6- 2.10 Other organizations operating in the forestry sector include the Ceylon Plywood Corporation and the National Paper Corporation whose roles are referred to below (para 2.28). The Government Agent in the district, in theory, is responsible for the management of Other State Forest up to 200 ha in the Dry and 40 ha in the Wet Zone. However, in practice, the dividing line tor Forest Department and Government Agents is less clear due to lack of records and demarcation. The control at the central level for these Other State Forests falls under the Land Commissioner in the Ministry of Lands. Some forest reserves have been set aside for wild life management and their management then falls under the Department of Wildlife Conservation under the Ministry of State. In addition, agricultural plantations (i.e. tree crops such as rubber and coconut) under various ministries contribute significantly to total wood supply (almost 20%) and particularly to the supply of industrial wood (about 40%). The many institutions and ministries involved in the management of forests and the supply of wood makes coordination essen- tial, but difficult. At present, each institution pursues its own objectives and little attention is given to the overall effect of their activities. D. Forest Operations Wood Extraction 2.11 The natural forests in Sri Lanka have traditionally been looked upon as an unlimited resource which supplied most of the country's wood require- ments. Until recently, they were exploited through a selection felling system. At present, most wood is supplied through clear fellings under the Mahaweli scheme and through salvage operations of about 12,000 ha teak plan- tations damaged in the 1978 cyclone. The size of operations and, hence, the annual production target is determined by the need for land to be released for agricultural development under the Mahaweli scheme and the progress of the salvage operations rather than by timber demand. In 1981, 85% of Timber Corporation roundwood production came from these sources. The Timber Cor- poration mainly relies on private contractors for the felling, extraction and transport operations. Although they have acquired some experience from clearfelling in the natural forest in the Dry Zone in the last few years, they have little or no experience in the clearfelling of plantations which will gradually have to provide the bulk of the country's wood requirements. The contractors have been slow to adilust their logging techniques and tran- sport systems for efficient clearfelling operations. Important gains in productivity could be made by drawing on experience in other countries through the introduction of modern techniques and equipment. -7- Plantation Program 2.12 The increased awareness of the rapid deforestation in Sri Lanka has recently led to continuously increasing plantation targets until this trend was broken in 1981 when, due to the constrained budgetary situation, only foreign aid assisted projects were allowed to continue. After the 1981 setback, the 1982-86 budget indicates that the Government intends to maintain the plantation establishment at a level of 10-12 thousand ha per year. Table 2.2 shows recent plantation performance by the Forest Department. Table 2.2: FOREST DEPARTMENT PLANTATION PROGRAM (planted area in '000 ha) Yearly Average, Total Existing 1968-72 1973-78 1979 1980 1981 Plantations Dec. 1981 5.8 6.0 8.1 12.5 7.3 145.8 Of the existing plantations, about 63% is teak, 15% eucalyptus and 14% pines and other softwoods. The remaining 8% consist of miscellaneous and unspecified species. About one-half of Sri Lanka's plantations are under ten years old and 30% are under five. On the other hand, statistics indicate that there are mature and overmature plantations with some 4,000 ha eucalyp- tus, often in mixture with Acacia and Cupressus that are over 40 years old. Observations in the field confirmed that harvesting in some plantations is overdue, particularly in the upland Wet Zone. Planting Techniques 2.13 Plantations are established by the Forest Department either by using hired labor or by "chena" (slash and burn) farmers. Mechanical land prepara- tion and plantings are made on a trial basis only by the Timber Corporation. Plantation establishment under the controlled chena system is much cheaper than by using hired labor and is well-established in Sri Lanka as well as in Burma (where it is called taungya). Under this system, land is leased to the chena farmer for three years. The first year he clears it from trees and shrubs before planting it to trees which he' intercultivates with his own agricultural crop. The second year he has to weed the area for the Forest Department and usually gets a catch crop from the area. The third year the farmer again weeds the area, but usually doesn't sow it to any agricultural crop. The farmers usually take on a new piece of land every year which at -8- any time gives them three lots, one each for the first, second and third year of the lease. The Forest Department pays the farmer for his efforts. The amounts are presently being revised and the Government is considering a proposal to pay the farmers Rs 1,250 per ha the first year after successful planting and Rs 250 each of the second and third years for the weeding. This amount would have to be compared to about Rs 5,000 paid for hired labor to carry out corresponding operations. Forest Management and Silvicultural Practices 2.14 Most of the development resources of the forest department, for the last decade or so, have gone into achieving a plantation establishment tar- get, set higher for each year. Neither its financial nor its staff resources were increased commensurately. Mainly as a result of this, but partly also due to an unclear division of responsibilities between the Forest Department and the Timber Corporation (para 2.09), the management of established planta- tions has been neglected and was, in practice, nonexistent during the last ten years. 2.15 Lack of weeding, survival and damage checks and subsequent remedial action has resulted in many young plantations with large gaps, and deformed or otherwise damaged trees. For eucalypts, unless they are given intensive weeding the first two years after plantation, there is no prospect of recovery thereafter. On this account, a substantial part of the over 10,000 ha young eucalyptus plantations, particularly in the Dry Zone, may be written off as having little or no economic value. Most disappointing is that there is no visible improvement in recent Dry Zone plantings under foreign-assisted projects. As for teak, pine and mahogany, the Forest Deparment's records show some 34,000 ha which have been planted between 1975-1980. Although some of these plantations are beyond repair, a judicious salvage program of clean- ing, singling and, for pines, pruning, could be expected to yield high returns and should be given highest priority by the Forest Department. 2.16 Thinning and pruning of somewhat older plantations have also been neglected. The bulk of such plantations is teak. If left without treatment, the final yield will be well below the potential. In addition, the value of the crop will be disproportionately low in relation to its volume because of the small size stems which have a relatively lower price per m3. Many of the teak plantations are degraded due to neglect, cyclone or elephant damage. However, there are large areas of potentially valuable teak plantations which would respond with high returns to an upgrading program, mainly through thinning. Research 2.17 The Forest Department's research program is seriously under-resourced, both in terms of funding and, probably more importantly, in terms of qualified staff. Although the head of the research program is -9- highly qualified, his services are in demand for other tasks because of the lack of professional foresters in Sri Lanka. The research effort is lacking a systematic plan and program. A number of good trials and experiments have been laid out in the field, but many times, for lack of resources, these have not been followed up and, although much data has been collected, it has not been tabulated and analyzed and has been of little practical use. Some research has been done on species selection and provenances, but one of the most widely planted eucalyptus species, E. camaldulensis shows clear indica- tions of suboptimal provenance and has performed so poorly that its use should be discontinued until suitable provenances have been tested. E. Wood Supply and Demand General 2.18 For lack of statistics, any attempt to assess the current wood con- sumption levels and pattern in Sri Lanka can only result in crude estimates. Although several estimates have been made in recent years by various sources (Bank, FAO, USAID, etc.) none has carried out a comprehensive survey, which is long overdue. As a rough indication, total wood consumption is estimated at 6.9 M m3 per annum, 6 M m3 for firewood and the 0.85 M m3 for industrial purposes. 2.19 Although industrial wood and firewood are presently taken from the same natural torests and agricultural plantations (rubber and coconut), planning of future supplies is nonexistent. Firewood can be supplied from any type of forests, including scrub forests, and is usually collected by the consumers themselves. The relatively short rotation period for firewood plantations -- which may be as low as three to five years -- makes it pos- sible at least theoretically, to adjust to any market imbalances fairly quickly. Industrial wood, on the other hand, requires certain log sizes and qualities and needs at least 20 years to mature in plantations. Much longer advance planning is therefore needed in the latter case. Industrial Wood 2.20 The latest figures for industrial roundwood consumption in Sri Lanka is given at 850,000 m3 in 1980 by Swedforest as detailed below in Table 2.3. Of this total, about 135,000 m3 is supplied by the Timber Corporation (25,000 m3 from forest reserves and the remaining 110,000 m3 from the Mahaweli scheme and teak salvage operations), over 300,000 m3 comes from rubber and coconut plantations and the remainder from unidentified private sources and illicit fellings. -10- Table 2.3: INDUSTRIAL WOOD CONSUMPTION, 1980 ('000 m3 roundwood) Destination Quantity Sawmills 700 Pit-sawing 31 Plywood 27 Particle board 10 Parquet 4 Poles and Posts 35 Matches 10 Pulpwood a! 30 Total 847 a/ In the past, the pulp mills have used rice straw and imported pulp. This quantity has been used for testing purposes. 2.21 In addition to domestic production, Sri Lanka has in the past im-3 ported about 10,000 m3 plywood equivalent of tea chests and about 3,000 m of sawnwood annually between 1979 and 1981. At present, however, Sri Lanka is self-sufficient both in sawnwood and in plywood as a result of the combined effect of the deliberate reduction in public investment spendings which has reduced the demand for industrial wood, and the temporary boost in log production from the Mahaweli scheme forest clearings and the salvage operations of cyclone-damaged teak. When the effects from these factors cease being felt by the mid-1980s, imports are likely to resume again to help meet a projected increase in demand of about 3% per annum into the next century, according to FAO's projections. In volume terms, annual industrial demand for roundwood would be about 1.3 M m3 by the year 2000. Of this demand, at best, 8-900,000 m3 could be supplied from domestic sources and large imports would be required. The cost to import 0.5 I m3 of logs represents some US $75 M. A properly established and managed man-made forest is the only long-term answer for adequate and sustained wood supply. Since the cutback in the Forest Department's program to include only foreign-assisted projects, there is no major industrial plantation scheme. The bulk of foreign- assisted plantations are for firewood (Annex 9, Table 1). Firewood 2.22 Recent estimates of firewood consumption in Sri Lanka are based on per capita usages that vary from 0.25 m3 (USAID) to 0.40 m3 (FAO) which, with a population of 15.2 M, would give an annual overall consumption varying from 3.8 M m3 to 6.0 M m3. Considering that 94% of Sri Lanka's households use firewood for their cooking needs, the higher figure appears more reasonable and has been adopted for the purpose of this report. The large range in the estimates, however, underscores the need for a systematic study of firewood demand. 2.23 The supply system for firewood is difficult to identify. The Timber Corporation supplies only 10% of the estimated consumption; the rest is either cut directly by the users -- which would be the case for most of the rural poor -- or traded through private channels. A substantial quantity of firewood -- of the order of 1 M m3 per annum -- is derived from non-forest plantations, especially from rubber estates. The balance would come from uncontrolled fellings both in forest reserves and other state forests and from the farmers' homesteads. It should be noted that firewood is also used by the tea factories. They are supplied partly from adjacent forests, but mainly from southwestern rubber plantations which are currently subject to an active cutting and replanting program. 2.24 Since firewood is only one source of energy which, technically, may be easily substituted, future demand for firewood will depend on the total energy requirements and relative prices and availability of substitutes. Thus, demand will always be strong from the rural poor for firewood which they can collect gratis. Monetary demand for firewood (e.g. from fuelwood plantations) would no doubt be much less. Since there will be large supplies of "free" or cheap firewood from existing forests and other sources over the next 20 years, firewood consumption is not likely to decline over this period (para 2.26). On the other hand, if a constant per capita consumption is projected, as ADB has done in a recent report, then firewood requirements would increase from the present 6 M m3 to 8.2 M m3 by the year 2000. 2.25 It is much more difficult to establish the supply situation of firewood than for industrial wood since almost any scrap wood will do and since the bulk is non-commercial, consumed in rural areas and mostly cut and transported by the users, therefore eluding most attempts of quantification. 2.26 A rough estimate may be made of the potential of existing forest resources in the Dry Zone to contribute to the supply of firewood. The total area of "dense" forest in the Dry Zone is 1 M ha and there is another million ha of open torest and scrub land which would be sufficient to cover the present estimated aggregate volume of consumption for another 20 years, albeit the location of the forest is in relatively sparsely populated areas and there would be a logistics problem. In addition, the bulk of the present plantation program is for firewood. 2.27 Considering the above, together with the short rotation of firewood plantations, and bearing in mind the importance of transport distance in determining the economic viability of firewood plantations, there appears to -12- be no immediate need to enter into additional large scale firewood projects. USAID stated in the project paper for their 8,000 ha firewood plantation that "size and location may have to be adjusted with improved information on the magnitude and location of demand". It would also appear that, because of the low income levels of the consumers, more emphasis would have to be on farm forestry than on firewood plantations if the population's energy needs are to be met. An in-depth study of the firewood market should be given highest priority and should precede any new large-scale investment in firewood plan- tations. F. The Forest Industry 2.28 Sawmilling strongly dominates the forest industry scene in Sri Lanka with an estimated capacity of 425,000 m3 per annum of output. However, 90% of the estimated 280 mills are in the private sector about which little is known, but generally they are old, small, poorly maintained and operate normally a single shift of no more than five hours. The State Timber Cor- poration operates nine small sawmills, the Ceylon Plywood Corporation, two, and 15-20 units are in the semi-public or cooperative sector. The Timber Corporation further operates seven seasoning kilns and four impregnation plants. The Plywood Corporation operates the country's two plywood mills with a rated capacity of 34,000 m3, but produces only about 12,000 m3. It also owns one particle board plant and a furniture factory. Sri Lanka also has two pulp and paper mills operated by the National Paper Corporation with a combined capacity of some 35,000 t of paper. Rice straw, waste paper and imported pulp provide raw materials for the Paper Corporation's plants. Domestic wood has been tried, but the trials showed that the additional investments that would be required to convert to this raw material would not be economic considering the small size of the plants and the market in Sri Lanka. Sri Lanka also has six match factories which are all in the private sector. 2.29 The forest industry in Sri Lanka is static and has undergone little change over the last decade. It is therefore old, but yet the profitabilitY is said to be good. The increasing shortage of industrial wood expected by the trade is given as the major reason for the lack of interest in new investments. In the private industry, the fear of nationalization has also been a factor. Because of this lack of development, the industry does not have the equipment and know-how to utilize the exotic, fast-growing timber species now being grown in plantations in the country. This problem would be addressed by the project. -13- G. Forestry Training 2.30 In Sri Lanka, the grossly inadequate number of people at all levels trained in forestry skills is perhaps the major single factor in explaining the lack of planning and poor quality in forest operations. It is also the major constraint on a reforestation and forest management program commen- surate with the needs of the country. 