Sri Lanka - Second Mahaweli Ganga Development Project

Report No. 1487a-CE Sri Lanka: Appraisal of Mahaweli Ganga Development Project 11 March 31, 1977 Agriculture Division A South Asia Projects Department FOR OFFICIAL USE ONLY Document of the World Bank 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 Until recently, the Sri Lanka Rupee was pegged to the Pound Sterling at a parity rate of X 1.00 = Rs 15.60. On May 24, 1976, the Sri Lanka Rupee was officially linked to a basket of currencies with the initial parity rate based on the prevailing Rupee/Pound rate. Both the composition of the basket and the weights assigned to the currencies in it were revised on March 12, 1977. The current Rupee/US Dollar rate has been used throughout the report, except where stated to the contrary. 1/ US$1 = Rs 7.28 Rs 1 = US$0.137 Rs 1 million = US$137,363 WEIGHTS AND MEASURES 1 long ton = 2,240 lb = 1.016 metric tons 1 hundredweight (cwt) = 50.8 kg = 112 lb 1 bushel (bu) of paddy = 45 lb 1 pint = 0.57 liters 1 acre (ac) = 0.405 hectare (ha) 1 mile (mi) = 1.609 kilometers (km) 1 square mile (sq mi) = 640 ac (259 ha) 1 foot (ft) = 30.5 centimeters (cm) 1/ Through the sale and purchase of Foreign Exchange Entitlement Certificates (FEECs), Sri Lanka effec- tively practices a dual exchange rate. Most non- foodgrain imports have to pay a surcharge of 65% through the purchase of FEECs. Most non-traditional exports receive a 65% premium over the official rate through the sale of FEECs.  FOR OFFICIAL USE ONLY PRINCIPAL ABBREVIATIONS AND ACRONYMS USED ADB ; Asian Development Bank APC = Agricultural Productivity Committee APL Agricultural Productivity Law ARTI = Agrarian Research and Training Institute CC - Cultivation Committee CFC Ceylon Fertilizer Corporation CRB Cooperative Rural Bank DA - Department of Agriculture DME Department of Machinery and Equipment FAO Food and Agricultural Organization FEEC Foreign Exchange Entitlement Certificate GNP - Gross National Product GOSL Government of Sri Lanka GPS Guaranteed Price Scheme ICB = International Competitive Bidding IRRI = International Rice Research Institute LBCL Land Betterment Charges Law LCB = Local Competitive Bidding LHG - Low Humic Gley Soils M = Million MAL - Ministry of Agriculture and Lands MCC Mahaweli Coordinating Committee MDB = Mahaweli Development Board MIPH Ministry of Irrigation, Power and Highways -PC = Multi-Purpose Cooperatives MW = Megawatt O&M Operation and Maintenance PAC - Project Advisory Committee PMB = Paddy Marketing Board RBE = Reddish Brown Earth Soils SLTC = Sri Lanka Trading (Tractor) Corporation TSC Technical Subcommittee WFP = World Food Program This document asrhuatricted distribution and may be used by recipients only in the performance of their official duties. Its contents MAY not Otherwise be diwsclse without World Bank authorizatIon.  FREQUENTLY USED ABBREVIATIONS FOR OFFICERS AI = Agricultural Instructor AO = Agricultural Officer CDO Community Development Officer CPE = Chief Project Engineer DAEO = District Agricultural Extension Officer DDA Deputy Director of Agriculture DGM = Deputy General Manager DM = Draftsman DRPM = Deputy Resident Project Manager DDA Deputy Director of Agriculture GA = Government Agent KVS = Village Level Worker (Krushikarma Viyaptha Sevaka) PAEO = Project Agricultural Extension Officer PE = Project Engineer RPM = Resident Project Manager SMS = Subject Matter Specialist SPE = Supervisory Project Engineer TA = Technical Assistants WS = Work Supervisor GLOSSARY chena slash and burn or "shifting" agriculture district = the first subdivision in the country for Govern- ment administrative purposes. There are 22 districts ganga = major river kurakkan = finger millet maha = northeast monsoon season (October to January) manioc = cassava - the plant from which tapioca is made paddy = unhusked rice purana = villages inhabited by the descendents of the original settlers, who have a tradition bound, long history rice = the husked rice, ready for cooking (also refer- red to as "milled rice") tank = reservoir for local rainwater storage yala = southwest monsoon season (March to June) FISCAL YEAR January 1 - December 31  SRI LANKA APPRAISAL OF MAHAWELI GANGA DEVELOPMENT PROJECT II TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ...................... .......... i - iii I. INTRODUCTION ....................................................... I II. BACKGROUND ..........*. , ...... ............ ....... O.. 2 General ......... ..... ........... ..... 000000*.......... 2 The Economy ... .... ....... ....o........ ............... 2 Agriculture and Irrigation .................... . .... 2 The Mahaweli Development Scheme ................... o 3 Settlement Schemes .................... ........... . 3 Rural Institutions and Legal Framework ............ 4 III. THE PROJECT AREA . ........... . .......... . .. ... . 5 General ............ oo.....o........o.... ....................... 5 Climate ......... ...................................... 6....... 5 Topography and Soils .... ..................... 5 Socio-Economic Conditions ................. ..... 5 Land Use and Farming Practices ............. 6 Agricultural Supporting Services ....... ...o ....... 7 Transport .... . . ............................... .... 8 Social Services ....... ... .o........ ........................... 8 IV. THE PROJECT .......................... ........ *... ....... 8 Project Concept ....... ............................ 8 Project Components . ............................. . 9 This report is based on the findings of an Appraisal Mission including: Messrs. P. Ljung; S. Baker, C.J.R. Bridge, and Ms. M. Nguyen (IDA), and C.D. Datey (Consultant). At various stages of Appraisal, the group was accompanied by representatives of four prospective co-financing countries including: Messrs. R. Bailey and E. Yendall (Canada); R. Glazener (The Netherlands); W. Franklin (UK) and C. Billings, J. Coles, R. Perry and J. Watson (USA).  -2- Page No. Irrigation and Land Development ...... ............. 10 Production Support ....0..........0...... ............ 11 Social Infrastructure ........... ........... 12 Other Project Components ..*........................ 12 Implementation Schedule ........................... 13 Engineering ............................................... 13 Water Supply, Demand and Quality .............. .... 13 Environmental Effects ...... ............. 14 V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .............. 14 Project Cost Estimates ............ ...... 14 Financing ......................... .......... 16 Procurement ................ ................ ........ 16 Disbursement ....................................... ....... 18 Accounts and Audits ...... ......................... 18 Cost Recovery ..................................... 19 VI. ORGANIZATION AND MANAGEMENT ............. o . ............. 19 The Mahaweli Development Board ................ . . ... 19 Project Planning ................................. 20 Project Implementation . . ............ o ............. 20 Field Organization After Project Implementation .... 21 O&M of Irrigation Works ................... . . ....... 22 Staffing and Funds ...... . .. . .............. . 22 Settlement Procedures ........... ..... . ............ 22 VII. PRODUCTION, MARKETING, PRICES AND FARM INCOMES .... ..... 23 General ........................................... 23 Agricultural Production ...o ....................... 23 Marketing and Prices .............................. 24 Farm Incomes ...................................... 24 VIII. BENEFITS AND JUSTIFICATION ............................. 25 General ........ ................................... 25 Production Benefits ...... ......................... 25 Employment Effects ................................ 25 Income Distribution ......... .............................. 26 Social Benefits ..... .............................. 26 Economic Evaluation ..... .......................... 26 Project Risk ...................................... 27 IX. AGREEMENTS REACHED AND RECOMMENDATIONS ................. 27  -3- ANNEXES 1. The Project Area 2. Water Supply, Demand and Quality 3. Irrigation Works 4. Production Support 5. Social Infrastructure 6. Equipment Lists 7. Cost Estimate 8. Schedule of Expenditures, Proposed Allocation of the Aid Package, and Estimated Schedule of Disbursements 9. Organization and Management 10. Settlement Procedures 11. Cultivation Practices, Cropping Patterns and Yields 12. Crop Inputs and Farm Budgets 13. Economic Analysis Appendix 1: Prices for Economic and Financial Analyses Appendix 2: Farm Labor Analysis Appendix 3: Construction Labor Analysis MAPS 11751 R - Project Location 11908 R - Project Areas 12362 R - Irrigation and Road Infrastructure   SRI LANKA APPRAISAL OF MAHAWELI GANGA DEVELOPMENT PROJECT II SUMMARY AND CONCLUSIONS i. Agriculture plays a major role in Sri Lanka's economy. It accounts for about one-third of the GNP, more than one-half of all employ- ment, and about four-fifths of export earnings. Historically, the country has depended upon export earnings from tree crops -- tea, rubber and coco- nuts -- to pay for imports of foodgrains and other goods. However, agri- cultural production has stagnated since 1970 and, with adverse changes in the terms of trade, Sri Lanka has found it increasingly difficult to import almost 50% of its foodgrain requirements. This has prompted a re-examination of past policies and increased food self-sufficiency is now a major objec- tive for the Government's agricultural policies. Two corner stones in the Government's strategy to increase food production are better utilization of existing irrigation facilities and creation of new irrigation potential. ii. The Mahaweli Ganga is Sri Lanka's