Announcement of IDA to Support Irrigation and Agricultural Development in Sri Lanka on June 25, 1981

, FOR IMMEDIATE RELEASE .world Bank ·1 WI 8 H Street. N.W., Washington, O.C. 20433, U.S.A.• Tel.ephone: (202) 477-1234 IDA PRESS RELEASE NO. 81/106 June 25 , 1981 IDA TO SUPPORT IRRIGATION AtW AGRICULTURAL DEVELOPMENT IN SR I LANKA The I nternat i ona 1 Deve 1opmen·t Association (IDA) has approved a credit of SOR 73.3 million ($90 mil lion) to Sri Lanka for a third project which wi 11 provide irrigation and agricultural development faci1 ities in the Mahawe1i Ganga Basin. IDA is the World Bank's affiliate for concessionary lending. The Mahawe1i Ganga is Sri Lanka's largest river, and upon completion of a full development program wi 11 irrigate about 365,000 :iectares of irrigable land in the dry zone. The !DA-supported project is part of the overall Mahawe1i Ganga Development Scheme formulated in 1968. The total project area comprises about 28,000 h•:!Ctares of net irrigable land in System C, located along a 70-kilometer stretch of the river's right bank about ~idway down the river's course. The project includes construction of irrigation works, social infrastructure, land settlement, support services for agriculture, access roads, equipment, monitoring ~rograms, and technical assistance. Irrigation works entail completion of a 31-kilometer- ._,ong transbasin canal, construction of other canals and drainage works, and land-clearing and on-farm development in preparation for the arrival of settlers and to help them attain fu 1 1 p rod u c t i on 1eve 1s rap i d 1y . As s i s tan c e a 1so w i 1 1 be extended to set t 1er fam i 1 i es in the form of corehouse grants, seeds, and tools, and training in water management and cropping techniques. Rice will be the main irrigated crop in the area, yielding 126,300 additional tons yearly at full project development. Other crops include pepper, cocoa, and coffee, and an assortment of other annual crops for local consumption. Fuelwood and cashew planta- tions also wi 1.1 be established. The $201.8 million project will benefit about 28,000 families, most of whom are currently landless or operating sub-economic holdings, by providing them with a firm f i nan c i a 1 base i n i r r i gated ag r i cu 1 tu re • The de v e 1opm en t of cu r re n t I y u n exp I o i t e d and underutilized land in the Mahaweli Ganga Basin will reduce rice imports and increase foreign exchange earnings from agricultural exports. Co-financing arrangements are being made with the Government of Japan ($45 million) and the,Kuwait Fi;·nd ($45 mi1lion). The IDA credit is for 50 years, inc1uding 10 years of grace, and is interest- free, except for a service charge of 3/4 of 1% per annum, to cover IDA's administrative costs. The credit will be committed when funds are available~ IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S.dollar equivalent of the SOR amount of the tDA credit ref1ects ihe exchange rate existing at the time of negotia- tion of the credit. FOAM NO. 1121 (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Mahaweli Ganga Development Project I I I Sri Lanka $201.8 mi I I ion • IDA FINANCING: SOR 73.3 mil i ion ($90 mi I I ion), standard IDA terms OTHER FINANCING: Government of Japan, $45 mil I ion Kuwait Fund, $45 mill ion Government of Sri Lanka, $21 .8 mil I ion IMPLEMENTING ORGANIZATION: The Mahawel i Authority 500 T.B. Jayah Mawatha ColClllbo 10, Sri Lanka PROJECT DESCRIPTION: The project consists of: (i) completion of the Minipe Right Bank Transbasin Canal scheduled to supply ful I irrigation facil- ities to the System C developmental area and supplemental irrigation to System B, located in Sr i Lank a I s i n t e rm e d i ate and d r y zones ; ( i i ) p r o v i s i on o f i r r i g a t i on and d r a i nag e i nfr a - structure, land clearing and on-farm development, social and managerial infrastruct~, fuelwood and cashew plantations, and settlement services in the northern part of Systet9', including about 18,500 hectares (ha) of newly irrigated area; and (iii) technical assistance, monitoring, equipment, and maintenance services benefitting the whole of System C involving 24,100 ha of newly irrigated land and 3,600 ha of currently irrigated area. PROCUREMENT: Main drains and a construction camp will be procureJ through local competitive bidding (LCB) procedures acceptable to IDA. Mechanized land-clearing and on-farm development will be grouped into contracts of at least $0.75 mi Ilion and the work procured through LCB. Land clearing to be done manually wi 11 be divided into small contracts and awarded through LCB and through fixed rate contracts to small local contractors and settlers. Equipment and vehi,~les to be financed by IDA will be procured through international competitive bidding~ Small items valued at Jess than $50,000 each wi II be procured after quotations fr001 at le~st three independent suppliers. CONSULTANTS: The project wi I 1 require about 27 man-years of technical assi5- tance for planning and scheduling project implementation works, contract administration and construction supervision of irrigation and drainage works and soc i a 1 i nfr a st r uct u re , and for genera 1 a g r i cu 1t u r a 1 de ve 1o pm en t and wa t er man a gem en t • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 18% 1987 - 0 - •