2.31 Forest Ranger and Forest Guard Training. The Sri Lanka Forest Col- lege at China Bay was established in 1959 and is the only institution in the country for forestry training. Presently a one year in-service course for 12-15 forest guards and a three month orientation course for rangers and guards is the only forestry training offered in Sri Lanka. Forest rangers used to be trained in Coimbatore and Dehra Dun in India, but in recent years it has become progressively more difficult to place them there due to the great demand to train India's own personnel. 1/ The training facilities at China Bay have insufficient capacity and the actual training is geared only to the elementary, practical aspects of forestry in an effort to bridge the Forest Department's most pressing needs. As a result, there is a serious backlog in training. Out of the Forest Department's 463 guards, 242 are without training and, out of the 189 rangers, 178 are reportedly without training. USAID is presently providing material and technical assistance for the introduction of a two-year course for forest rangers with an annual intake of some 25 students. USAID is also providing technical assistance to improve the syllabus for the training of forest guards. However, the forest guard training facilities also urgently need rehabilitation and expansion. The Government has requested IDA assistance to do this, which has been made part of the proposed project (para 4.19). 2.32 Professional Training. There are no facilities in Sri Lanka for the training of professional foresters. Traditionally, this has been done in Dehra Dun in India, but as for rangers, access has become increasingly dif- ficult and new options need to be found. At present, it is not possible to find persons with professional forestry training to fill vacant positions in the Forest Department. Out ot 33 professional forester positions, seven are vacant. Only six of the Department's professionals have a full univer- sity level forestry education, eight have other degrees plus a forestry diploma and the remainder have other non-forestry degrees. The proposed project seeks to ameliorate this situation (para 4.17 et seq). 1/ In addition, the Bank has recently concluded that the forest institutes and forestry training in India needed considerable strengthening to meet the country's needs. -14- H. Government Plans and Policies 2.33 According to Sri Lanka's Public Investment Plan of 1982-86, the main long term objectives of the forestry sector are: (a) Conservation, protection and scientific management of natural and man-made forests; (b) reforestation of all steep, erodible and denuded lands in the mountain catchments; (c) planting of fast-growing firewood species; and (d) development of forest plantations to meet, industrial and other requirements. 2.34 The targets for activities towards meeting these general objectives seem to be changing haphazardly, reflecting various pressures within and outside the government and annual plantings appear to be a function of left- over budgetary funds rather than based on some quantitative long-term development target. The lack of information and data on resource potential and the country's needs does not permit the preparation of a convincing development proposal. The shortage of skilled manpower is a major factor in this. 2.35 To overcome this, the preparation of a long-term plan for forestry development with operational goals is of the highest priority. Before the sector objectives can be quantified, however, the necessary data must be collected. The constraint of shortage of local skilled manpower could only be overcome by using foreign expertise until local skills have been developed in sufficient number. I. External Assistance to Forestry 2.36 IDA Assistance - The proposed project would be the first IDA assis- tance aiming specifically at forestry. Previous IDA assistance to the sector has been mainly as part of tree crop, diversification, and rural development projects. Annex 9, Table 1 provides a summary of foreign-assisted plantation establishment. Credit 818-CE for Tree Crop Rehabilitation included finance for tea estates to plant 590 ha with eucalyptus for firewood. Credit 819-CE for Tree Crop Diversificaton provided funds for estates to plant 3,700 ha with eucalyptus and pines for firewood and timber respectively. Credit 1079-CE, the Second Rural Development Project included the planting by the Forest Department of 6,700 ha of abandoned chena lands, steep and high eleva- tion grasslands, degraded tea plantations and Mahaweli catchment areas. -15- Finally, Credit 1166-CE, The Mahaweli Ganga Development Project III provides for the establishment of 1,500 ha of firewood plantations. Generally, the plantings under these projects have progressed in line with set targets. The projects are all still under implementation and the established plantations are still too young for a judgment of their quality. 2.37 UNDP/FAO Forest Inventory - In order to advance the preparation of the Master Plan under the proposed project, FAO started a first part of a forest inventory in January 1982 with UNDP finance. The scope and priorities of the inventory had previously been agreed between the Government, FAO/UNDP and IDA. The total forest inventory will cover an area of 2.3 M ha, 1.3 M ha of which is closed natural forests and forest plantations and the remaining 1 M ha is open degraded forest estate. Only some 0.6 M ha of forest in national parks, game sanctuaries, etc., would not be included in the inven- tory. The ongoing FAO/UNDP project is funded until the end of 1984 by which time the priority area of 1.3 M ha of closed forest should have been inven- toried. 2.38 Other Donors - Under various integrated rural development projects, NORAD, SIDA and Dutch aid has been provided for the establishment of, in total 8,700 ha firewood plantations between 1979 and 1984. Over the period 1980-1984, USAID is financing the establishment of 14,000 ha firewood planta- tions on degraded chena land and the afforestation of 6,000 ha in the Upper Mahaweli Catchment area to be used mainly for firewood. ADB is financing establishment of 14,000 ha firewood plantations and 4,300 ha farmers' wood- lots between 1982 and 1987. Five 25-ha community woodlots on an experimental basis and six demonstration woodlots totalling 220 ha are also included in the ADB project. Several other projects are under discussion. The CIDA Lower Uva Regional Project proposal contains a significant forestry com- ponent. World Food Programme assistance for plantation establishment is also being considered. 2.39 In addition to plantings, the USAID-financed project also includes experimental village charcoal production, training, research and extension components and 124 man-months of technical assistance. In addition to improvements in the China Bay technical training facilities (para 2.31), 347 man-months of short term and 14 man-years of long term professional training, in all 42 man-years, will be provided abroad over five years until 1985. It is ironic, but it appears unavoidable that this will have a serious impact on the availability of professional stafftime in the Forest Department over the same period. The 42 man-years of overseas training represent 25% of avail- able professional staff time in the Forest Department. Some of those trained may come from outside the Forest Department, but this will not change this general conclusion, particularly considering that ADB also provides almost ten man-years of professional training overseas until 1987. 2.40 A Swiss Satellite Imagery Project is assisting the Survey Department to prepare a land use map which, together with ongoing aerial photography and -16- ground control, will provide an essential input into the forest inventory under the proposed project. In addition, there is a great deal of other foreign assistance to the sector, not directly related to the proposed project, notably to forest industries, and it is difficult to get a complete picture due to the lack of coordination in the subsector. In fact, the lack of a long-term forestry sector strategy and quantifiable objectives with clear plans how these would be met, has led to foreign donors choosing projects which reflect their own priorities and concerns rather than neces- sarily Sri Lanka's needs. The result is numerous, unrelated stop-gap activities and an inefficient use of available resources. J. Constraints to Development 2.41 Arising from the previous discussion, it is apparent that the major constraints on a forestry development program commensurate with Sri Lanka's needs and aspirations are: (a) the grossly insufficient number of people in Sri Lanka with forestry training at all levels; and (b) the lack of a long-term comprehensive sector plan and the lack of data for planning. 2.42 The primary and most serious limiting factor is the shortage of people trained in forestry. The shortage of people with forestry skills can only be overcome with training and this is recognized in the proposed project. To train professionals, however, requires some time which will have to be bridged by drawing on foreign expertise. Because of the urgency in arresting the trend of deforestation and to establish new forest resources through plantations in target-oriented programs, there is also an immediate need for a forestry master plan as a framework within which such activities can take place. III. THE PROJECT AREA A. General 3.01 Two general areas have been identified for industrial plantations under the project, one in the East within the Batticaloa and Amparai Dis- tricts and the other in the South in the Hambantota and Moneragala Districts (see Map in back of report). Forest protection, ground preparation trials and a socioeconomic study would be carried out in these areas. Management of teak plantations under the project would also mainly be carried out in these locations. The urgent program to give silvicultural treatment to young teak, pine and mahogany stands and species and provenance trials as well as the -17- Master Plan and the training would cover the whole country. The mature plantations that would be harvested and replanted under the project are in the upcountry forestry division, essentially in the district of Nuwara Eliya. B. Climate 3.02 Although conditioned by altitude, the climate of Sri Lanka is generally tropical, characterized by low variation in temperature around the mean of 25o C and by heavy seasonal rainfall, which is carried by the south- west (May-August) and northeast (October-December) monsoons. The island can be divided into three clearly distinct agro-climatic zones (see Map): the Wet Zone highlands, the Intermediary Zone in the southwest of the country, and the Dry Zone to the north and the east. 3.03 The project areas in the East and South of the country are in the Dry Zone. The East receives between 1,500 and 2,000 mm annual rainfall and the South between 900 and 1,600 mm. The lower rainfall in the South, which receives rain during both monsoons, is better distributed than the total higher rainfall in the East, which only receives the NE monsoon. The evapotranspiration is close to the average yearly precipitation, therefore, water deficits can be expected during many months, particularly in the South. During the NE monsoon, cyclones occur, mainly in the Eastern area, more seldom in the South. The damage caused by the 1978 cyclone is considered exceptional, however. From a forestry point of view, a more important problem is the hot desiccating winds blowing from June to September which contribute to a high evapotranspiration. 3.04 The replanting of mature plantations will take place in the Up-country areas, where the annual rainfall varies from 3,000 to 5,000 mm and from a low monthly rainfall of about 100 mm in January to a high in June of about 900 mm. C. Soils, Land Use, Population and Infrastructure 3.05 Both plantation areas, in the East and the South, are underlain by pre-cambrian rocks with frequent outcrops, particularly in the East. The dominating soil types in the Dry Zone project area are reddish brown earths and non-calcic brown soils with their drainage associates in undulating terrain. The Up-country area is characterized by mostly rather acid, red-yellow podsols and wet mountain regosols with a broken and steep topog- raphy. 3.06 The selected project areas in the South and the East of the Country are mainly abandoned chena lands, but some severely cyclone-damaged teak plantation areas are also included in the East. Some encroachment still occurs, but this is generally limited to the vicinity of motorable tracks. There are, however, free ranging cattle in parts of the project area which, -18- if not controlled, could cause damage to young plantations. Likewise, there is also a fairly rich wildlife in the area and in recent years some young teak plantations have been damaged by elephants. The reason is not fully known, but the Department of Wildlife Conservation maintains that, because of the recent large rural development schemes, the elephants have been deprived of access to customary feeding grounds resulting in hunger-induced stress. 3.07 The total population of the Southern project districts is about 680,000, of which 90% are rural. The total population of the Eastern project districts is about 720,000, of which about 80% is rural. The population densities in these areas are low with about 160 per km2 in the south and 130 in the east, compared to a country average of about 220 and about 425 in the Nuwara Eliya district. The transportation network and infrastructure in the project area, as in the rest of Sri Lanka, is well-developed and would need no extra investments to meet the project needs. IV. THE PROJECT A. Objectives and Main Features 4.01 The main objectives of the proposed project would be: (a) to provide Sri Lanka with a Forestry Master Plan and a detailed investment program for a first time-slice of five years; (b) to strengthen the country's training for forest staff, both formal and in-service; (c) to assist Sri Lanka in making best use of existing staff and forest resources, firstly through investments in the management of existing forest plantations and, secondly, in the limited establishment of new plantations to meet the foreseen industrial wood shortage; and (d) to strengthen research and trial programs to pave the way for future gains in sector productivity. 4.02 The project would cover a six-year period from 1983 to 1988 but, due to the budgetary constraint (para 1.03), the cost of activities in 1983 cannot exceed Rs 5 M (US $240,000). The project would include the following major components: -19- (a) Formulation of a Forestry Master Plan and a five-year Investment Program based on the following activities and studies: (i) Strengthening of Planning (ii) Institutional Development Study (iii) Forest Inventory (iv) Preparation of Forest Management Plans (v) Assessment of Non-Forest Wood Resources (vi) Wood Market and Demand Study (vii) Forest Industry Study (viii) Wood Utilization Study (ix) Logging and Transportation Study (x) Analytical Cost Accounting Study (xi) Establishment of Data Bank (b) Forestry Training: (i) Training of professional foresters. (ii) Forest guard and forest ranger training. (iii) In-service training. (c) Plantations: (i) Establishment of 8,000 ha industrial plantations. (ii) Management ot 10,000 ha teak plantations. (iii) Silvicultural treatment of 15,000 ha young stands. (iv) Harvesting and replanting of about 1,000 ha of over-mature stands. (v) Species' provenance trials. (vi) Land clearance and ground preparation trials. (vii) Forest protection. (viii) Socio-economic study. (ix) Soil/Site survey. B. Detailed Description Master Plan 4.03 Aims and Strategy - To remedy the lack of planning in the sector, the project would provide a technical assistance program for the preparation of a Forestry Sector Master Plan and a five-year investment program. Terms of reference for the consultants are available in the project files. The project would cover the costs of foreign experts and local staff, vehicles and equipment needed for the preparation of the plan and the investment -20- program which would be coordinated by a Planning Unit to be established under the project within the Ministry of Lands and Land Development. Because of the long rotation periods of tree crops, the planning horizon would have to be rather long-term. Within this long-term perspective with broader goals, more specific development targets would be defined for a shorter period of about 20 years which would coincide with the rotation period of plantations of fast-growing tree species and with the duration of the working plans being prepared for the natural forest. To ensure the follow-up and implementation of the plan, the project would also include the preparation of a detailed operational five-year investment program as the first phase of this plan. The main planning activities and studies under the project are described in the following paragraphs. 4.04 Strengthening of Planning - The coordination of the Master Plan preparation would be carried out by a Planning UJnit. It is essential that this unit is placed at a sufficiently high administrative level to ensure an effective and authoritative coordinating function and, as the key policy and decision maker, the Ministry of Lands would have to be in charge of the plan formulation. Therefore, the Forestry and Environment division of the Minis- try -- which already, though seriously under-resourced, is charged with the sector planning and coordinating function -- would be reorganized and strengthened to undertake the planning task and assume the role of the Plan- ning Unit. The director of the division would be the head of the Planning Unit and have the principal responsibility of processing and developing the plan. The project would recruit a senior planning advisor for three years starting in July 1983 and an economist for 18 months, starting in January 1984, to assist the director. 