largest river, draining an area of about 4,000 sq mi. It is the principal source of water available for irrigation in the dry zone, which covers the northern and eastern part of the island. The river rises in the mountainous southern-central part of the island, which receives an annual rainfall of 175 to 200 inches, and discharges to the north-east into the Bay of Bengal. The richness of the water resources at its source is contrasted with the relatively low rainfall (35 to 75 inches) in the dry zone. iii. The present Master Plan for the Mahaweli Development Scheme, formu- lated in 1968 by a UNDP/FAO team, envisages 900,000 ac of irrigation and 970 MW of hydropower. Construction of Stage I of the scheme started with Bank Group assistance in 1972 and is now almost completed. Stage I consists of a 40 MW power station, and a transbasin diversion from the Mahaweli Ganga at Pogolla to improve water supply to some 130,000 ac of existing irrigated land and to provide adequate water for the irrigation of 90,000 ac of new land most of which is located in the present project area. The Stage II works, which would utilize water diverted by Stage I to irrigate 71,000 ac of new land, were started in 1974. So far, irrigation infrastructure has been completed for 6,100 ac and work is in progress on 24,600 ac. The proposed project would complete the second stage of the Master Plan. iv. The project would cover a contiguous area of 106,000 ac. It would include: (a) construction of irrigation, drainage and road infrastructure for 40,300 ac (US$13.7 M net of administration costs and contingencies); (b) clearing of jungle and preparing 40,300 ac for cultivation as well as settling some 15,300 families on 2-1/2 ac plots (US$18.2 M); (c) construction and O&M facilities and equipment (US$12.6 M) for 71,000 ac; (d) production  - ii - support ici the form of farm equipment, marketing, transport and processing facilities for 71,000 ac (US$13.1 M); (e) improved agricultural extension services for the whole 106,000 ac (US$1.9 M); (f) social infrastructure -- village wells, schools, medical and community development facilities -- for 64,900 ac (US$6.4 M); and (g) technical assistance and monitorlng (US$1.2 M). v. Total project costs are estimated at US$100.5 M equivalent, in- cluding US$20.5 M in import taxes and duties. The foreign exchange com- ponent is estimated at US$32.6 M, or 41% of the total net of taxes and duties. Civil works and buildings amount to US$37.8 M; equipment and vehicles, US$26.3 M; technical assistance, US$0.6 M; engineering, settle- ment assistance, administration and monitoring, US$6.5 M; physical con- tingencies, US$6.8 M and price contingencies, US$22.2 M. vi. With assistance from the Bank Group, GOSL has tentatively secured credits of about US$6.0 M equivalent from Canada, US$5.0 M from The Nether- lands, US$7.2 M from UK, and US$5.0 M from the US, for financing parts of the project costs. Together with the proposed IDA credit of US$19.0 M, they would finance all foreign exchange costs and about 20% of local costs, or 53% of the total project cost net of taxes and duties. vii. Project implementation would take about five years. The Mahaweli Development Board (MDB), an agency under the Ministry of Irrigation, Power and Highways, would be responsible for implementation of all civil works and buildings proposed under the project. The Department of Agriculture in the Ministry of Agriculture and Lands would be responsible for reorganizing and strengthening the extension service. The Sri Lanka Tractor Corporation would be responsible for the procurement and distribution of farm equipment to the project area farmers as well as for procurement and distribution of construction and O&M equipment. Interagency coordination of planning and im- plementation would be provided by the Mahaweli Coordination Committee, chaired by the Secretary of Irrigation, at the policy level and by technical sub- committees at the working level. After completion of construction, all build- ings would be handed over to the agencies concerned. The MDB, initially, would be responsible for operation and maintenance of the irrigation infrastructure. At the field level, interagency coordination would be provided by the Project Advisory Committee, chaired by MDB's Resident Project Manager which would in- clude officers from the concerned agencies as well as farmer representatives. viii. Equipment and vehicles to be financed under the credits from Canada, UK and the US would be procured in accordance with their respective procurement guidelines. Other equiDment and vehicles would be procured through interna- tional competitive bidding in accordance with IDA guidelines. Since the civil works and buildings (US$37.8 M) would be relatively small, labor-intensive, scattered over a wide area and implemented seasonally over a five year period, international competitive bidding woiuld not be practical. Most of these works (US$28.7 M) would be carried out after local competitive bidding or through small unit price contracts. About 24% of all works would be carried out by MDB under force account (US$0.6 M) or by public agencies under negotiated contracts (US$8.5 M).  - iii - ix. The irrigation infrastructure provided under the project would directly benefit some 15,300 families who, at present, are landless or practice subsistence agriculture on small holdings. Most of them would be given secure tenure for the first time and their incomes, presently one-half of the national average, would reach the national level. The expansion of the cropped area and the more intensive cultivation, made possible by the provision of irrigation, would generate an annual farm employment of three million man-days or about 12,000 full time jobs. The project would have substantial secondary employment effects in marketing, processing, supply of farm inputs and services, and would help relieve the large unemployment and underemployment prevailing in and around the project area. x. At full development in 1986, the project would increase the production of: foodgrains by 42,300 tons; chillies, 1,100 tons; oilseeds, 3,800 tons; and vegetables, 3,600 tons. At projected world market prices, this would represent a net annual foreign exchange saving of about US$8.0 M. The project's economic rate of return would be 21%. Sensitivity tests indicate that the project would remain economically viable even under a combination of unlikely adverse circumstances. xi. The proposed project would constitute the first major integrated development of unirrigated land under the Mahaweli Master Plan. In its approach to project management, community participation and supporting services, the project was formulated with an overriding concern for replic- ability in future land development in the dry zone. xii. Subject to appropriate assurances to be obtained from the Govern- ment, the proposed project is suitable for an IDA credit of US$19 million. The Borrower would be the Republic of Sri Lanka.   SRI LANKA APPRAISAL OF MAHAWELI GANGA DEVELOPMENT PROJECT II I. INTRODUCTION 1.01 The Government of Sri Lanka (GOSL) has requested IDA assistance for a part of the Mahaweli Development Scheme. The scheme, which is based on a Master Plan prepared by a UNDP/FAO team in 1968, envisages the irrigation development of 900,000 ac and 970 MW of hydropower. Stage I of the scheme, supported by the Bank Group through Credit 174-CE (US$14.5 M) and Loan 653-CE (US$14.5), was started in 1972 and is expected to be completed in 1977. It consists of a 40 14W hydropower plant and a transbasin diversion from Mahaweli Ganga at Polgolla to the present project area and partial rehabilitation of an existing irrigation system serving some 130,000 ac. The Stage II works, started in 1974, would utilize part of the water diverted by Stage I to irrigate 71,000 ac of new land in north central Sri Lanka in order to settle 27,000 families. The proposed project would complete Stage II and provide agricultural extension services to the 71,000 ac as well as 35,000 ac of adjacent irrigated land, at an estimated cost of US$100.5 M (US$80.0 M net of taxes and duties). 1.02 This would be the Bank Group's fifth operation in support of the country's efforts in water resources development. In addition to supporting the Mahaweli Ganga Stage I Project, the Bank Group has been involved in a Lift Irrigation Project (Credit 121-CE, US$2.0 M), a Drainage and Reclamation Project (Credit 168-CE, US$2.5 M), and a Tank Irrigation Modernization Project (Credit 666-CE, US$5.0 M). 1.03 The feasibility study for Stage II, provided for under the Loan/ Credit Agreements for Stage I, was prepared by the consulting firm SOGREAH of France. An FAO/IBRD Cooperative Program Mission visited Sri Lanka in early 1975 to finalize a preparation report (Report No. 17/75 CEY 7), and the project was appraised in April/May 1975 by a Bank Group Mission. In February 1976, GOSL requested that the project be reformulated. A followup Mission, comprising: Messrs. P. Ljung; S. Baker; C. J. R. Bridge, and Ms. M. Nguyen (IDA), and Mr. C. D. Datey (Consultant), visited Sri Lanka in May/ June 1976 for this purpose. This report is based on the findings of the followup Mission. At various stages, the IDA Missions were accompanied by representatives of four prospective co-financing countries: Messrs. R. Bailey and E. Yendall (Canada); R. Glazener (The Netherlands); W. Franklin (UK); and C. Billings, J. Coles, R. Perry and J. Watson (USA).  - 2 - II. BACKGROUND General 2.01 Sri Lanka has an estimated population of about 13.8 million, 80% of which is rural. Of the total land area of 16.2 million ac (about 25,300 sq mi), about 5 million ac are used for agriculture. The climate is characterized by nearly constant temperatures and large variations in rainfall (Annex 1). The island can be divided into two distinct precipitation zones: the wet zone (average annual rainfall over 75 inches), situated in the southwest quadrant and covering about 30% of the land area, and the dry zone (average annual rainfall ranging from 35 to 75 inches) covering the remainder of the island. The wet zone supports more than three-quarters of the total popula- tion and accounts for about 70% of the cultivated land. The Economy 2.02 The average per capita income is low (US$150 in 1975). Government policies have resulted in a well-developed system of health care and other public services, a high literacy rate, and an absence of extreme poverty. These developments, however, have not been accompanied by a satisfactory growth in output, and, since 1970, the annual increase in gross national pro- duct (GNP) has averaged 2.5%, somewhat higher than the population growth rate of 1.7%. The slow pace of economic development is mainly due to inadequate investments in the productive sectors. Due to the poor production perfor- mance, the employment situation has deteriorated and about one-third of the labor force is unemployed or severely underemployed. During recent years, prices of major imports, foodgrains, fertilizers and petroleum products have risen sharply while price increases for the main exports, tea, coconuts and rubber, have been relatively moderate, and the country now faces a severe foreign exchange shortage. The budgetary resources of the Government are barely adequate to cover its current expenditures, leaving most capital formation to the vagaries of external assistance. Agricultural and Irrigation 2.03 Agriculture contributes about one-third of the GNP, more than one- half of all employment, and over four-fifths of export earnings. About half of the total cultivated area of 5.0 M ac is under tree crops, primarily tea, rubber and coconuts. The other half is under field crops, principally paddy (1.8 M ac), manioc (0.3 M ac) and chillies, maize and pulses (about 0.1 M ac each). The cropping intensity on paddy lands ranges from about 185% in the wet zone to about 110% in the dry zone. The average for the country is about 150%. 2.04 In the decade ending in 1973, agricultural output increased at an annual rate of 2.3%. Production in subsequent years has been adversely affected by droughts. While foodgrain production increased 3.1% annually, output in the tree crop sector increased 1.2% annually. The poor performance of the tree crop sector is largely a result of inadequate investments due to low financial returns and an uncertain investment climate. Production of field  -3- crops has suffered from poor water management, scarcity of farm inputs, lack of adequate farm power for tillage, poor extension services, marketing and credit facilities and from a system of controls and subsidies which reduced farmer incentive. Measures taken during the past few years to increase field crop output have included: increases in guaranteed price levels; lifting of controls on movement of paddy; banning imports of subsidiary crops such as chillies, onions, potatoes and pulses; establishment of Agricultural Pro- ductivity Committees (APCs) to improve the supply of farm inputs and support- ing services, and most importantly, an increased emphasis on efficient water utilization and management. 2.05 Irrigation in Sri Lanka dates back to about 600 B.C., when a series of village tanks for local rainwater storage were constructed in the north. Over the last century, many of these tanks have been reconditioned and incor- porated into new irrigation systems. Currently, about 900,000 ac, throughout the island, are irrigated and efforts are continuing to expand the area. In addition, the Government has undertaken a number of multipurpose water develop- ment projects, including the Gal Oya, Uda Walowe and Mahaweli Ganga. The Mahaweli Development Scheme 2.06 The Mahaweli Ganga is Sri Lanka's largest river, draining an area of about 4,000 sq mi. It rises in the mountainous south-central part of the island, which receives an annual rainfall of 175-200 inches, and discharges an average of about 7 M ac-ft annually into the Bay of Bengal. It is the principal source of water for irrigation in the dry zone. The Master Plan for Mahaweli Development, formulated by a UNDP/FAO team in 1968 envisages: provi- sion of irrigation to about 650,000 ac of undeveloped land; improvement in the water supply to and partial rehabilitation of about 250,000 ac of existing irrigated land; and development of about 510 MW of hydropower from multipur- pose reservoirs. It would also create the potential for a further development of about 460 MW of hydropower in single purpose reservoirs. As a result of the great importance attached to increased food production, the emphasis in the present implementation program is on irrigation, leaving much of the power development to later stages. 