US embassy cable - 03COLOMBO1820

UNCLAS SECTION 01 OF 02 COLOMBO 001820 
 
SIPDIS 
 
DEPT PLEASE PASS TO OES/PCI - AARON SALZBERG, 
USAID, EPA, HHS AND DEPT OF INTERIOR; KATHMANDU FOR 
REO 
 
E.O. 12958: N/A 
TAGS: ECON, EAID, KSCA, SENV, TSPL, CE 
SUBJECT: SRI LANKA - AN EXCELLENT CANDIDATE MODEL 
COUNTRY ON WATER FOR THE UN COMMISSION ON 
SUSTAINABLE DEVELOPMENT 
 
REF: STATE 275504 
 
1. Summary: Sri Lanka is an ideal model candidate 
on water.  The GSL has identified water as a 
priority and has the political will and adequate 
good governance to see it happen.  Because of the 
government's intentions to provide safe water to 
the entire population by 2010, improve water 
management, invite private sector participation and 
review water pricing, it is a good time to engage 
stakeholders to develop projects.  There is 
substantial international donor financing, local 
expertise and a role for the private sector.  Post 
would be willing to facilitate creation of 
partnerships. End Summary. 
 
Current Situation 
----------------- 
2. There is a need for action in this sector: water 
supply reaches only 57% of the rural population and 
piped water is available to only 29% of the 
population.  The GSL has identified water as a 
priority and has included water in its development 
agenda.  The Government has adopted a water policy, 
which seeks to provide safe water to the entire 
population by 2010, improve water management, 
invite private sector participation and water 
pricing.  Supporting legislation is expected to be 
presented to Parliament in 2004. 
 
3. Sri Lanka wants to be a leader for the 
developing world in providing social 
infrastructure, including safe water.  The GSL 
wishes to promote people-friendly water projects 
and also private/public partnerships in the water 
sector.  A project on a municipal or village scale 
is feasible, and could provide a viable model. 
 
Donor Support 
------------- 
4. There is substantial international donor support 
for Sri Lanka's water sector. Some of the donor 
money pledged in Tokyo Donors' Conference($4.5 
billion) will go toward water projects not yet 
identified.  Current ADB projects include Water 
Supply and Sanitation ($75 million) and Water 
Resource Management ($28 million).  Proposed ADB 
projects include $60.3 million for a secondary town 
and rural water project to expand access to safe 
water and sanitation in three provinces, including 
areas affected by the war, and a greater Colombo 
waste water treatment project.  ADB Technical 
Assistance will support water supply sector reforms 
with assistance to establish a water regulator in 
the public utilities commission. 
 
5. Other donors include the World Bank, which 
proposed a loan of $40 million for community water. 
Two additional sewerage projects are being planned 
with Japanese funding for Kandy and Nuwara Eliya, 
cities located in the hill country.  To date, post 
support for this sector has been through USAID/AEP 
in the areas of training, technical assistance and 
capacity building for water sector professionals 
and planners.  Post could facilitate linkages 
between the major donor agencies, local experts and 
private sector participants. 
 
Existing Mechanisms and Coordination 
------------------------------------ 
6. The National Water Supply and Drainage Board, 
under the Ministry of Housing and Plantation 
Infrastructure, currently is the principal 
authority for provision of safe drinking water and 
sanitation facilities.  The draft National Water 
Resources Law contains provisions for equitable 
water allocation and pricing, and the establishment 
of a National Water Resources Authority (NWRA). 
NWRA will guide the implementation of the water 
act, coordinate activities of agencies active in 
water planning and water use, and will be 
responsible for planning of water at the national, 
multi-basin and basin-aquifer level.  There will 
also be an independent regulatory authority to set 
tariffs and regulate water delivery quality. 
 
7. The draft policy also considers water a basic 
human need and but also recognizes its economic 
value.  According to the policy, users should 
contribute to investments and bear the recurrent 
costs of drinking water, and utilizing sewage and 
sanitation services.  The new modes of delivery of 
safe water and primary sanitation facilities will 
increasingly rely on public-private partnerships. 
 
8. Comment: The GSL is pursuing economic reform and 
peace, while trying to strengthen the social 
infrastructure.  It is also pursuing a more 
activist stance in international organizations, 
striving to be a leader in the region.  Post 
believes it would welcome this opportunity to be a 
model.  End comment. 
 
LUNSTEAD