4.05 The Planning Unit would consist of three "desks" responsible for: (a) plan development; (b) programming, monitoring and evaluation; and (c) data collection and storage (data bank). Each desk would be manned by one qualified officer. Senior staff of the Unit would also include one project accountant and one administrative officer. The project would engage a data processig consultant for three months in 1984 to assist the data bank officer and to design data processing, storage and retrieval systems and an automated report production system. The data bank would use computer facilities available at the Timber Corporation. The project would include office rental and the staffing of the Planning Unit. Also, the project would provide three vehicles, office equipment and furni- ture for the Unit. 4.06 Institutional Development Study - Since many of the forestry sector's weaknesses in the past have been of an organizational and institutional nature, a study would be carried out by the Planning Unit with a view to -21- strengthening the sector institutions and rendering its organization more effective. Special attention would be given to the long discussed merger of the Forest Department and the Timber Corporation and to future manpower requirements of the sector. 4.07 Forest Inventory - The proposed project would extend the FAO/UNDP project by a further 12 months until the end of 1985 to cover the entire forest resources of the country. The intensity of the forest inventory would vary according to the category of forest with a higher intensity in more productive forests. Three main categories may be distinguished: (a) Management inventory for productive natural forests (about 0.2 M ha); (b) Management inventory for established plantations (about 0.1 M ha); and (c) Indicative inventory of Dry Zone unproductive closed forests as well as scrub forest, open forest and sparsely used agricultural land. The project would extend and finance the forestry inventory expert for 12 months in 1985 and a photo-interpretation expert for three months in 1984. In addition, the project would provide for local staff costs. Five vehicles would be procured to permit the expansion in the number of field crews. 4.08 Preparation of Forest Management Plans - Progressively with the completion of the inventory, working plans would be prepared for convenient management units to permit the effective exploitation and management of the forests. The project would provide a forest management expert starting in January 1984 for 18 months to assist and to train the staff in the Forest Department in preparing and implementing the management plans. 4.09 Assessment of Non-forest Wood Resources - The supply of wood from agricultural plantations, mainly coconut and rubber, is not well documented. It has been estimated that as much as two-thirds of the industrial wood and about 15% of fuelwood is supplied from these sources. A study would be carried out under the project to assess the present and future supply of agricultural plantation wood. The consultant economist in the Planning Unit would be responsible for the design and the implementation of this study. The new land-use maps, together with information from the Plantation Minis- tries, would provide the main data base which would be supplemented with a series of field surveys with the assistance of Forest Department field staff and locally recruited consultants, for which funds have been made available under the project. 4.10 Wood Market and Demand Study - The lack of adequate information on the wood market has been referred to (para 2.18). To fill this gap, a study -22- would be carried out of the structure, geographical distribution and mag- nitude of the market for wood and wood-based products. The study would aim at identifying wood products, markets, prices and current supply systems. The study would also give projections of demand for wood and wood-based products. Special attention would be given to assessing the trend in firewood demand and to the impact of the Mahaweli scheme. The terms of reference for the study would be prepared by the Planning Unit in collabora- tion with the Timber Corporation. The study would be carried out by a local consulting group and financed under the project. 4.11 Forest Industry Study - This study would identify the development needs of the mechanical wood industry. Particular attention would be given to capacities, processing techniques and economics. The project would provide a consultant for three months in 1984 to carry out the study. Coun- terpart staff would be provided by the Timber Corporation. 4.12 Wood Utilization Study - The project would provide three months of consultancy in 1984 to determine the best handling and processing methods and usage of both natural forest and plantation grown tree species. Particular attention would be given to exotic species like eucalyptus and pines now grown in plantations. The Timber Corporation and the Forest Department would provide counterpart staff for the study. 4.13 Logging and.Transportation Study - Wood in Sri Lanka has tradition- ally been extracted exclusively from the natural forest, mainly by contrac- tors through selection telling, but recently also through clearfelling under the Mahaweli Scheme. The logging and transportation techniques are however little adapted to the felling of plantations. The project would provide a consultant for three months in 1984 to study the potential for improving the productivity of logging and transport operations and would, in particular, define logging and transportation systems suitable for the forest areas in the Wet Zone and Up-country in view of their environmental significance and for plantations. The Timber Corporation and the Forest Department would provide counterpart staff for the study. 4.14 Analytical Cost Accounting System - Like other government depart- ments, the Forest Department's accounting is made on a cash basis which provides insufficient information for effective cost management. The project would provide a consultant for six months in 1984 to review the present recording system and to design a cost accounting and information system which will meet modern management needs. The project would also provide an addi- tional accountant in the Forest Department who would be trained to manage the system. The system would also enable the Planning Unit to monitor and evaluate project progress. -23- 4.15 Forestry Data Bank - The Planning Unit would identify the data needs for forestry sector planning and organize its collection. This data would be computerized and the project would provide a three month consultancy in 1984 to design the data storage, processing and retrieval system. Forestry Training 4.16 In Sri Lanka, the scarcity of people trained in forestry has been identified as probably the major constraint to the development of the country's forest resources. On the basis of a major FAO study, 1/ with adjustments for more recent information, Sri Lanka's requirements of trained forestry staff in the year 2000 has been estimated as 200 professionals and 613 technicians (foresters and forest rangers). To meet this target and allowing for retirement of present staff (40%, considering age structure), there is a need for 13 professional graduates and 30 additional technicians each year. The training of technicians is part of the USAID-financed project (para 2.31). The proposed project would provide professional training, but would also strengthen the training of forest guards (para 4.19). 4.17 Professional Training - The project would support the introduction of a two-year, postgraduate course in forestry which would provide 12-15 stu- dents annually with a MSc in forestry. For this purpose, a forestry program would be established at the University of Sri Jayewardenepura near Colombo, within its Faculty of Applied Sciences, Department of Botany. The entry requirement would be a BSc in biology or agriculture with a good basis in mathematics. Criteria, satisfactory to IDA, for the selection of the can- didates for the course have been prepared by the University. As is the practice for postgraduate studies, the students would be charged a fee of Rs 5,000 for the two-year course. Some of the candidates are expected to be supported through various scholarships from public and private sector organizations. In cases of extreme hardship, the University may waive the fee for suitable candidates. Curricula for the courses have been prepared with IDA assistance (available in project file). The project would include a building with the necessary teaching facilities comprising a lecture theatre, laboratories and staff offices, and a greenhouse for the growing of silvicul- tural study material. Laboratory equipment, glassware, chemicals, field and camping equipment, as well as four vehicles for the field trips and forest tours will also be provided. A detailed list of equipment and materials to be procured is available in the project file. Summary costs are given in Annex 3, Table 1. 1/ Reappraisal of Forestry Education and Training Needs in Selected Countries in Asia and the Far East, FAO, 1978 -24- 4.18 Most of the personnel required for the teaching of the program will come from the Botany Department at the University or from the Forest Depart- ment. Funds for visiting lecturers and for support staff are provided under the project. 120 man-months of local consultancy are also required and are included in the project. In addition, three foreign consultants are needed to teach for a period of two to three months each of the first three years (total 24 months) in forest planning and policy, logging and wood transporta- tion and in photogrammetry and photointerpretation. Four or five visiting professors would be invited for short periods (one month) for the duration of the project (total 14 months) to lecture on special topics of forestry. Four scholarships for a period of two years each would be offered at foreign forestry schools so that young foresters could be trained in fields where no specialist is presently available in Sri Lanka and who could subsequently replace the foreign consultants. Assurances were obtained from the Government that the University would prepare a training program for the scholarships for IDA review by December 31, 1983. Funds have also been included for short, 4-6 weeks study tours abroad for professional forestry staff. Assurances were obtained from the Government that the Project Director, with the assis- tance of the Senior Planning Advisor, would prepare a program for such train- ing for IDA review before December 31, 1983. 4.19 Forest Guard Training - Most of the requirements for forest rangers' training at the China Bay Forest College are being taken care of under USAID financing. The College would then have facilities to take in 25 forest rangers (for two years' training) and 15 forest guards (for one year's train- ing) each year. This would result in a disproportion between rangers and guards. In addition, existing forest guard facilities are below any hygenic standards, not conducive to effective learning and need improvements. The project would increase the annual training capacity of guards to 30 and provide facilities for the three-month orientation courses for new recruit rangers and guards, short-term training courses for Timber Corporation officers, assistant government agents and others involved in forestry. The project includes the construction of a new hostel lodging 30 forest guard trainees, a new kitchen and 14 twin cottages for junior staff. The old kitchen would be demolished, the sanitary facilities of the old hostel rebuilt and other minor renovations would be carried out. Four vehicles would be provided for the field work and the tours in the different forest regions. Appliances and furniture would be provided for the houses. Office equipment, laboratory, field and camp equipment would also be purchased under the project, as well as chemicals, reagents and technical literature. A detailed list of all items to be procured, with cost estimates, has been prepared and is available in the project file. A summary is provided in Annex 3, Table 2. Curricula for forest rangers and guards are being prepared by a USAID consultant who started his work during appraisal. -25- Plantations 4.20 Plantation Establishment - The project would provide funds for the establishment of 8,000 ha of industrial plantations in Dry Zone sites in the Batticaloa and Amparai districts in the East and Hambantota and Moneragala districts in the South of the counte survey under the project would provide the basis ry. A soil and site survey under the project would provide the basis for exact site selection (para 4.39). Annual planting targets would be set as follows: Table 4.1: PROJECT PLANTATION PROGRAM (hectares) Year Division 1984 1985 1986 1987 1988 Total Eastern 250 510 940 1,350 1,950 5,000 Southern 200 300 500 1,000 1,000 3,000 Total 450 810 1,440 2,350 2,750 8,0 The phasing is based on the experience in Sri Lanka where the lack of staff trained in the precepts of sound forestry practices has led to the current situation with thousands of ha of plantations (including those assisted by foreign aid) stagnating due to silvicultural neglect. It is, therefore, considered prudent to limit the planting targets in the initial years to ensure successful establishment through intensive husbandry and management. One of the main objectives of the plantation program is to train, by example, supervisory staff, workers and chena farmers in appropriate field techniques. Foreign technical assistance would be essential for the improvement in plan- tation practices and the project would provide 43 months of plantation advisor services. 4.21 - Species Selection: About 75% of the plantings would be with Eucalyptus tereticornis and Eucalyptus citriodora. Fifteen percent would be with Albizia odorotissima, Azadirachta indica and Gmelina arborea on a pilot plantation basis because of their promising performance in the Dry Zone. The remaining ten percent would be Teak (Tectona grandis) (Annex 9, Table 2). Because the quality of existing teak plantations generally is superior to that of other species, teak would have played a more important role in the plantation program were it not for disturbing evidence of elephant damage to young stands (para 3.06). Assurances by the Wildlife authorities that the stressful situations to which elephants were subject at the time of damage no longer exist are difficult to substantiate. Teak plantings under the project would, however, be kept away from the elephants' -26- normal feeding areas and migratory routes which are well known. The teak plantations would also be kept relatively small and closely monitored for elephant damage. The outcome of this experience would then provide a basis for future decisions on teak plantations. Whilst Eucalyptus tereticornis and citriodora grow well in the project area, they are not optimal species for production of construction grade lumber. Other options should be considered for meeting future timber needs such as growing pines in the Wet Zone and other potential lumber species in the Dry Zone. During the life of the project, it is intended to develop the technical packages which would make it possible in the future, significantly, to increase the planting of species of proven sawlog quality such as Gmelina, Albizzia, Azadiracta and conifers. 4.22 Nurseries: Only two nurseries are envisaged, one in each plantation area. The exact locations of the nurseries would be determined only when the proposed soil/site survey has been completed. The project would provide funds for the establishment and operations of the nurseries. In each nursery an office-cum-store, pumphouse, water tank and potting shed would be built with project finance. To assure the regular supply of water on which these seedlings depend, two waterpumps would be supplied to each nursery. They would further each be supplied with one 7-ton lorry for the transportation of soil and seedlings and one 125 cc motorcycle. 4.23 Planting: Plantings will be carried out manually either under the controlled "chena system" (para 2.13) or by using hired labor. The availability of chena farmers and the suitability of land for slash and burn cultivation sets the upper limit for the area planted with this much cheaper method. For proper root penetration and optimum yields, certain areas with a hardpan at depth would have to be machine ripped. The proposed soil/site survey would establish the extent of the area needing this treatment. Equip- ment for ripping is available in Sri Lanka on a rental basis. Funds have been provided in the project for the ripping of one-quarter of the plantation area. 4.24 Plantation Maintenance: A certain mortality among the seedlings after planting is always expected and such vacancies would be filled as required. Also, the rate of survival and of early growth of the plantations depend on the moisture and nutrients retained by the tree crop and, therefore, on the elimination of any competition. To this end, the plantations would be subiect to an intense weeding regime with six or seven weedings during the three years following the date of planting. Since, in the past, lack of maintenance was the main cause of failure of plantations, agreement was reached that the prescribed maintenance would be carried out on plantations established under the project and that a program for such maintenance would be prepared annually by the Forest Department. -27- 4.25 Plantation Headquarters: In each plantation area, an office-cum-quarters would be constructed for the assistant conservator in charge. The project would also provide two pickups and two four-wheel drive vehicles to meet the transport needs in each plantation area. 4.26 Staff Housing: Much of the success of the plantation project (e.g. for protection purposes) would depend on the staff living on or near the nursery and plantation sites. The project would therefore construct some housing in the field. The design of the houses would follow standards used by the Government for all its departments. 