2.07 Construction of Stage I of the Master Plan began with Bank Group assistance in 1972 and is now nearly completed. It consists of a transbasin diversion from the Mahaweli Ganga at Polgolla to the present project area, provision for an assured water supply to some 130,000 ac of existing irrigated lands and a 40 MW power station. Stage II works, which would utilize water di- verted by Stage I to provide irrigation to 71,000 ac of new land, were started in 1974. So far, irrigation infrastructure has been completed for 6,100 ac and work is in progress on 24,600 ac. The proposed project would complete Stage II, and provide agricultural extension services to the 71,000 ac as well as to 35,000 ac of adjacent irrigated lands. Settlement Schemes 2.08 Since the turn of the century, many settlement schemes have been introduced to relieve overpopulation and unemployment in the more densely  - 4 - populated areas of the wet zone. During the late 1950s and early 1960s, settlers were admitted to the schemes prior to land development and were left to do this work themselves. This resulted in a slow build up of benefits, a wasteful use of water and a high drop-out rate. On the recommendation of an FAO/IBRD Mission in 1966, some major colonization schemes were reorganized as "Special Projects" under Resident Project Managers in order to increase agri- cultural productivity and utilize irrigation water more efficiently. The success of these projects, resulted in the extension of the "Special Projects" program in 1969. However, the expansion has been limited due to the shortage of qualified and experienced managers. 2.09 In recent years, the Government has also experimented with collec- tive farming and self management in low cost programs such as Youth Settle- ment Schemes, Cooperative Farms and District Development Council Schemes. An assessment of all these schemes, made by the Agrarian Research and Training Institute (ARTI) in 1974, showed that few of them have been successful in achieving the desired objectives due to inadequate supporting services, in- appropriate settler selection, lack of competent management and insecure tenure. Rural Institutions and Legal Framework 2.10 During the early 1970s, rural institutions underwent a drastic change. A number of laws were enacted to increase agricultural productivity and to achieve a more equitable income distribution. The Agricultural Pro- ductivity Law (APL) of 1972 and the Agricultural Lands Law (ALL) of 1973 established the Agricultural Productivity Committees (APCs) and reorganized the Cultivation Committees (CCs). The APL obliges all owners and occupiers of agricultural land to use it to the maximum benefit of the country and provides for dispossession from owners or tenants who do not properly utilize their land. The ALL regulates tenants' rights and provides for security of tenure and prescribes rents payable to landlords. 2.11 The APCs have the responsibility to promote, coordinate and develop agriculture in the areas they cover (typically 10,000 ac) and to assist the Ministry of Agriculture and Lands (MAL) in formulating and implementing annual programs for crop and livestock production. They are directly responsible, through the CCs (each covering about 1,000 ac), for the water distribution below the 50 ac level. Because of their power to regulate cropping patterns, the APCs also have a responsibility for the overall water allocation within their areas. The APCs and the CCs, whose members are appointed by the MAL, do not have any professional staff. They work through, in cooperation with, and to a large extent under the supervision of the Government's technical staff. The most important task of an APC is the preparation of the Annual Production Program, which is done in consultation with the Government's agri- cultural officers. The program is then subject to the approval of MAL and the District Government Agent. In this process the APC represents the far- mers' interests, while the Government staff provides the technical input and assures the feasibility of the program.  - 5 - III. THE PROJECT AREA General 3.01 The project area is located in Anuradhapura, Kurunegala and Matale Districts in north-central Sri Lanka. The proposed project would cover a con- tiguous area of 106,000 ac; comprising 35,000 ac of old irrigated land, 30,700 ac presently under development and 40,300 ac of undeveloped or new land (Map 11908R and Annex 1, para 2). The estimated population in the project area is about 140,000, with an average family size of 5.5 persons. All project com- ponents would be provided to the main project area of 40,300 ac. The other areas would benefit only from selected project components. Climate (Annex 1) 3.02 Climate is tropical with mean monthly temperatures ranging from 76 F