4.27 Management of Teak Plantations - The records show a total of some 30,000 ha of teak plantations in the Southern and Eastern Divisions. Many of these are beyond repair due to neglect, cyclone or elephant damage. However, there are still considerable areas of potentially valuable teak plantations, the full extent of which will only be known after the completion of their inventory in 1985. 4.28 Under the project, it is estimated that about 10,000 ha of such older plantations would be upgraded, essentially through thinning. If left without treatment, the period required to reach a certain economic girth would. be considerably extended and yields would be below potential. Funds have been provided for the marking operations which would be prescribed in the working plans. The Timber Corporation would remove the marked trees. No project funds have been allocated for the removal of the trees since the Timber Corporation has assured the mission that such operations would be commer- cially viable now with the completion of the salvage program of cyclone-damaged teak, the reduced supply of wood from Mahaweli clearings and with the projected increasing shortage of industrial wood. Assurances were obtained from the Government that thinnings would be an integral part of the working plans and that those marked under the project would actually be cut and carried out. 4.29 As the inventory activities wind down in 1985, the rangers and guards to lead the teams and vehicles (procured for the inventory) would become available for the management of teak plantations. Seven rangers and seven guards, after some training, with two laborers each would be able to carry out the operations over the three years 1986 - 1988. Funds have been included for the operating costs of required vehicles. 4.30 Silvicultural Treatment of Young Stands - Forest Department statis- tics show that, for the six-year period from 1975 to 1980, some 34,000 ha of teak, pine and mahogany were planted. Due to lack of staff and funds as a result of the priority given to the establishment of new plantations, most of these young stands have had little or no silvicultural treatment since the year of planting. In a number of cases, especially in the earlier plantings of 1975 and 1976, the crops will be beyond redemption, having been swamped by weed growth. Based on field observations, some 50%, i.e., 15,000 ha, of -28- 4.31 The areas to be treated would be identified on the basis of data generated through the forest inventory and through field inspections and scheduled treatments would be specified in the working plans. Assurances were obtained from the Government that its Forest Department would prepare annual programs for silvicultural treatment under the project for IDA review. Such programs should be supported by 1:25000 scale maps permitting the iden- tification of the areas proposed for treatment and necessary funds should be included in the budget. A first such program should be presented to IDA by June 30, 1983. The areas treated would be inspected by the Conservator or his designate and at the end of the year a report would be prepared on the implementation of the annual program (supported by map) with certification by the Conservator that indicated areas had received prescribed treatment. The proiect would provide funds for the labor to weed 3,000 ha each of the five years 1984-1988. Supervision would be provided by regular divisional staff. It is important to note that eucalyptus are not included among the species to be treated under this subcomponent of the project. Unless eucalypts are given intensive weedings in the first two years after planting, there is no prospect of recovery thereafter. 4.32 Harvesting and Replanting of Over-mature Stands - In the Up-country zone, there are some 2,000 ha of over-mature eucalypts, cypress and pine plantations. In their present condition, these stands show little additional growth and are not utilizing the sites to the full potential. On about half of the 2,000 ha where there would be no environmental effects, particularly erosion, the project would harvest and replant 200 ha annually of these plantations as prescribed by the management plans which would be prepared under the project (para 4.08). The Timber Corporation would do the felling and wood extraction on a commercial basis. The project would provide funds for site preparation and for replanting. Supervision would be provided by regular staff of the Forest Department in the Up-country division with advice from the plantation and silvicultural research advisors. 4.33 Species and Provenance Trials - There is an urgent need to identify additional fast-growing species, suited for Dry Zone plantations, and provenances which could utilize the full potential of the land and provide good quality timber. To a lesser extent, this is also true for the Up-country Zone. It is proposed that, in the Dry Zone, trials be made with eucalypts, pine and light hardwoods, both local and exotic. In the Upcountry Zone, trials would be with species belonging to the genera Agathis, Araucaria, Cupressus and Pinus. However, the final program would be designed by the silvicultural research advisor, funded under the project, in coopera- tion with Forest Department staff. The research advisor would make annual visits to Sri Lanka in 1984 - 1986, each of two months duration. The project would provide one vehicle, staff, operating costs and fencing (on the basis of 65 ha) for the research program. 4.34 The Forest Department has a long history of species introduction and trials. However, due to lack of staff, many of the trial plots were -29- neglected, and growth data, when recorded, was relegated to files where much of it remains in the raw state. Before embarking on further species and provenance trials, the research data available at headquarters and in the field should be tabulated and analyzed and research/trial plots should be checked for the current status. For this purpose, a small team consisting of one biometrician, two input men and two office staff would be recruited under the project for a period of six months. Existing inventory staff and divi- sional field staff would carry out the measurements on the trial plots. A mini-computer would also be purchased for this purpose and for other Forest Department data treatment needs. 4.35 Land Clearance and Ground Preparation Trials - Experience elsewhere in tropical countries has shown that, for optimum yields, it is essential to plant eucalyptus in bare and cultivated ground and that this weed-free state be maintained until canopy closure 2-4 years later. Land clearance of forest cover can be achieved either manually, by machine or by some combination of the two. Labor, in particular the chena system, is generally more economic. However, if the forest cover is difficult to eradicate or if a "hard pan" is present at depth in the soil, then machines may have to be used for clearing and ripping. It is proposed to establish a total of 600 ha of Eucalyptus tereticornis in a series of field trials in the Eastern and Southern project areas using different combinations of men and machines. The trials will determine the most suitable method of land clearance and soil preparation in terms of minimum costs and maximum yields. The program will be designed by the plantation advisor in consultation with the silvicultural research advisor. 4.36 In order that the results from the trials are not marred in any way by plant mortality or unthrifty growth, the trials should not begin until 1985 to allow the project to solve any nursery and establishment problems that may arise. The trials would initially be limited to the Eastern area under close supervision of the plantation advisor. They would then be moved and repeated in the Southern area by which time any difficulties and unsatis- factory techniques would have been eliminated. This limits the need for procurement of necessary implements under the project to one set only. It also affords local staff the opportunity of laying down trials with minimum supervision since by 1987 the plantation advisor will no longer be in a resident status but an annual visitor. The staffing would be the same as for the species trials. The project would provide funds for the land clear- ing and for the establishment of the trial plantations using hired machinery. 4.37 Forest Protection - In the dry season, plantations are particularly vulnerable to fire, especially in the early years during the establishment phase. The custom of burning brush after clearing from chena and other burning, leads to fire destroying large areas of plantations. The project would provide look-out towers, fire patrols, trained crews with communication and fire-fighting equipment, fire protection belts and fire breaks for the protection of the 8.000 ha of new plantations. A fire protection consultant -30- would also be provided to design the program and to train the firefighting staff. He would also provide a plan for the protection of other forests in Sri Lanka against fires. The advisor would make three annual visits to Sri Lanka during 1984 - 1986, each of two months duration. 4.38 Socio-Economic Study - As elsewhere in the country, in the Eastern and Southern project areas, there are large numbers of free-ranging domestic cattle on the forest estate, including the project area. In addition to generally abandoned chena land, some encroachment by a few chena farmers is still occurring. To avoid damage caused by browsing and trampling of young plants, cattle would have to be kept away from the plantation areas. This may lead to conflicts with the local populations. Plantings may also lead to conflicts with squatters. To evaluate the risks for conflicts, the magnitude of the problem, and to propose concrete, realistic, and acceptable solutions, the project would fund a socio-economic study which would be carried out prior to plantation establishment. A local consultant would be engaged for the purpose. Assurances were obtained that the study, following terms of reference satisfactory to IDA, would be completed and presented for IDA review by June 30, 1984 and that, after consultation with the people con- cerned, an appropriate course of follow-up action be discussed and agreed with IDA. 4.39 Soil and Site Survey - Soil factors play an important role in modify- ing the effects of climate and are sometimes dominant in determining the suitability of a site for planting. Local variations, connected with topog- raphy, not shown on available soil maps, are frequently more important than regional variations associated with climate or geology. The recurring pat- tern of soil variation due to topography, known as the soil catena, is par- ticularly common in the Eastern and Southern project areas. The project would, therefore, provide funds for a soil and site survey which would be used for the selection of the net 8,000 ha plantation area. The survey would be carried out, in cooperation with the Forest Department, by the competent government department or by a local consultant (terms of reference in project file). Assurances were obtained that the soil survey would be completed and presented for IDA review by June 30, 1984. -31- C. Implementation Schedule 4.40 The project would be implemented over the six-year period 1983-1988. The six-year period is required because project activities in 1983 would have to be limited to Rs 5 M, due to Government budgeting constraints. Project activities in 1983 would, therefore, mainly include preparatory work for the main project investments. In 1983, all consultants' contracts would be finalized, both local and foreign. The team leader for the foreign consult- ants would start his assignment in Sri Lanka on 1 July 1983 and make neces- sary arrangements for the rest of his team. The plantation advisor should start his assignment on 1 October 1983 in order to make the necessary preparations for the nursery work. For the professional training, preparatory work would start in January 1983 in order that the first courses, not requiring consultants, may start in October 1983. Designs of main civil works should be finalized in 1983 and procurement documents prepared to permit earliest possible deliveries in 1984 when budget funds become avail- able. The socio-economic study and the soil and site survey would also be undertaken in 1983. -32- D. Project Costs 4.41 Total costs of the six-year project, including contingencies, have been estimated at Rs 316 M (US $15.0 M equivalent), of which Rs 99 M (US $4.7 M) is foreign exchange and a negligible amount duties and taxes (less than US$0.1 M). The cost estimates are based on mid-1982 prices. Physical con- tingencies (3.7% of base cost) have been applied individually to the various cost items, but are generally nil on consultancy services and vehicles, nil or 5% on plantation labor and local staff costs, 5 or 10% on equipment, materials and operating costs and 10% on civil works. Summary project costs are shown in Table 4.2 below and details are provided in Annexes 2 to 7. Table 4.2: SUMMARY OF PROJECT COST Local Foreign Total Local Foreign Total Foreign as % of ----Million Rupees--- -----US$ Million--- Total Master Plan 14.0 31.1 45.1 0.67 1.48 2.15 69 Professional Training 9.0 15.2 24.2 0.43 0.72 1.15 63 Technical Training 5.9 3.9 9.8 0.28 0.19 0.47 40 Industrial Plantations 54.3 19.0 73.3 2.59 0.90 3.49 26 Management of Teak 2.1 1.0 3.1 0.11 0.04 0.15 31 Treatment of Young 22.4 - 22.4 1.07 - 1.07 0 Stands Replant Mature Stands 4.1 0.2 4.3 0.19 0.01 0.20 5 Research and Trials 5.3 6.5 11.8 0.25 0.31 0.56 55 Base Cost (in mid-1982 prices) 117.1 76.9 194.0 5.59 3.65 9.24 40 Physical Contingencies 5.8 1.4 7.2 0.27 0.07 0.34 20 Price Contingencies 93.8 20.6 114.4 4.47 0.98 5.45 18 Total Project Cost 216.7 98.9 315.6 10.33 4.70 15.03 31 Price contingencies (59% of base cost) are relatively high, reflecting the high projected domestic inflation rate and the comparatively large investment expenditures towards the end of the project due to the progressively increas- ing plantation areas. Price escalations are based on the following inflation rates: -33- Table 4.3: INFLATION RATE (percent) 1982 1983 1984 1985 1986 1987 1988 Local 20 20 15 12 10 10 10 International 8.0 8.0 7.5 7.0 6.0 6.0 6.0 E. Financing 4.42 The proposed IDA credit of SDR 8.5 M (US$9 M) would finance 60% of project costs. Co-financing arrangements are being made with FINNIDA which has committed Finnmark 13.5 M (US$2.44 M) of grant aid to finance technical assistance for the Master Plan and plantation activities under the project. A draft Memorandum of Agreement between IDA and FINNIDA was drawn up at negotiations. Co-financing arrangements satisfactory to IDA would be a condition to effectiveness. The proposed financing plan is shown in Table 4.4 below. Table 4.4: PROPOSED FINANCING PLAN (US $ million) GOSL FINNIDA IDA Total Civil Works 0.08 - 0.70 0.78 Vehicles - 0.43 0.43 Equipment and Materials 0.15 - 0.94 1.09 Technical Assistance Master Plan - 1.60 0.23 1.83 Plantations - 0.84 - 0.84 Training - - 0.51 0.51 Scholarships - - 0.23 0.23 Local Consultants - - 0.29 0.29 Plantation Establishment and Management 0.85 - 5.67 6.52 Operations & Maintenance 1.27 - - 1.27 Salaries 1.24 - - 1.24 TOTAL 3.59 2.44 9.00 15.03 Percent of Total 24 16 60 100 -34- F. Procurement 4.43 Vehicles, equipment and materials totalling US $1.5 M would be procured under the project. Vehicles (US $0.4 M) would be procured through international competitive bidding in accordance with IDA guidelines. Other equipment and materials (US $D.9 M), because of the small quantities, the low unit costs, and, for the training institutions often proprietary nature, are not suited for international competitive bidding. Such equipment and materials with individual contracts not exceeding $30,000 and no more than two vehicles urgently needed for project implementation would be procured through prudent shopping, which involves comparing prices from no less than three independent foreign or local suppliers. In cases of proprietary and highly specialized items, such as seeds requiring special qualitities and books, direct purchase would be used; the amount involved is estimated at US$0.2 M. In applicable cases, local manufacturers would be given a preference margin of 15% on the c.i.f. price of the internationally offered items or the relevant import duty, whichever is lower. Civil works (US$ 0.8 M) are small and scattered, consisting mainly of simple housing and training facilities which would not be of interest to international bidders. There- fore, contracts would be let after competitive bidding advertised locally according to government procedures which are satisfactory to IDA. The local contracting industry is well developed in Sri Lanka and adequate competition should be offered. However, if due to the small size of the individual contracts, no responsive bids or no bids at all are received, force account work would be utilized. Plantation activities (US$6.5 M) would be carried out either under Forest Department force accounts, or under contracts let through competitive bidding advertised locally according to government proce- dures satisfactory to IDA. Consultant services (US $3.5 M) would be procured following procedures satisfactory to IDA. 4.44 The balance of the project cost consists of scholarships (US $0.2 M), operating costs (US $1.3 M) and salaries (US $1.2 M). G. Disbursements 4.45 Disbursements under the project would be completed by December 31, 1989, about one year after project completion. The seven year disbursement period compares with about nine years for the typical IDA project in the South Asia region, in agriculture. The difference is believed to be reasonable considering that the small volume of simple procurements and civil works will be done early during project implementation and that most funds will be disbursed against plantation activities for which the Forest Depart- ment has a good record of achieving physical targets. Disbursements (US $9.0 M) would be made for: -35- (a) 100% of foreign expenditure on directly imported vehicles, equipment, furniture, books and materials (including plantation inputs and materials) or 100% of ex-factory costs if locally manufactured or 85% of expenditures if such imported goods are procured locally (US $1.4 M); (b) 100% of expenditure on technical assistance, consultants and scholarships abroad (US $1.2 M); (c) 90% of expenditures on civil works construction under the project (US $0.7 M); and (d) 90% of expenditure on plantation establishment and manage- ment, and on research and trial plots (US $5.7 M), 4.46 Withdrawal applications for all categories, except for plantation activities under (d) would be fully documented (US $3.3 M). Disbursements for plantation activities under (d) above (US $5.7 M) would be made against statements of expenditure on area planted or managed giving details of loca- tion, area, type of expenditures, whether chena or contracted labor and unit costs. The statements would be prepared by the assistant conservator in charge of industrial plantations or, in the case of plantation management, by the divisional forest offices. The conservator would verify that work carried out conformed to appraisal specifications (project file) and would countersign the statements. For plantings, criteria for satisfactory estab- lishment and disbursement would be that the area had been weeded according to appraisal specifications after planting and a survival rate of 80% six months after planting. Documentation supporting this certificate, e.g. inspection reports and maps clearly identifying the areas treated with cross references to claimed expenditures, accounts and receipts would be retained by the Forest Department and made available for review during project supervision. Assurances were obtained that statements of expenditure would be audited annually by an independent auditor acceptable to IDA (see also para 4.48). H. Accounts and Audits 4.47 Each implementing agency would maintain separate proiect accounts in a readily identifiable form to enable them to be audited independently from overall accounts in a timely manner, The Project Director would be respon- sible for the consolidation of the accounts. The project accounts, in addi- tion to normal government cash-based entries, would record non-cash transac- tions (e.g. procurements under procedure III) For easy identification and monitoring, the classification of development expenditure would be similar to that of the project report or appraisal report. A general format for such proiect accounts has been agreed with the Auditor General (in project file) who has agreed to provide assistance in the design of the project accounts. Assurances were obtained that separate project accounts would be maintained -36- by the implementing agencies, and consolidated accounts by the Ministry of Lands and these accounts should be designed and presented for IDA approval by May 31, 1983. Such accounts should be designed in consultation with the Auditor General and be acceptable to him. 4.48 Project accounts would be audited annually by an independent auditor acceptable to IDA and in accordance with generally accepted auditing stand- ards. For this purpose, the Auditor General would be an acceptable auditor. Assurances were obtained that the project accounts would be submitted for independent audit, and to IDA, within four months of the fiscal year end and audited statements made available to IDA not later than eight months after the end of such year. The audit report would include a statement verifying that funds reimbursed by IDA against statements of expenditure had been used for the purposes of the project. V. ORGANIZATION AND MANAGEMENT A. Project Implementation 5.01 The project would be implemented by three executing agencies. The Forestry and Environment Division (Planning Unit) would be responsible for the Master Plan, the Forest Department for plantation activities and techni- cal training and the University of Sri Jayawardenepura for professional training under the project. Administratively, the Forest Department reports to the Ministry of Lands of which the Planning Unit is a division. The University falls under the aegis of the Ministry of Higher Education. 5.02 Overall, project implementation would be the responsibility of the Ministry of Lands and the Chief of the Planning Unit would be the Project Director, the official with whom the responsibility for project coordination procurement and reporting to IDA would be vested. The Project Director has already been designated and participated in the negotiations. The government budget for the project would be allocated to the Ministry of Lands from where funds would be administratively reallocated to the respective implementing agencies by the Project Director. This is in line with normal budget proce- dures and would contribute to strengthening the Project Director's authority. The Forest Department and the University of Sri Jayawardenepura would each appoint a coordinator for their respective project components. The project director (chairman), the conservator and the Chairman, Timber Corporation and the two project coordinators would form a Project Coordinating Committee, which could be called upon to meet by any of its members to deal with project matters of common interest. The project coordinators would supply quarterly progress reports to the Project Director, who would be responsible for the preparation of a joint quarterly progress report to be submitted to the government of Sri Lanka and to IDA. The reports would normally be due within the month following the end of the respective quarters. -37- 5.03 The Master Plan - The usefulness and implementation of the Master Plan could be compromised unless those affected by it are involved in its preparation and approval. As previously discussed (para 2.05 et seq.), a large number of agencies in different ministries are involved in forestry activities and, as a consequence, would be affected by the Master Plan. The government, therefore, has set up an Inter-ministerial Forestry Master Plan Steering Committee which is chaired by the Secretary of the Ministry of Lands and Land Development and includes as permanent members the chief executives of the Forest Department, the State Timber Corporation and the Land Commis- sioner (all under the Ministry of Lands), the Department of Wildlife Conser- vation (Ministry of State), the Ceylon Plywood Corporation, the National Paper Corporation (Ministry of Industry), the Ministries of Coconut and Rubber Industries, the Planning Division (Ministry of Finance), repre- sentatives of the ministries of Agriculture, Mahaweli Development,.Power and Energy and Higher Education, and any other permanent member or advisor that the government wishes to include. As the principal officer responsible for the Master Plan preparation, the director of the Planning Unit cum Project Director would be the Steering Committee's Secretary and the Unit its secretariate, responsible for the preparation of the meetings and for the presentation of the Master Plan progress reports (quarterly) for discussion at regular (quarterly) meetings during the Master Plan preparation. The Ministry of Lands and Land Development has informed IDA that the Inter-ministerial Forestry Master Plan Steering Committee has been estab- lished. Assurances were obtained that the committee would be maintained with a composition and terms of reference acceptable to IDA, and that it would meet at least quarterly. 5.04 Professional Training - The director for the two-year forestry course to be introduced under the project would be the coordinator at the Sri Jayawardenepura University referred to in para 5.02. His prime respon- sibility would be the implementation of the professional training component under the project. He would deal directly with the Project Director in matters concerning the project and would be a member of the Project Coor- dinating Committee.. For better coordination within the university and between the higher university and education authorities and the project, there would be a University Coordinating Committee. Its chairman. would be the chairman of the University Grants Commission cum Secretary of the Minis- try of Higher Education and the committee would include the Vice Chancellor, the Dean of the Faculty of Applied Sciences, the head of the Department of Botany, the university project coordinator (course director) and the Project Director. The committee would help solve potential conflicts between the project objectives and those of the education authorities and improve the decision making process as well as provide a forum for review and discussion of the implementation of the training component. -38- 5.05 Plantations and Technical Training - Both fall under the Forest Department. The Deputy Conservator of Forests, responsible for Planning and Development (see organizational chart at end of Report), has been appointed as the Forest Department's project coordinator. The inventory, planting and management activities and the technical training under the project would be implemented under the deputy conservators in charge of these respective subjects under the overall guidance of the conservator. The coordinator would monitor progress on the Forest Department's project component and with the conservator assure its effective implementation. He would be responsible for the preparation of quarterly progress reports. B. Staffing 5.06 For project implementation, additional staff would be hired for the Planning Unit, the Forest Department and their China Bay Technical College, and the University of Sri Jayawardenepura. The Planning Unit would require three professionals plus an accountant and an administrative officer and the Project Director plus support staff. A project and cost management account- ant and an administrative officer would need to be recruited by the Forest Department which also would need additional staff at the China Bay College. Although relying mainly on existing staff and consultants, the university would need to recruit a course director and support staff for the new course. Details of the staffing requirements are provided in Annexes 2-6. The Minis- try of Lands and Land Development has informed IDA that that essential staff positions for the Planning Unit, the Forest Department and the University of Sri Jayawardenepura had been included in the 1983 budget request. The fol- lowing would however be conditions to effectiveness: (a) Appointment of Project Director and the three desk officers in the Planning Unit; and (b) Appointment of project coordinators for the Forest Department and the University (course director). -39- C. Consultancy Services 5.07 Whenever possible, the project would use local consultants and exper- tise to complement project staff in the execution of the program. However, as explained previously, considerable foreign technical assistance would be required as follows: Master Plan Inventory 33 man-months Other 92 man-months Professional Training 38 man-months Plantations 55 man-months 218 man-months A company with terms of reference and team members satisfactory to IDA would be appointed with FINNIDA financing to provide the technical assistance services for the Master Plan and the plantation activities. The appointment of a consulting firm would be a condition to effectiveness. Draft terms of reference have been prepared and are available in the project file. The project would also finance the inventory expert who would be extended for 12 months in 1985. The senior planning advisor would lead and coordinate the consultant team. He would arrive in July 1983 ahead of the others and prepare a detailed work program for the Master Plan preparation and for the consultants which the Government would submit for IDA approval. A proposed scheduling of the consultancy services is provided in Chart 24241 at end of Annexes. 5.08 Technical assistance services for the professional training program would be in the form of visiting professors. They would be recruited either individually or through an agreement with a university qualified to provide the services. The total cost of technical assistance is estimated at US$ 2.5 M or US$ 11,300 per man-month including salaries, costs, fees, allowances and international travel. D. Training 5.09 In addition to the "formal" professional and technical training provided under the project (para 4.16 et seq.), there would be a considerable in-service training element. Under the plantation and silvicultural advisors, supervisory staff and workers would be learning appropriate nurs- ery, planting and plantation management techniques. The silvicultural advisor will provide training in the planning and execution of research and trials schemes. The fire protection advisor will train Forest Department professional staff and fire crews in fire avoidance and extinguishing. These and the other experts would have as part of their terms of reference to -40- provide short training workshops for Forest Department and Timber Corporaton staff in their respective fields. Each expert would be allocated counter- parts with the specific objective of transfer of experience. The deputy conservator in charge of training in the Forest Department would be respon- sible, in consultation with the senior planning advisor, to coordinate the consultants' training activities and to prepare a program for this purpose. E. Monitoring and Evaluation 5.10 The Planning Unit would be responsible for the monitoring of overall project progress based on information provided by the implementing agencies. The monitoring and evaluation officer in the unit would have the prime responsibility to acquire and process relevant information and to prepare periodical reports. For all project components, the monitoring would focus on progress with civil works contracting and construction, procurement of equipment and materials, progress with consultancy services (man-months and reports), comparing actual implementation dates and costs with original appraisal estimates and, where applicable, with revised estimates. 5.11 The University of Sri Jayawardenepura, in addition, would collect, analyze and provide information on: (a) the number of applicants, number accepted and enrollment at the beginning of each academic year; (b) the number of graduates who have completed the course within the prescribed duration of the course, compared with the original intake; (c) the number of graduates employed by the Forest Department, Timber Corporation, the University or in other forestry activities within six months, one year and two years after graduation; (d) the occupation of those who have benefitted from scholar- ships under the project for postgraduate studies abroad; and (e) the staffing situation, including qualifications and turn- over. 5.12 The Forest Department would collect data on plantation activities, including areas planted, weeded, and managed, compared to project targets, survival rates, nursery production, unit and total cost of these activities compared to appraisal estimates; progress on area covered by inventory and management plans with implementation of the latter and staffing positions including the level of forestry training received. Particular efforts would -41- be made to monitor elephant, cattle and fire damage of plantations and the success of the fire protection program. In addition, less frequently, data would be collected on the growth performances of plantations. For the China Bay Technical College, the information to be provided would include the number of students (Forest Department staff) who complete the various courses compared to enrollment and the staff situation. 5.13 The Planning Unit would provide key indicators on the progress of the preparation of the Master Plan and the five-year investment program, includ- ing meetings ot the Forestry Master Plan Coordinating Committee. The analytical cost accounting system to be introduced at the Forest Department (para 4.14) and the forestry data bank to be created in the planning unit (para 4.15) under the project together with the separate and improved project accounts would provide a major input into the monitoring and evaluation system. Monitoring reports would be part of the quarterly progress reporting (para 5.02). VI. PRODUCTION, MARKETS AND PRICES A. Yields and Production 6.01 Industrial Plantations. There is sufficient evidence from planta- tions and provenance trials in Sri Lanka, as well as from other countries with comparable geoclimatic environment, to make reasonable estimates of growth rates for the species chosen for the plantation project. Given suitable planting stock, thorough ground preparation and proper crop culture particularly weeding, as under the project, a minimum mean annual increment of 15 m3/ha can be expected from eucalypts and light hardwoods should also reach this figure, both in 20-year rotations. For teak, an annual increment of 7 m3lha in a 40-year rotation has been assumed. These estimates are considered conservative for eucalypts and reasonable for teak and light hardwoods. Volume yield data used are provided in Annex 9, Table 3. It has been assumed that eucalypts and light hardwoods would be thinned at years 5, 10 and 15. The thinnings would produce firewood, construction and telepoles (eucalyptus only), and sawlogs as shown in the annex tables. Teak would be thinned at years 1-0, 15, 20 and 30 producing similar products. Under these assumptions, the industrial plantations under the project would produce, in total over their lifetime, 2.4 M m3 of wood of which about I M m3 would be sawlogs. 6.02 Management of Teak Plantations. The incremental production from the plantation management under the project is much more difficult to estimate. For teak planted under the project, the average yield of a thinning is assumed to be about 20 m3/ha. If one allows 50% for lack of management, then the total production during the project period from the thinnings of 10,000 ha teak would be 0.1 M m3 wood, mainly as poles and firewood. In addition to the output obtained from the periodical thinnings, benefits would also arise -42- through the rapid growth in dimensions of the remaining standing trees due to the increase in space, light and nutrient availability which would reduce the rotation period as much as from 50 to 40 years. 6.03 Silvicultural Treatment of Young Stands. If the 15,000 ha of young teak, mahogany and pine plantations assumed capable of rehabilitation under the project were to be given no treatment, available evidence from the mis- sion's field visits suggests that these would produce nothing. It is recog- nized, however, that growth subsequent to the treatments may not be as fast as that resulting from the standard weeding regime initiated from the date of planting. It has been assumed that treated teak plantations would show a mean increment of 5 m3/yr in 35 years from the time of the first rehabilita- tion weeding, mahogany 10 m3/yr also over 35 years and pine 12 m3/yr over 25 years. On this basis, and assuming 9,000 ha teak, 4,500 ha pine and 1,500 ha mahogany treated, the total production as a result of the treatment may be estimated at 3.5 M m3 of wood. 6.04 Harvesting of Over-mature Stands. With an estimated stocking of 300 m3/ha, this project activity would provide 60,000 m3 of wood annually over five years of the project period, totalling 0.3 M m3. By replanting the area with fast-growing species with annual increments of 20 m3/ha -- as may be expected in the Wet Zone -- the project would, in addition, provide, in total, 0.4 M m3 of wood over a 20-year rotation period. B. Markets 6.05 There would be no difficulty in finding markets for the increased wood production due to the project. The immediate production due to the project -- 60,000 m3/yr from mature plantations of which about 60% sawlogs, and 20,000 m3 per year from teak thinnings mainly as poles -- would find a ready market either substituting for imports which would otherwise be neces- sary (para 2.21) or, alternatively, supplying building poles, transmission poles or fuelwood needs. The existing well-developed marketing organizations of the Timber Corporation and the private sector would have no difficulty in handling these relatively small quantities. 6.06 The future output from thinnings and final harvesting in 20-years time of the bulk ot plantations that would be established under the project would fill only part of a projected future wood deficit. Eucalyptus output would be used for low grade construction lumber and for transmission poles and fuelwood. The wood utilization consultant under the project would advise on the utilization of plantation grown woods, particularly on the use of eucalypt which is not yet utilized for timber in Sri Lanka, but which is employed elsewhere, e.g. in South Africa and Zambia. -43- C. Prices 6.07 Wood prices in Sri Lanka (Annex 10, Table 3) are at about world levels. Common luxury grades (teak, mahogany) sell at about Rs 8,000 (US $400) per m3 and domestic utility timber sells at between Rs 3,500 (US $180) and Rs 5,500 (US $290) for common dimensions. For comparison, the average ex port cost of utility timber imported in 1981 was US $240 per m3. However, as the quality of domestically produced sawnwood is comparatively poor, the Timber Corporation was able to sell imported timber at US $350 per m3. In all financial calculations, prevailing market prices in Sri Lanka have been used. D. Impact on Government Budget 6.08 The overall budgetary impact of the project during the investment period would be positive as may be seen in Table 6.1 below. This is due to the revenues obtained from the harvesting of mature stands and the thinning operations under the project. Table 6.1: PROJECT IMPACT ON GOVERNMENT BUDGET (million Rupees at current prices) 1983 1984 1985 1986 1987 1988 Total Prolect Costs 4.7 73.1 59.3 49.9 54.1 74.5 315.6 Project Net Revenues - 87.6 99.4 138.4 152.3 167.6 645.3 Of which: Taxes and royalties - 50.9 57.8 79.3 87.3 96.0 371.3 Timber Corporation a/ - 36.7 41.6 59.1 65.0 71.6 274.0 Balances Overall Government b/ -4.7 14.5 40.1 88.5 98.2 93.1 329.7 Direct budget effect c/ -4.7 -22.2 -1.5 29.4 33.2 21.5 55.7 a/ Contribution to fixed costs and net profits of the Timber Corporation (See Annex 11, Tables 1-3). b/ Total net revenues less project costs. c/ Taxes and royalties less project costs. -44- 6.09 After the completion of the project in 1988, the Government would have to finance the weeding costs of the industrial plantations in 1989 and 1990 and plantation maintenance thereafter. These costs amount to about Rs 23 M (US $1 M) in 1989, Rs 15 M (US $0.7 M) in 1990; and thereafter in 1990 prices, Rs 8 M (US $0.4 M) annually. However, revenues expected from thin- nings of the plantations would render the overall balance positive again from 1991 onwards during the rotation period of the plantations. VII. BENEFITS AND JUSTIFICATION A. Project Benefits 7.01 Wood Production - The direct quantifiable benefits of the project would be the increase in wood production of 7.3 M m3, distributed over the rotation period of plantations established or upgraded under the project. This is equivalent to an increase in the annual wood supply of about 320,000 m3, of which about 40% would be sawlogs, about 35% pole wood, and the remainder firewood. Stated otherwise, the market value of the total incremental output due to the project would be almost Rs 9 B (US $420 M) in 1982 prices. On an annual basis, this represents nearly Rs 390 M (US $18 M) over the rotation period of the crops. 7.02 Employment Creation - The project would create about 2.7 M man-days of employment for the rural poor in the project area, spread over a five-year period, generating them an aggregate income of about Rs 66 M. Based on four months work during the monsoon, this would provide jobs for 5,000 laborers whose incomes would average Rs 2,600 during this period. 7.03 Transfer of Experience - The technical assistance program under the project would help in transferring the latest forestry technologies and knowledge to Sri Lanka, providing the country with a planning framework and thus render her forestry operations more efficient to the ultimate benefit of the whole population. The emphasis under the project placed on proper plant- ing and forest management techniques and practices would not only benefit the project plantations, but have spin-off effects on the whole plantation program. The trial and research program would result in new fast-growing species' provenances and plantation techniques better suited to Sri Lanka's environment. For every percent of yield improvement or of plantations saved from destruction by fire or weeds, about Rs 37 M (US $1.8 M) would be saved per year at the present levels of plantings, which would pay back the total cost of the technical assistance program in two years. 7.04 Foreign Exchange Savings - The value of the incremental annual wood production under the project, US $18 M, would be roughly equivalent to the -45- foreign exchange saved by not having to import corresponding quantities of wood. The training of professional foresters in Sri Lanka rather than in Europe or in the USA -- which are the main options since regional training facilities lack the necessary capacity -- would result in a gross foreign exchange saving of US $15,000 per student year, or for 15 students following two-year courses, the annual foreign exchange savings would be US $450,000. During the project period, the annual cost of foreign visiting lecturers, US $76,000, would have to be deducted, but these costs would gradually decline as the number of local, qualified professors increases as a result of the prolect's professional training program and scholarships provided for postgraduate studies abroad. 7.05 Environmental Impact - By planting abandoned chena lands in the dry zone with trees and by saving large areas of existing plantations from suf- focation under weed growth, the project would have an important positive impact on the microclimate, flora, fauna and general environment in the project areas. The project would contribute towards arresting the deforesta- tion of the country and, as a consequence, help relieve the pressure on wood extraction from erosion-prone water catchment areas so important to Sri Lanka's social and economic welfare. B. Economic Analysis 7.06 Economic Rate of Return - The economic rate of return of the industrial plantation project (42% of project costs) is 20%. The individual tree species' rates of return range from 15 to 23 as shown in Table 7.1 below: Table 7.1: ECONOMIC RATE OF RETURN percent Eucalyptus contract 20 chena 23 Hardwood contract 19 chena 21 Teak contract 15 chena 16 Total Industrial Plantations 20 7.07 No attempt has been made to calculate a precise economic rate of return to plantation management activities under the project (18% of costs) due to the speculative nature of the results. The rate of return of these -46- activities, however, is much higher than for the industrial plantation project due to the small incremental and large sunk costs in such plantations combined with large benefits. The remainder of project costs (40%) are for training, research and technical assistance and have, therefore, not been included in the rate of return calculations. However, even if charged with the total project costs, the rate of return of the industrial plantations would remain above the assumed 12% opportunity cost of capital in Sri Lanka. 7.08 All values are in 1982 constant prices. The economic analysis has been made in border Rupees, with international prices converted to Rupees at the exchange rate of US $1 = Rs 21. Local costs, including labor, have been converted to border Rupees by applying a standard conversion factor of 0.8. The market rate for labor (51% of total plantation establishment costs) has conservatively been taken as Rs 25 per man-day which has, because most of the labor is employed during the monsoon when opportunity costs are h'gh, also been assumed to be the economic cost. Traded goads and services have been valued on the basis of their c.i.f. import prices. Prices and conver- sion factors used are shown in Annex 10. 7.09 Sensitivity Analysis - As summarized in Table 7.2 below, there is little sensitivity to changes in most variables. If the eucalyptus species grown under the project were not to be accepted by the market as sawn timber, and if that part had to be sold as firewood, the rate of return would still remain acceptable at 17%. The rate of return does not fall below the oppor- tunity cost of capital of 12% even under such unlikely conditions as a 10 year lag in benefits, which is equivalent to an increase in the rotation period of eucalyptus and hardwoods to 30 years and teak to 50 years and, at the same time, a reduction in the mean annual increments for eucalyptus and hardwoods trom 15 to 10 m3 and for teak from 7 to 5.6 m3. Also in the equally unlikely case that no benefits at all would be derived from thinnings of the plantations, the rate ot return would remain well above 12. This case would also imply that the mean annual increments for eucalyptus/hardwoods and teak respectively only attained 9.5 and 4.5 m3. -47- Table 7.2: SENSITIVITY ANALYSIS Switching Values Total Industrial Plantations Total benefits, prices or yields -68% Total costs 212% Eucalyptus, Contract Total benefits, prices or yields -68% Total costs 215% Hardwoods, Contract Total benefits, prices or yields -61% Total costs 154% Teak, Contract Total benefits, prices or yields -43% Total costs 77% Economic Rate of Return Total Plantations: Base Case 20% Total benefits, wood prices or yields down 10% 19% down 30% 18% lagged 5 years 15% " 10 years 12% Total costs up 50% 17% No benetits from thinnings 16% tucalyptus sawlog output sold as firewood 17% 7.10 Project Risks - The project faces no major risks. The principal risk would be that there is little or no improvement in the quality of plantations under the project. By providing technical assistance and including funds for the weeding of the young project plantations (the major factor in the poor quality of existing plantations) while, at the same time, seeking the Govern- ment's assurance that such weeding would be carried out (para 4.24), this risk has been minimized. Another risk is damage caused to the plantations by fire or animals or, rather remote, cyclones. By providing fire protection, planting teak outside normal feeding areas and migrating routes for elephants and by tinancing a study on free-ranging cattle and providing guards for the young plantations, the project seeks to reduce these risks. As indicated by -48- the sensitivity analysis, the project could support rather heavy damage and still remain economic. Since the eucalypts grown under the project are not presently used for sawn timber in Sri Lanka, there is a certain risk of market resistance. The wood utilization, industry and logging consultants provided under the project woulld advise on the handling and usage of eucalypts, which would minimize this risk. However, as shown in the sen- sitivity analysis, even in the worst case, where the eucalypt saw logs would have to be sold as firewood, the economic rate of return would remain satis- tactory. VIII. AGREEMENTS AND RECOMMENDATIONS 8.01 During negotiations Assurances were obtained from the Government that: (a) The University would prepare a training program for the scholarships tor IDA review by December 31, 1983 (para 4.18). (b) The Project Director, with the assistance of the Senior Planning Advisor, would prepare a program for short term study tours abroad for professional forestry statf and present it tor IDA review before December 31, 1983 (para 4.18). (c) The prescribed maintenance would be carried out on plan- tations under the project and that a program for such maintenance would be prepared annually by the Forest Department (para 4.24). (d) Thinnings would be an integral part of the working plans and that those marked under the proiect would actually be cut and carried out (para 4.28). (e) The Forest Department would prepare annual programs for silvicultural treatment under the project for IDA review, supported by 1:25000 scale maps for easy identification ot these areas. A first such program would be presented to IDA by June 30, 1983 (para 4.31). (f) The socioeconomic study following terms of reference satisfactory to IDA would be presented to IDA by June 30, 1984 and that, after consultation with the -49- people concerned, an appropriate course of tollow-up action would be discussed and agreed with IDA (para 4.38). (g) A soil/site survey would be carried out for the plantation area and be presented for IDA review by June 30, 1984 (para 4.39). (h) Statements of expenditure would be audited annually by an independent auditor acceptable to IDA (para 4.46). (i) Separate project accounts would be maintaned by the imple- menting agencies and consolidated accounts by the Ministry of Lands, and that these would be designed and presented tor IDA approval by May 31, 1983 (para 4.47). (1) Project accounts would be submitted for independent audit, and to IDA within four months of the fiscal year end and audited statements made available to IDA immed- iately thereafter (para 4.48). (k) The audit report would include a statement verifying that funds disbursed by IDA against statements of expenditure had been used for the purpose for which they were provided (para 4.48). (1) That the Inter-Ministerial Forestry Master Plan Steering Committee would be maintained with a composition and terms of reference acceptable to IDA and would meet at least quarterly (5.03). 8.02 Conditions to effectiveness would be: (a) Co-financing arrangements satisfactory to IDA (para 4.42). (b) Appointment of Project Director and the three desk officers in Planning Unit (para 5.06). (c) Appointment of Project Coordinators for the Forest Department and the University (para 5.06). (d) Appointment of consulting firm for the Master Plan and plantation activities (para 5.07). 8.03 With the above assurances and covenants, the project would be suitable for an IDA credlt of SDR 8.5 M (US $9.0 M) to the Government ot Sri Lanka. SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Average Monthly Rainfall for Selected Sites in Sri Lanka For the Period 1931 - 1960 (mm) Zone Site Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total Wet Lowland Colombo 88 96 118 260 353 212 140 124 153 354 324 175 2,395 Wet Lowland Kalutara 113 101 148 310 401 248 169 152 200 392 34Z 209 2,787 Wet Lowland Ratnapurna 151 181 244 341 494 463 307 328 315 498 354 214 3,888 Wet Midland Kandy 118 83 120 188 190 185 154 142 122 276 250 211 2,022 Wet Upland Nurawa Eliya 145 76 97 154 237 266 223 180 165 222 209 191 2,163 Intermediate Kurunegala 98 60 170 263 197 163 112 115 109 330 281 177 2,075 Dry Lowland Jaffna 97 37 30 70 63 16 17 31 47 244 411 267 1,329 Dry Lowland Anuradhapura 123 54 99 187 100 13 32 47 70 233 248 242 1,447 Dry Lowland Kantalai 234 107 58 145 84 12 53 102 93 190 308 376 1,762 Dry Lowland Batticaloa 279 178 85 72 31 19 38 62 48 178 285 430 1,705 Dry Lowland Hambantota 101 58 66 109 121 55 43 42 45 126 185 121 1,075 Source: Report on the Colombo Observatory for 1966, Colombo, Sri Lanka F- M. tD >C I- t'i SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Master Plan - Capital Cost (Rs '000) 1983 1984 1985 1986 1987 1988 Total FE Unit Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost (x) 1. Planning Unit (PU) Vehicles 4 x 4 Station Wagon 250 - - 3 75.0 _ - _ _ _ _ _ 3 750 (95) Subtotal - _ - 750 _ _ _ _ _ - 750 (95) Equipment Typewriter 10 - - 3 30 - - - - - - - - 3 30 (54) Calculator (pocket) 2.2 - - 5 11 - - - - - - - - 5 11 (45) Calculator (program) 22 - - 2 44 - - - - _ _ _ _ 2 44 (45) Telephone 3 - - 5 15 - - - - - - - - 5 15 (54) Air Conditioner 37 - - 5 185 - - - - - - - - 5 185 (34) Photocopier 100 - - 1 100 - - - - - - - - 1 100 (54) Refrigerator 11 - _ 1 11 - - - _ - - _ - 1 11 (31) Subtotal - - - 396 - - - - - 396 (47) Office Furniture Desk (large) 8 - - 8 64 - - - - - - - - 8 64 (-) Desk 5 - - 6 30 - - - - - - - - 6 30 (-) Chair 3 - - 8 24 - - - - - - - - 8 24 (-) Chair 2 - - 38 76 - - - - - - - - 38 76 (-) Filing Cabinet 3 - - 20 60 - - - - - - - - 20 60 (-) Table 3 - - 9 27 - - - - - - - - 9 27 (-) Bookcase 2 - - 20 40 - - - - - - - - 20 40 () Conference Table 10 - - 1 10 - - - - - - - - 1 10 (-) Lamp 2 - - 10 20 - - - - - - _ - 10 20 (-) Subtotal - - - 351 - - - - - - - - - 351 (0) TOTAL 1,497 1,497 (60) 2. Inventory .... Vehicles 4 x 4 Station Wagon 250 - - 5 1,250 - - - - - - - - 5 1,250 (95) TOTAL Base Cost - - - 2,747 - - - - - - - - 2,747 (76) 1 - 52 - ANNEX 2 Table 2 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Master Plan Technical Assistance Cost (Rs '000) 1983 1984 1985 1986 Total (FE%) Planning Unit Senior Planning Advisor 1,583 2,762 2,909 1,558 8,812 (84) Economist - 2,891 1,558 - 4,449 (84) Data Processing Expert - 752 - - 752 (81) Industry Expert - 752 - - 752 (81) Logging Expert - 752 - - 752 (81) Forest Utilization Expert - 752 - - 752 (81) Management Accountant - 1,407 - - 1,407 (82) Five-year Investment Program a/ - - 4,821 - 4,821 (81) Subtotal 1,583 10,068 9,288 1,558 22,497 (83) Forest Inventory Inventory Expert b/ - - 2,993 - 2,993 (84) Forest Management Expert - 2,981 1,558 - 4,449 (84) Photo Interpreter - 752 - - 752 (81) Subtotal - 3,643 4,551 - 8,194 (84) TOTAL Base Cost 8 1982 Prices 1,583 13,711 13,839 1,558 30,691 (83) a/ For experts. b/ FAO project fund would cover until the end of 1984. SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry I) Master Plan - Local Staff Cost: Planning Unit (Rs '000) a/ Annual 1983 1984 1985 1986 1987 1988 Salary Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost Staff Salaries Director 44 1 22 1 44 1 44 1 44 1 44 1 44 242 Planning Officer 38 1 19 1 38 1 38 1 38 1 38 1 38 209 M & E Officer 26 1 13 1 26 1 26 1 26 1 26 1 26 143 Data Bank Officer 26 1 13 1 26 1 26 1 26 1 26 1 26 143 Project Accountant 26 1 13 1 26 1 26 1 26 1 26 1 26 143 Administrative Officer 26 1 13 1 26 1 26 1 26 1 26 1 26 143 Secretary 15 2 15 2 30 2 30 2 30 2 30 2 30 165 Clerks, etc. b/ 12 6 36 6 72 6 72 6 72 6 72 6 72 396 Office Messengers, etc. c/ 8 8 32 8 64 8 64 8 64 8 64 8 64 352 Driver 10 - - 3 30 3 30 3 30 3 30 3 30 150 Total Salaries 176 382 382 382 382 382 2,086 Travel Allowance @ 10% of Salaries - - 18 - 38 - 38 - 38 - 38 - 38 208 Total Base Cost for Salaries and Travel Allowance - - 194 - 420 - 420 - 420 - 420 - 420 2,294 a/ Proiect would start in mid-1983. h/ Including one programmer and one draughtsman. c/ Three watchers, 2 kks, 1 messenger and 2 couriers. ANNEX 2 Table 4 - 54- SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Master Plan - Local Staff and Labor Cost: Forest Inventory (Rs '000) Annual 1983 a/ 1984 1985 1986 1987 1988 Salary Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost Staff Salaries b/ Project Accountant FD- b/ 26 1 13 1 26 1 26 1 26 1 26 1 26 130 Administrative Officer FD- 26 1 13 1 26 1 26 1 26 1 26 1 26 130 Inventory Officer (DC) 38 - - - - 1 38 1 38 1 38 1 38 152 Inventory Officer (ACF 26 - - - - 1 26 1 26 1 26 l 26 104 Inventory Officer (ACF 26 - - - - 1 26 1 26 1 26 1 26 1( 4 Crew Leader c/ 12 - - - - 20 240 - - - - - - 24U Assistant Crew Leader d/ 10 - - - - 20 200 - - - - - - 200 Draftsman d/ 14 - - - - 4 56 4 56 4 56 4 56 224 Data Input Operator d/ 10 - - - - 4 40 4 40 4 40 4 40 160 Photo Interpreter dF 15 - - - - 4 60 4 60. 4 60 4 60 24U Secretary 15 - - - - 1 15 1 15 1 15 1 15 60 Office Messenger 8 - - - - 3 24 3 24 3 24 3 24 96 Driver e/ 10 - - - - 3 30 3 30 3 30 3 30 120 Total Staff Salary - - 26 - 52 - 807 - 367 - 367 - 367 1,986 Travel allowance and overtime @ 33% of total salaries - - 9 17 - 266 - 121 - 121 _ 121 655 Subtotal - Salaries and Allowances - - 35 69 - 1,073 - 488 - 488 - 488 2,641 d/ Wages (Rs 25/md) - - - - 20.8L 520 - - - - - - 520 TOTAL Base Cost - - 35 69 1,593 - 488 - 488 - 488 3,161 a/ Six months in 1983. b/ To handle all Forest Departmet Project activities. c/ The FAO/UNDP sponsored project currently employs 18 crew leaders and 9 assistant crew leaders. In addition, two crew leaders and 11 assistant crew leaders will be employed by the project in 1984 and 1985. d/ Two draftsmen, two data input operators and 2 photo interpreters will be employed in 1984 in addition to the two each currently employed. e/ Five additional drivers will be employed in 1984. In 1986, seven drivers will be transferred to field operations. f/ 1000 Mandays. SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Master Plan - Operating and Maintenance Costs (Rs '000) 1983 a/ 1984 1985 1986 1987 1988 FE Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost (x) 1. Forest Inventory Vehicle Operating Cost b/ - - 10 800 10 800 3 240 3 240 3 240 2,320 (50) Office Expenses - - - 30 - 25 - 15 - 15 - 15 100 - Subtotal -830 825 255 255 255 2,420 (48) 2. Planning Unit Vehicle Operating Cost b/ - - 3 240 3 240 3 240 3 240 3 240 1,200 (50) Office Expenses c/ - 20 - 80 - 20 - 20 - 20 - 20 180 - Office Rental - - - 200 - 200 - 200 200 - 200 1l000 - Subtotal 20 520 460 46060 0 460 2,380 (25) TOTAL Base Operating Cost 20 1,350 1,285 715 715 715 4,800 (37) a/ Project starts at mid-year b/ @ Rs 4.00/km, 20,000 km/yr c/ Including electronic data processing cost ID X SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT MASTER PLAN P'REPARATION COST (TOTAL COST IN RS '000) YEAR 1983 1984 1985 1986 1987 1988 TOTALS VEHICLES -2000 - --2000 EQ0U IP MEN T -396 ----396 OFFICE FURNITURE 351 - ---35 1 TECHNICAL ASSISTANCE, MP 1583 10068 9288 1558-- 22497 TECHNICAL ASSISTANCE, IN - .3643 4551-- - 8194 Ln ST UDT IES -1000 200 200 --1400 LABOUR, INVENTORY - 520 -- - - 520 STAFF, PLANNING UNIT 194 420 420 420 420 420 2295 STAFF, INVENTORY 35 69 1.073 488 488 488 2641 OPERATING 9 MAINTENANCE 20 1350 1285 715 715 715 4800 BASE COST 1831 1.9297 17338 3381 1623 1623 45094 PHYSICAL CONTINGENCIES 12 92 139 81 81 81 487 PRICE CONTINGENCIES 208 4216 5890 1715. 1161 1401 14591 TOTAL. COST 2052 23605 23366 5178 2865 3106 60172 0' x - 57 - ANNEX 3 SRI LANKA Table 1 FORESTRY RESOURCES DEVELOPMENT PROJECT (Forestry 1) Professional Training - Total Cost (Rs '000) 1983 1984 1985 1986 1987 1988 FE Unit Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost (Z) 1. Civil works Lecture theatre (7200 sq ft e Rs 280 sq ft) - - - - 3,450 - - - - - - - - 3,450 (25) Greenhouse (600 sq ft S Rs 200/sq ft) - - _ - - - 74 - - - - - - 74 (25) Subtotal - 3,450 74 - - - 3,524 (25) 2. Vehicles 4 x 4 vehicle 210 - - 2 420 - - - - - - - - 420 (95) Minibus 250 - - 1 250 - - - - - - - - 250 (95) Station wagon 250 - - 1 250 - - - - - - - - 250 (95) Subtotal - 920 - - - - 920 (95) 3. Equipment and Materials Lab and office equipment - - 118 - 1,600 - - - - - - - - 1,718 (95) Field and cap equipment - - - - 703 - - - - - - - - 703 (95) Glassware and accessories - - - - 162 - - - - - - - - 162 (95) Chemicals - - - - 101 - - - - - - - - 101 (95) Books and journals - - - - 210 - - - - - - - - 210 (95) Subtotal 118 2,776 - - - - 2,894 (100) 4. Operating Cost Vehicles (20,000 kl/yr e Rs 4.00/km) - - - 4 320 4 320 4 320 4 320 4 320 1,600 (44) Maintenance of equipment - - - - 40 - 40 - 40 - 40 - 40 200 (65) Office and lab expenses - - 60 - 85 - 85 - 85 - 85 - 85 485 (50) Maintenance of buildings @ 2.52 - - - - 87 88 - 88 - 88 - 88 439 (25) Subtotal - 60 532 533 533 533 533 2,724 (43) 5. Staff Salaries Course director 60 1 60 1 60 1 60 1 60 1 60 1 60 360 (0) Secretary Class I 15 - - 1 15 1 15 1 15 1 15 1 15 75 (0) Secretary Class II 12 1 12 1 12 1 12 1 12 1 12 1 12 72 (0) Technician 12 - - 1 12 1 12 1 12 1 12 1 12 60 (O) Bookkeeper 9 1 9 1 9 1 9 1 9 1 9 1 9 54 (0) Office laborers 8 1 8 3 24 5 40 5 40 5 40 5 40 192 (0) Lab assistant 10 - - 1 10 1 10 1 10 1 10 1 10 50 (0) Drivers 10 - - 4 40 4 40 4 40 4 40 4 40 200 (0) Subtotal 89 182 198 198 198 198 1,063 (0) 6. Travel Allowance e 5% of staff salaries 4 9 10 10 10 10 53 (0) 7. Contract Lecturers Local consultants 120 - - 2 240 2 240 2 240 2 240 2 240 1,200 (0) Visiting lecturer (local - per hour) 125 - - 400 50 400 50 400 50 400 50 400 50 250 (0) Foreign consultants (per month) 210 - - 8 1,680 8 1,680 - 1,680 - - - - 5,040 (83) Visiting foreign lecturer (per month) 210 - - 2.8 588 2.8 588 2.8 588 2.8 588 2.8 588 2,940 (83) Scholarships (4 X 2 yrs B Rs 315,000/yr) - - - - - 2 630 2 630 2 630 2 630 2,520 (100) Study Tours a/ _ 210 210 210 210 210 1.050 Subtotal 2,768 3,398 3,398 1.718 1,718 13,000 (76) TOTAL Base Cost 271 10,636 4,213 4,139 2,459 2,459 24,178 (62) _.._._ , ___. ..... ----- , ____ ..... 1 ...... (.76 Physical Contingencies 18 676 61 53 53 53 914 Price Contingencies 40 2,878 1,501 1,895 1,514 1,828 9,656 TOTAL COST 329 14,190 5,775 6,087 4,026 4,340 34,748 . .. . , ., ~~~~~~~~..... --- ..... ..... ....... _ 11 Under Project Director's budget for professional forestry staff. Note: Totals may not add up due to rounding. - 58 - ANNEX 3 Table 2 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT China Bay Forestry College Expansion and Rehabilitation (RB '000) 1983 1984 1985 1986 1987 1988 Total FE Unit Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Unit Cost (%) 1. Civil Works New Buildings Student hostel (5200 sq ft at Rs 175/sq ft) 1 910 - - - - - - - - 1 910 Junior staff houses (1000 sq ft at Rs 135/sq ft) - - - 3 405 9 1,215 2 270 - - - - 14 1,890 Rehabilitation existing buildings - - - 297 - - - - - - - - - 297 Subtotal _ 1,612 1,215 270 - - 3,097 (25) 2. Vehicles 4 x 4 vehicle 210 - - 2 420 - - - - - - - - 2 420 Minibus 250 - - 2 500 - - - - - - - 2 500 Subtotal - 920 - - - - - - - - 920 (95) 3. Equipment and Furniture Furniture - - - - 250 - 200 - 25 - - - - - 475 (0) Electrical appliances - - - - - - 100 - 75 - - - - - 175 (95) Lab and office equipment - - - - 360 - - - - - - - - - 360 (95) Field and camp equipment - - - - 880 - - - - - - - - - 880 (95) Chemicals - - - - 20 - - - - - - - - - 20 (95) Books - - - - 75 - - - - - - - - - 75 (80) Subtotal 1,585 300 100 - - 1,985 (72) 4. Operating Expenses Vehicles (20,000 km/yr pr vehicle @ Rs 4/km) - - - 4 320 4 320 4 320 4 320 4 320 - 1,600 (44) Office expenses - - - - 24 - 24 - 24 - 24 - 24 - 120 (20) Maintenance of buildings (2.51) - - - - 40 - 71 - 77 77 - 77 252 (25) Subtotal @ 2.51)-=38-4 772 1 - 421421 421 2,062 (40) 5. Staff Salaries Permanent staff - - - - 299 - 299 - 299 - 299 - 299 - 1,495 (0) Visiting lecturer (@ Rs 200/hr) - - - 160 32 160 32 160 32 160 32 .160 32 - 160 (0) Travel allowance (@ 3% of permanent staff salaries) - - - - 9 9 9 9 9 45 (0) Subtotal _ 340 340 340 340 340 1,700 (0) TOTAL Base Cost - 4,841 2,270 1,131 761 761 9,764 (40) Physical Contingencies 339 172 58 21 21 611 Price Contingencies 1,443 1,200 761 639 771 4,814 TOTAL COST 6,623 3,642 1,950 1,421 1,553 15,189 - 59 - ANNEX 4 Table 1 SRI LANKA FORESTRY RESOURCES DEVELOPMENT PROJECT Industrial Plantation Capital Cost - Eastern Area (Rs '000) Unit 1i84 1985 1986 1987 1988 Total FE Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost (x) 1.- Buildings (a) Nursery Forest rangers 251 1 251 1 251 house Forest guards 97 1 97 1 97 house Office-cum-store 100 1 100 1 100 Pump house 40 1 40 1 40 Pottery shed 100 1 100 1 100 Water tank 36 1 36 1 36 (b) Plantation Sites ACF house 359 1 359 1 359 Forest rangers 251 1 251 1 251 2 502 house Forest guards 97 1 97 i 97 1 97 1 97 4 388 house Permanent lab house 82 - - 1 82 1 82 1 82 1 82 4 328 Subtotal Buildings 1,331 430 179 179 82 2,201 (25) 2. Vehicles (a) -Nursery Motorcycles 25 1 25 - - - - - - - - 1 25 (b) Plantation Sites 7-ton lorry 630 1 630 - - - - - - - - 1 630 90 HP farm tractor 650 1 650 - - - - - - - - 1 650 Trailer 30 1 30 - - - - - - - - 1 30 (c) Field Officers Pickup 210 2 420 - - - - - - - - 2 420 4 x 4 vehicle 210 1 210 - - - - - - - - 1 210 (d) Protectiod Motorcycles - 25 1 25 - - - - - - 1 25 Subtotal Vehicles 1,990 1,990 (95) 3. Equipment (a) Nursery Water pump 30 2 60 2 60 (90) Tools LS 10 - 10 15 - 15 - 20 - 70 (20) (b) Plantation Sites Survey inst. LS 30 5 5 5 5 LS 50 (90) Tools LS 10 10 15 15 20 LS 70 (20) Subtotal Equipment 110 25 35. 35 45 250 (51) 4. Fire Protection Equipment - Fire tower 10 - - 1 100 1 100 (10) - Radio network 50 1 50 - - 1 50 (90) - Portable pump 40 2 80 1 40 2 120 (90) - Water fank 40 2 80 - - 2 80 (55) - Tools LS 50 - 20 - 20 - 30 - 30 - i50 (20) - Fire finder 25 - - - 25 - - - - - - - 25 (9U) Subtotal Fire Protection 260 185 20 30 30 525 (49) TOTAL Base Cost 3,691 640 234 244 157 4,966 (55) - 60 - Alj,EX 4 Tab.2 2 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Industrial Plantation Capital Cost - Southern Area (Rs '000) Unit 1984 1985 1986 1987 1988 Total FE Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost % 1. Buildings (a) Nursery Forest rangers house 251 1 251 - - - - - - 1 251 Forest guards house 97 1 97 - - - - - - - - 1 97 Office-cum-store 65 1 65 - - - - - - - - 1 65 Pump house 40 1 40 - - - - - - - - 1 40 Potting shed 70 1 70 - - - - - - - - 1 70 Water tank 20 1 20 - - - - - - - - 1 20 (b) Plantation Sites ACF house 359 1 359 - - - - - - - - 1 359 Forest rangers 251 1 251 - - - - - - - - 1 251 house Forest guards 97 1 97 1 97 - - - - - - 2 194 house Permanent lab house 82 1 - 1 82 - - 1 82 - - 2 164 Subtotal Buildings 1,250 179 - 82 - 1,511 (25) 2. Vehicles (a) Nursery Motorcycles 25 1 25 - - - - - - - - 1 25 (b) Plantation Sites 7-ton lorry 630 1 630 - - - - - - - - 1 630 90 HP farm tractor 650 1 650 - - - - - - - - 1 650 Trailer 30 1 30 - - - - - - - - 1 30 (c) Field Officers Pickup 210 1 210. - - - - - - - 1 210 4 x 4 vehicle 210 1 210 - - - - - - - - 1 210 (d) Protection Motorcycles 25 1 25 - - - - - - 1 25 Subtotal Vehicles 1,780 - - - - 1,780 (95) 3. Equipment (a) Nursery Water pump 30 2 60 - - - - - - - - 2 60 (90) Tools LS - 10 - 10 - 10 - 15 - 15 - 60 (20) (b) Plantation Sites Survey Instruments LS - 20 - - - 5 - - - 5 LS 30 (90) Tools LS - 10 - 10 - 10 - 10 - 10 LS 50 (20) Subtotal Equipment 100 20 25 25 30 200 (51) 4. Fire Protection Equipment - Fire tower 10 - - 1 100 - - - - - - 1 100 (10) - Radio network 50 1 50 - - - - - - - - 1 50 (90) - Portable pump 40 2 80 1 40 - - -- 3 120 (90) - Water tank 40 2 80 - - - - - - - - 2 80 (55) - Tools LS - 50 - 20 - 20 - 30 - 30 - 150 (20) - Fire finder 25 - - - 25 - - - - - - - 25 (90) Subtotal Fire Protection 260 185 20 30 - 30 525 (49) TOTAL Base Cost 3,390 384 45 137 60 4,016 (52) SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Plantation Establishment - Technical Assistance Cost (Rs '000) 1983 1984 1985 1986 1987 1988 Total FE% Unit Cost mm Cost mm Cost mm Cost mm Cost mm Cost mm Cost mm Cost Plantation Advisor 230 3 929 12 2,763 12 2,910 12 2,212 2 535 2 535 43 9,884 84 Fire Protection Advisor 267 - _ 2 535 2 535 2 535 2 - - _ 6 1,605 81 TOTAL Base Cost - 929 _ 3,298 - 3,445 - 2,747 - 535 - 535 11,489 83 ==" , =_=,== 0xm -62 - ANNEX 4 Table 4 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) Industrial Plantations Staff Cost - Eastern Area (Rs '000) Annual 1983 1984 1985 1986 1987 1988 Salary Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost 1. Nursery Forest ranger 12 - - 1 12 1 12 1 12 1 12 1 12 60 Forest guard 10 - - 1 10 2 20 3 30 3 30 3 30 120 Pump mech. 11 - - 1 11 1 11 1 11 1 11 1 11 55 Storekeeper 8 - - 1 8 1 8 1 8 1 8 1 8 40 2. Plantation Sites AFC 26 0.5 13 1 26 1 26 1 26 1 26 1 26 143 Forester 15 - - 1 15 1 15 1 15 1 15 1 15 75 Forest ranger 12 0.5 6 1 12 2 24 4 48 8 96 12 144 330 Forest guard 10 1.0 a/ 10 2 20 4 40 8 80 16 160 24 240 550 Drivers 10 - - 5 50 5 50 5 50 5 50 5 50 250 Perm. laborer 8 - - - - 2 16 4 32 9 72 16 128 248 3. Field Offices Clerk I 15 - - 1 15 1 15 1 15 1 15 1 15 75 Clerk II 12 - - - - - - 1 12 2 24 2 24 60 Draftsman 14 - - 1 14 1 14 1 14 1 14 1 14 70 Typist 12 - - 1 12 1 12 1 12 1 12 1 12 60 Driver 10 - - 1 10 1 10 1 10 1 10 1 10 50 Messenger 8 - - 1 8 1 8 1 8 1 8 1 8 40 Cleaner 8 - - 1 8 1 8 1 8 1 8 1 8 40 Total Salaries 29 231 289 391 571 755 2,266 Travel Allowance and Overtime at 33 percent of plantation site staff cost 10 41 56 83 138 199 527 TOTAL Base Cost 39 272 345 474 709 954 2,793 a/ Two guards for six months. 63 - ANNEX 4 Table 5 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) Industrial Plantations Staff Cost - Southern Area (Rs '000) Annual 1983 1984 1985 1986 1987 1988 Salary Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost 1. Nursery Forest ranger 12 - 1 12 1 12 1 12 1 12 1 12 60 Forest guard 10 - - 1 10 1 10 2 20 2 20 2 20 80 Pump mech. 11 - - 1 11 1 11 1 11 1 11 1 11 55 Storekeeper 8 - - 1 8 1 8 1 8 1 8 1 8 4 2. Plantation Sites AFC .5 13 1 26 1 26 1 26 1 26 1 26 143 Forest ranger 12 .5 6 1 12 2 24 3 36 5 60 7 84 222 Forest guard 10 1.0 a/ 10 2 20 4 40 6 60 10 100 14 140 370 Drivers 10 - - 4 40 4 40 4 40 4 40 4 40 200 Perm. laborer 8 - - - - 2 16 4 32 7 56 11 88 192 3. Field Offices Clerk I 15 - - 1 15 1 15 1 15 1 15 1 15 75 Clerk II 12 - - - - 1 - 1 12 1 12 1 12 36 Draftsman 14 - - 1 14 1 14 1 14 1 14 1 14 70 Typist 12 - - 1 12 1 12 1 12 1 12 1 12 60 Driver 10 - - 1 10 1 10 1 10 1 10 1 10 50 Messenger 8 - - 1 8 1 8 1 8 1 8 1 8 40 Cleaner 8 - - 1 8 1 8 1 8 1 8 1 8 40 Total Salaries 29 206 254 324 412 508 1,733 Travel Allowance and Overtime at 33 percent of plantation site staff cost 10 32 49 64 93 125 373 TOTAL Base Cost 39 238 303 388 505 633 2,106 a/ Two for six months. - 64 - ANNEX 4 Table 6 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) Staff Cost - Total Industrial Plantations (Rs '000) Annual 1983 1984 1985 1986 1987 1988 Salary Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost 1. Nursery Forest ranger 12 - - 2 24 2 24 2 24 2 24 2 24 120 Forest guard 10 - - 2 20 3 30 5 50 5 50 5 50 200 Pump mech. 11 - - 2 22 2 22 2 22 2 22 2 22 110 Storekeeper 8 - - 2 16 2 16 2 16 2 16 2 16 80 2. Plantation Sites AFC 26 1.0 26 2 52 2 52 2 52 2 52 2 52 286 Forester 15 - - 1 15 1 15 1 15 1 15 1 15 75 Forest ranger 12 1.0 12 2 24 4 48 7 84 13 156 19 228 552 Forest guard 10 2.0 a/ 20 4 40 8 80 14 140 26 260 38 380 920 Drivers 10 - - 9 90 9 90 9 90 9 90 9 90 450 Perm. laborer 8 - - - - 4 32 8 64 16 128 27 216 440 3. Field Offices Clerk I 15 ~ - - 2 30 2 30 2 30 2 30 2 30 150 Clerk II 12 - - - - - - 2 24 3 36 3 36 96 Draftsman 14 - - 2 28 2 28 2 28 2 28 2 28 140 Typist 12 - - 2 24 2 24 1 24 2 24 2 24 120 Driver 10 - - 2 20 2 20 1 20 2 20 2 20 100 Messenger 8 - - 2 16 2 16 1 16 2 16 2 16 80 Cleaner 8 - - 2 16 2 16 1 16 2 16 2 16 80 Total Salaries 58 437 543 715 983 1,263 3,999 Travel Allowance and Overtime at 33 percent of plantation site staff cost 20 73 105 147 231 324 900 TOTAL Base Cost 78 510 648 862 1,214 1,587 4,899 a.. ...... ....F..... g.u ... for s month a/ Four guards for six months. SRI LANKA FOREST RESOURCES DEVELOPMENT PROGRAM Industrial Plantation Operating Cost (Rs '000) 1984 1985 1986 1987 1988 Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost FEZ Operating Cost 1. Vehicle Operating Cost Pickup 20,000 km/yr @ Rs 4/km 3 240 3 240 3 240 3 240 3 240 1200 4 x 4 Vehicle 20,000 km/yr @ Rs 4/km 2 160 2 160 2 160 2 160 2 160 800 7 Ton Lorry 20,000 km/yr @ Rs 7/km 2 280 2 280 2 280 2 280 2 280 1400 90 HP Tractor 1,000 hr/yr @ Rs 96/hr 2 192 2 192 2 192 2 192 2 192 960 Motorcycle 500 km/yr @ Rs.1/km 4 20 4 20 4 20 4 20 4 20 100 i Subtotal - 892 - 892 - 892 - 892 - 892 4,460 44 2. Nursery Pumps Operating Cost 17 17 17 17 17 85 44 3. Buildin Maintenance @2.5% of capital cost - 69 - 85 - 89 - 96 - 98 437 25 TOTAL Base Cost - 978 - 994 - 998 - 1,005 - 1,007 4,982 42 MJ =S 'i 4r - 66 - ANNEX 4 Table 8 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Nursery Model Cost per Unit Unit Cost Units per 1000 plants (Rs) 1000 plants (Rs) Remarks Soil/sand collection Labor md 25 0.333 8.33 lm3Lmd, 3000 plants/r3 Transport 0 & M m 1.30 16.67 21.67 5 mJ load @ Rs 6.50/km Driver md 40 0.033 1.33 2 loads/day @ 50 km 31.33 Soil mixing Labor md 25 0.167 4.17 2 m3/md Fertilizer kg 3 3.33 10.00 10 kg/mr3 14.17 Seed bed prep/sowinR Labor md 25 0.25 6.25 4000 plants/md Filling pots Labor md 25 2 50.00 500 pots/md Polyethene pots nos 0.10 1000 100.00 150.00 Transplanting Labor md 25 1 25.00 1000 plants/md Watering Labor md 25 1.5 37.50 0.1 M plants/md Pump 0 & M hr 11 0.2 2.00 1 hp, 20,000 1/hr 39.50 D&spatch Labor md 25 6.25 4000 plants/md Subtotals Labor md 25 5.50 137.50 Material 110.00 0 & M 25.00 Total Nursery Cost 272.50 Less 0 & M 25.00 TOTAL 247.00 '000 Nursery Cost of Total Average Nursery Cost plants Cost Seed Nursery used in per/1000 plants per ha per ha per ha Cost/ha calculations SRecies (Rs) (Rross) (Rs) (Rs) (Rs) (Rs) E. Tereticornis 247 2.2 543.4 25 568.4 E. Citriodora 247 2.2 543.4 126 669.4 ) 620 A. Odorotissima 247 1.5 370.5 84 454.5 A. Indica 247 1.5 370.5 273 643.5 ) 550 T. Grandis 247 1.5 370.5 630 1000.5 G. Arborea 247 1.5 370.5 1071 1441.5 ) 1220 -67- ANNEX 4 Table 9 SRI LANKA FORESTRY RESOURCES DEVELOPMENT PROJECT (Forestry 1) Plantation Establishrent - Unit Cost a/ a! Basic Model I - Espacement 2.5 x 2.5 a Basic Model II - Espacement 3 x 3 m b/ ID b/ b/ 2D b/ 1A LB IC with Taungya 2A 2B 2C with Taungya Manual with Ripping with Taungya and Ripping Manual with Ripping with Taungya and Ripping Units Rs/ha Units Rs/ha Units Rs/ha Units Rs/ha Units Rs/ha Units Rs/ha Units Rs/ha Units Rs/ha YEAR 1 1. Survey, demonstrative md 1 25 1 25 1 25 1 25 1 25 1 25 1 25 1 25 2. Site preparation -knocking down & staking md 40 1,000 40 1,000 LS 1,250 LS 1,250 40 1,000 40 1,000 LS 1,250 LS 1,250 -burning and re-burning md 7 175 7 175 7 175 7 175 3. Survey, roads, firebreaks md 2 50 2 50 2.5 63 2.5 63 2 50 2 50 2.5 63 2.5 63 4. Road and firebreak const. -primary 10 m/ha ad 20 500 20 300 20 500 20 500 20 500 20 500 20 500 20 500 -firebreak, internal ad 10 250 10 250 10 250 10 250 10 250 10 250 10 250 10 250 -firebreak, external md 20 500 20 500 20 500 20 500 20 500 20 500 20 500 20 500 5. Staking ad 4 100 4 100 - - - - 3 75 3 75 - - - - 6. Pitting md 20 500 20 500 - - - - 14 350 14 350 - - - - 7. Plant Distribution ad 1 25 1 25 - - - - 0.8 20 0.8 20 - - - - 8. Planting md 10 250 10 250 - - - - 7 175 7 175 - - - - 9. Fertilization md 4 100 | 4 100 - - - - 3 75 3 75 - - - - 10. Replanting md 2.5 63 2.5 63 - - _ - 2 50 2 50 - _ _ - Subtotal ad 141.5 3,538 141.5 3,538 73.5 2,588 73.5 2,588 129.8 3,245 129.8 3,245 73.5 2,588 73.5 2,588 11. Seedling (in '000 units) ea 2.2 620 2.2 620 2.2 620 2.2 620 1.5 550 1.5 550 1.5 550 1.5 550 12. Fertilizer kg 80 224 80 224 80 224 80 224 55 154 55 154 55 154 55 154 Subtotal Materials - 844 - 844 - 844 - 844 - 704 - 704 - 704 - 704 13. Ripping - - - 600 - - - 600 - - - 600 - - 60U Subtotal Year I Basic Cost - 4,382 - 4,982 - 3,432 - 4,032 - 3,949 - 4,549 - 3,292 - 3,892 YEAR 2 14. Weeding ad 75 1,875 75 1,875 LB 250 LS 250 75 1,875 75 1,875 LS 250 LS 250 15. Protection md 1.5 38 1.5 38 - 38 - 38 1.5 38 1.5 38 - 38 - 38 Subtotal ad 1,913 - 1,913 - 288 - 288 - 1,913 - 1,913 - 288 - 288 YEAR 3 16. Weeding md 30 750 30 750 LS 250 LS 250 30 750 30 750 LS 250 LS 250 17. Protection ad 1.5 38 1.5 38 - 38 - 38 1.5 38 1.5 38 - 38 - 38 Subtotal md 788 - 788 - 288 - 288 - 788 - 788 - 288 - 288 YEAR 4 18. Weeding ad 20 500 20 500 - - - - 20 500 20 500 - - - - 19. Protection md 1.5 38 1.5 38 - 38 - 38 1.5 38 1.5 38 - 38 - 38 Subtotal ad - 538 - 538 - 38 - 38 - 538 - 538 - 38 - 38 YEAR 5 20. Protection md - 38 - 38 - 38 - 38 - 38 - 38 - 38 - 38 YEAR 18 c/ YEAR 20 c/ YRAR 40 c YEAR 50 c/ - 38 - 38 - 38 - 38 - 38 - 38 - 38 - 38 a/ Basic Model I is applicable only to Eucalyptus spp. In the Basic Model II, the seedling cost is taken as Rs 550/ha based on the cost of potted seedlings. For teak and Gmelina this cost would be increased to Rs 1,220/ha, hence the Basic Cost for the first year would be Rs 4,619/ha for model 2A, Rn 5,219/ha for model 2B, Rs 3,962/ha for model 2C and Rs 4,562/ha for model 2D. b/ Under the "controlled chena" or "taungya" system, farmers are paid a lump sum (LS) of Rs 1,250 for preparing the soil and planting and Rs 250 each for Years II and III for weeding. c/ Protection would continue until the end of the rotation period - for eucalyptus spp. and light hardwoods established without ripping rotation, the age would be 20 years. For teak rotation, the age would be 40 years. -68 - ANNEX 4 Table 10 SRI LANKA FORESTRY RESOURCES DEVELOPMENT PROJECT (Forestry 1) Plantation Establishment - First Year Costs (Rs '000) 1984 1985 1986 1987 1988 Unit Cost Year 1 Year 2 Year 3 Year 4 Year 5 Total Rs/ha ha Cost ha Cost ha Cost ha Cost Unit Cost ha Cost Planting with Taungya E. Tereticornis 3,432 50 172 100 343 275 944 350 1,201 350 1,201 1,125 3,861 E. Citriodora 3,432 50 172 100 343 200 686 200 686 200 686 750 2,573 T. Grandis 3,962 25 99 25 99 50 198 75 297 75 297 250 990 A. Odorotissima 3,292 25 82 25 82 25 82 25 82 25 82 125 410 A. Indica 3,292 25 82 25 82 25 82 25 82 25 82 125 410 .G. Arborea 3,962 25 99 25 99 25 99 25 99 25 99 125 495 Subtotal 200 706 300 1,048 600 2,091 700 2,447 700 2,447 2,500 8,739 Planting with Contract E. Tereticornis 4,382 50 219 150 657 275 1,205 800 3,506 1,500 6,573 2,775 12,160 E. Citriodora 4,382 30 131 70 307 150 657 450 1,972 650 2,848 1,350 5,915 A. Odorotissima 3,949 15 59 -35 138 75 296 75 296 75 296 275 1,085 A. Indica 3,949 15 59 35 138 75 296 75 296 75 296 275 1,085 T. Grandis 4,619 75 346 75 346 150 693 125 577 125 577 550 2,539 G. Arborea 4,619 15 69 35 162 75 346 75 346 75 346 275 1,269 Subtotal 200 883 400 1,748 800 3,493 1,600 6,993 2,500 10,936 5,500 24,053 Ripping 600 100 60 175 105 350 210 575 345 800 480 2,000 1,200 TOTAL Base Cost 1,649 2,901 5,794 9,785 13,863 33,992 - 69- ANNEX 4 SRI LANKA Table 11 FORESTRY RESOURCES DEVELOPMENT PROJECT (Forestry 1) Industrial Plantations Annual Maintenance Cost (Rs '000) 1985 1986 1987 1988 Total Unit Cost (Rs/ha) ha Cost ha Cost ha Cost ha Cost ha Cost Weeding Taungya 1st year 250 200 50 300 75 600 150 700 175 1,800 450 2nd year 250 - - 200 50 300 75 600 150 1,100 275 Subtotal 200 50 500 125 900 225 1,300 325 2,900 725 Contract 1st year 1875 200 375 400 750 800 1,500 1,600 3,000 3,000 5,625 2nd year 750 - - 200 150 400 300 1,800 600 1,400 1,050 3rd year 500 - - - - 200 100 400 200 600 300 Subtotal 200 375 600 900 1,400 1,900 2,800 3,800 5,000 6,975 Protection 38 400 15 1,100 42 2,500 95 4,800 182 8,800 334 TOTAL 440 1,067 2,220 4,307 8,034 -70 - ANNEX 4 Table 12 SRI LANKA FORESTRY RESOURCES DEVELOPMENT PROJECT (Forestry 1-) Plantation Establishment Direct Cost Summary 1984, 1985 1986 1987 1988 Total ha Cost ha Cost ha Cost ha Cost ha Cost ha Cost FE% Planting with taungya 200 706 300 1,048 600 2,091 700 2,447 700 2,447 2,500 8,739 4 with contract 200 883 400 1,748 800 3,493 1,600 6,993 2,500 10.936 5,500 24,053 4 Subtotal 400 1,589 700 2,796 1,400 5,584 2,300 9,440 3,200 13,383 8,000 32,792 4 Ripping 100 60 175 105 350 210 575 345 800 480 2,000 1,200 70 Weeding with taungya - - 200 50 500 125 900 225 1,300 325 2,900 725 0 with contract - - 200 375 600 900 1,400 1,900 2,800 3,800 5,000 6,975 0 Subtotal - - 400 425 1,100 1,025 2,300 2,125 4,100 4,125 7,900 7,700 0 Protection - - 400 16 1,100 43 2,500 95 4,800 182 8,800 334 0 TOTAL Base Cost - 1,649 - 3,342 - 6,862 - 12,005 - 18,169 - 42,027 5 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT INDIIISTRIAL PLANTATION COST (TOTAL- COST IN RS '000) YEAR 1983 1.984 1.985 1986 t987 1988 TOTALS CIVIL WORKS --27 81 609 179 261 82 3912., VEHICLES - 3770 - - - 3770 EQUIPMENT 100 670 215 120 120 75 1300 FPLANTATION ESTABLISHMENT - 1650 3342 6862 12005 18169 42028 TECHNICAL ASSISTANCE 929 3298 3445 2747 535 535 11489 ST UDlI ES 945 - -. - - - 945 STAFF 78 510 648 862 1 2114 1587 4899 OP'ERATING & MAINTENANCE 979 994 998 1.0 051 1007 4982 BASE COST 20521 13658 9253 11768 15139 21455 73326 P'HYSICAL CONTINGENCIES 9 517 371 510 794 1100 .3301 F'RICE CONTINGENCIES 313 3899 4536 8016 13817 23983 54565 TOTAL COST 2374 18075 14159 20294 29750 46539 131191 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) ManaRement of Teak Plantations (Re '000) 1983 1984 1985 1986 1987 1988 FE Unit Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Total Cost (X) Staff Forest ranger 12 - - - - 7 84 7 84 7 84 252 (0) Forest guard 10 - - - - - - 7 70 7 70 7 70 210 (0) Drivers 10 - - - - 7 70 7 70 7 10 210 (0) a/ Laborers 6.25 - - - - - - 28 175 28 175 28 175 525 (0) Vehicles Operating and b/ Maintenance 80 _ _ _ _ _ _ _ 560 - 560 - 560 1.680 (44) Subtotal 959 959 959 2,877 (26) Travel Allowance and Overtime @ 33 percent of staff cost c/ -74 74 74 222 () TOTAL - - - 1,033 1,033 1,033 3,099 (24) a/ Rs 25/md, 250 working days per year b/ At Rs 4/km, 20,000 km/yr c/ Excluding labor cost ~- uP SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) Silvicultural Treatment of Young Stands (Rs '000) Unit Cost 1983 1984 1985 1986 1987 1988 FE (Rs/ha) ha Cost ha Cost ha Cost ha Cost ha Cost ha Cost Total Cost (%) Teak First Year Weeding 1,125 - - 1,800 2,025 1,800 2,025 1,800 2,025 1,800 2,025 1,800 2,025 10,125 (0) Second Year Weeding 375 - - - - 1,800 675 1,800 675 1,800 675 1,800 675 2,700 (0) Pine First Year Weeding 1,125 - - 900 1,013 900 1,012 900 1,012 900 1,012 900 1012 5,061 (0) Second Year Weeding 375 - - - - 900 338 900 338 900 338 900 338 1,352 (0) Mahagony First Year Weeding 1,500 - - 300 450 300 450 300 450 300 450 300 450 2,250 (0) Second Year Weeding 750 - - - - 300 225 300 225 300 225 300 225 900 m0Q TOTAL Base Cost - - - - 3,488 - 4,725 - 4,725 - 4725 - 4,725 22,388 (0) in SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Reforestation of Mature Plantations Cost 1984 1985 1986 1987 1988 Total (Rs/ha) Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Plantation Establishment Planting and replanting 1,250 200 250 200 250 200 250 200 250 200 250 1,000 1,250 Seedlings 620 200 124 200 124 200 124 200 124 200 124 1,000 620 Fertilizer 225 200 45 200 45 200 45 200 45 200 45 1,000 225 Subtotal 419 419 419 419 419 2,095 Maintenance First year weeding 2,000 - 200 400 200 400 200 400 200 400 800 1,600 e Second year weeding 750 - - - 200 150 200 150 200 150 600 450 _ Third year weeding 500 - - - - - 200 100 200 100 600 200 Protection 37.5 - - _ - - - - 200 8 200 8 Subtotal - 400 550 650 658 2,258 TOTAL Base Cost 419 819 969 1,069 1,077 4,353 = = SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT PLANTATION MANAGEMENT COST (TOTAL COST IN RS '000) --------------------------------------------------------------------__-------__----------------------------- YEAR 1983 1984 1985 1986 1987 1988 TOTALS -----------------------------------------------------------------__----------__----------------------------- MANAGEMENT OF TEAK STAFF - - 298 298 298 894 LABOUR - - 175 175 175 525 OPFRATING a MAINTENANCE - - - 560 560 560 1680 TREATMENT OF YOUNG STANI, ________________________. LABOUR 3488 4725 4725 4725 4725 22388 SEPLANT MATURE STANDS --_______________________ LABOUR 311 711 861 961 968 3810 MATERIALS 108 108 108 108 108 541 BASECOST - 3906 5544 6727 6827 6834 29838 PHYSICAL CONTINGENCIES 211 313 352 362 363 1600 PRICE CONTINGENCIES - t674 3494 5243 6562 7931 24903 TOTAL COST - 5791 9350 12322 t3750 15128 56341 1- X b v SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT Plantation Research and Trials Capital Cost (Rs '000) 1983 1984 1985 1986 1987 1988 Total FE Unit Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost (Z) Vehicles Jeep 1 210 1 210 (95) Land Clearing Equipment K-G blade 230 - - 1 230 - - - - - 1 230 (95) Multi-rake 230 - - 1 230 - - - - - - - 1 230 (95) Disk plough 350 - - 1 350 - - - - - - 1 350 (95) Root plough 500 - - 1 500 - - - - - - - 1 500 (95) Subtotal - 1,310 - - - - - 1,310 (95) Research Equipment Instruments LS 10 20 20 5 5 - 60 (95) Desk computer LS - 210 - - - - 210 (95) Fencing Materials a/ LS - 1,000 - _ _ _ 1,000 (90) Labor 25 12 b/ 300 - - - - 300 (0) Subtotal 1,520 20 20 5 5 1,570 (57) Technical Assistance 535 535 5 - - 1,605 (83) TOTAL Base Cost 3,575 4,695 (79) .... .. --- ... ___.. , ---- _.______ a/ For fence construction b/ 1,000 man-days I10' SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) Plantation Research and Trials Staff Cost (Rs '000) Unit Cost 1983 1984 1985 1986 1987 1988 Total FE (Rs/yr) Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost {%Y Staff ACF 26 - -. 1 26 1 26 1 26 1 26 1 26 5 130 Forest Ranger 12 - - 1 12 1 12 1 12 1 12 1 12 5 60 Forest Guard 10 - - 1 10 1 10 1 10 1 10 1 10 5 50 Clerk II 12 - - 1 12 1 12 1 1Z 1 12 1 12 5 60 Typist 12 - - 1 12 1 12 1 12 1 12 1 12 5 60 Driver 12 - - 1 12 1 12 1 12 1 12 1 12 5 60 Subtotal - - - - 82 - 82 - 82 - 82 - 82 410 (0) Travel Allowance and Overtime Ld 33% of Staff Cost - 27 - 27 - 27 - 27 - 27 - 135 Subtotal - - - - 109 - 109 - 109 109 - 109 - 545 (0) Consultants Biometrician a/ 40 - - 0.5 20 - - - - - - 0.5 20 Inputman b/ 30 - - 1.0 30 - - - - - - - - 1.0 30 Clerk/typist b/ 14 - - 1.0 14 - - - _ - _ _ - 1.0 14 Subtotal - 64 - - - - 64 (0) Operatin__and Maintenance 80 80 80 80 80 400 (50) TOTAL Base Cost - 253 189 189 189 189 1,009 (20) a/ One for six months b/ Two for six months m a ANNEX 6 -78- Table 3 SRI LANKA FOREST RESOURCES DEVELOPMENT PROJECT (Forestry 1) Mechanized Plantation Trials - Unit Cost a/ (Rs '000) Unit Total Cost FE Unit Input Cost (Rs/ha) (%) 1. Surveyor md 1 25 25 (0) 2. Knocking down (200 HP Tractor) hr 3 750 2,250 (50) 3. Windrawing (200 HP Tractor hr 2 750 1,500 (50) 4. Plowing (200 HP Tractor) hr 3 750 2,250 (50) 5. Disk Harrowing (90 HP Tractor) hr 3 96 288 (90) 6. Staking/marking (90 HP Tractor) hr 1 96 96 (90) 7. Planting Seedlings (1100/buddy/ha) md 6 25 150 (0) 8. Replanting (30% replacement) md 4 25 100 (0) Subtotal - - - 6,659 (-) 9. Seedling (@ 1600 seedling/ha) ha 1 600 600 (0) 10. Fertilizer kg 80 2.80 224 (50) Subtotal - - 824 - Base Establishment Cost - - - 7,483 (44) 11. Weeding - First Year - 90 HP Tractor with Disk Plow hr 3 96 288 (90) - 90 HP Tractor with. Disk Harrow b/ hr 3 96 288 (90) - Labor md 6 25 150 (0) Subtotal - - - 726 (40) 12. Weeding - Second Year - 90 HP Tractor with Disk Plow hr 3 96 288 (90) - 90 HP Tractor with Disk Harrow hr 1.5 96 144 (90) - Labor md 6 25 150 (0) Subtotal - - - 582 (37) 13. Weeding - Third Year - 90 HP Tractor with Disk Harrow hr 3 96 288 (90) - Labor md 6 25 150 (0) Subtotal - - - 438 (33) TOTAL Base Cost
Groupe de la Banque mondiale · Staff Appraisal Report
Sri Lanka - Forest Resources Development (Forestry I) Project
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Organisation
Groupe de la Banque mondiale
Type de document
Staff Appraisal Report
Pays
Sri Lanka
Source
Banque mondiale