VZCZCXRO3031
RR RUEHHM RUEHLN RUEHMA RUEHPB
DE RUEHLM #1595/01 2711145
ZNR UUUUU ZZH
R 281145Z SEP 06
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 4360
INFO RUEHLMC/MILLENNIUM CHALLENGE CORP
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

UNCLAS SECTION 01 OF 02 COLOMBO 001595 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR OES/PCI AARON SALZBERG AND TEGAN BLAINE 
USAID FOR TIM MILLER AND D DEELY 
 
E.O 12958: N/A 
TAGS: SENV CE
SUBJECT: SRI LANKA - ADVANCING US EFFORTS ON WATER AND SANITATION 
 
REFERENCE: A) STATE 128229 B) STATE 128599 
 
COLOMBO 00001595  001.2 OF 002 
 
 
¶1.  SUMMARY: A high percentage of Sri Lanka's rural population does 
not have access to safe drinking water and proper sanitation. It is 
estimated that over 40 percent of the rural population, or more than 
6 million people, are deprived of these basic facilities. 
Recognizing the scope of the issue, the Government of Sri Lanka 
(GSL) has formulated a national policy for rural water and 
sanitization sector to: (1) Provide safe drinking water to 85 
percent of the population by 2010 and 100 percent by 2025; and (2) 
Provide access to adequate sanitation for 70 percent of the 
population by 2010 and 100 percent by 2025. However, the GSL does 
not have the financial resources to achieve these objectives within 
the stipulated time frame. End Summary. 
 
¶2. According to Piyasena Wellakkage, Director General, Rural Water 
Supply and Sanitation Division of the Ministry of Urban Development 
and Water Supply (MUDWS), although there have been serious attempts 
to address the problems of the unavailability of water supply and 
sanitation facilities, successive governments have concentrated 
mainly in urban areas.  Rural areas were largely neglected.  The 
water schemes in rural areas, which have been implemented by local 
authorities as well as NGOs, are devoid of proper planning.  Per 
Wellakkage, the rural water schemes do not provide for operation and 
maintenance of the schemes and lack active community participation. 
As a result, less than one percent of such schemes previously 
initiated still operate. 
 
¶3.  In 1992, the Rural Water Supply and Sanitation Division of the 
MUDWS initiated a new approach to water supply and sanitation 
projects by involving communities at all stages of the project, 
including design, implementation, labor, hygiene education and 
management.  This methodology has proven successful. 
 
¶4. All of the focal areas for possible USG engagement identified in 
reftels are important in the context of the water supply and 
sanitation sector in Sri Lanka. Priority areas for USG activities 
could be Governance, Infrastructure Investment, and Mobilization of 
Domestic Resources. 
 
GOVERNANCE: 
 
¶5.  The GSL wants to increase institutional capacity to strengthen 
the impact and sustainability of water supply and sanitation 
projects. The Minister of Urban Development and Water Supply, in a 
recent media report, stressed the need for more focus on safe 
drinking water for rural areas due to the high percentage of the 
population lacking this basic facility.  The World Bank funded a 
pilot Community Water Supply and Sanitation Project (CWSSP) under 
the MUDWS from 1992 to 1998 to provide safe drinking water and 
sanitation facilities to rural communities in three districts of the 
country.  This project was launched with participation of Community 
Based Organizations (CBOs) and contribution of capital cost (mainly 
through labor) by the beneficiaries.  Under this project, the CBOs 
played a key role in identifying needs, planning, design, 
constructing and ultimately owning the facilities, and taking 
responsibility for operating and maintaining the facilities. 
 
¶6.  This CWSSP project has been favorably reviewed by the World Bank 
and was ranked highest among similar projects implemented worldwide. 
 The success of this project resulted in several new community-based 
WSS projects, including a second CWSSP funded by the World Bank and 
the Japan Bank for International Cooperation (JBIC).  Under the 
second CWSSP, MUDWS delegated to local government authorities the 
responsibility for assisting and coordinating CWSSP activities with 
the CBOs. 
 
¶7.  A criticism of this reportedly successful project is that local 
governments have not performed their responsibilities in the desired 
manner due to lack of competent personnel and indifferent attitude, 
as no direct benefits accrue to the local authorities due to the 
manner in which the CBOs are set up. (All procurement and contracts 
are decided by CBOs and not by the local authorities.) 
 
¶8. To address these shortcomings, the MUDWS is considering 
establishing an independent agency free of political involvement in 
order to develop the established CBOs and achieve national status. 
This agency would have responsibility for assisting and coordinating 
CBO activities nationwide.  Capital expenditure, capacity building, 
rehabilitation of some water supply and sanitation schemes, action 
oriented training of CBOs, IT software skills development and 
providing computers to CBOs, are some of the areas which the new 
agency will need to address in order to successfully develop the 
CBOs.  In addition, the MUDWS is focusing on providing a revolving 
loan fund for sanitation projects, identifying selected CBOs in 
areas most in need of sanitation facilities.  Technical and 
financial assistance to set up this fund will also be valuable. 
 
INFRASTRUCTURE INVESTMENT: 
 
COLOMBO 00001595  002.4 OF 002 
 
 
 
¶9.  The positive developments resulting from the two CWSSP projects 
warrant replication of these projects in districts that do not have 
safe drinking water and sanitation facilities (including the 
northeast, where Sri Lanka's ethnic conflict is centered).  This 
would provide additional communities with safe drinking water, 
sanitation, and protection against the water-borne diseases that are 
the primary cause of poor health in rural communities. 
 
MOBILIZATION OF DOMESTIC RESOURCES: 
 
¶10.  Private sector involvement in water supply and sanitation 
projects has been negligible.  Private sector investment should 
leverage water supply and sanitation activities to complement the 
activities of the GSL and donors.  The expertise and commercial 
approach of the private sector could assist in promoting sound 
utility management and cost recovery, and will assist CBOs in 
managing their schemes effectively. 
 
¶11. Current US involvement in the water supply and sanitation sector 
includes long-running USAID programs and post-tsunami USAID 
activities to improve water supply and distribution to 
tsunami-affected communities in the eastern part of the country.  An 
 
SIPDIS 
assessment of water from existing reservoirs and groundwater sources 
has been completed in the Pottuvil/Panama area of Ampara District. 
USAID contractor CH2M Hill concluded that groundwater is the best 
water supply choice for the area as it is more sustainable, higher 
quality, would lower the cost of water treatment, and avoid the need 
to transmit water long distances from reservoirs to population 
centers.  The project will also address sanitation needs of the 
targeted communities through a public health education program that 
includes discouraging people from using water from shallow polluted 
wells.  A budget of approximately $4 million has been allocated for 
the project. 
 
¶12.  Another USAID regional project with activities in water supply 
and sanitation is Environmental Cooperation-Asia (ECO-Asia). 
ECO-Asia addresses improving access to water and sanitation, and 
environmental governance.  One pilot site will be in Nuwara Eliya, 
where ECO-Asia will develop and demonstrate sustainable sanitation 
systems through a participatory process for identifying priority 
sanitation challenges, preparing action plans, identifying 
appropriate technology and system designs and financing options and 
carrying out awareness.  This will involve the Local Authority, 
NGOs/CBOs, and the community as stakeholders.  Another pilot project 
will be implemented with the National Water Supply and Drainage 
Board to establish a public private community partnership to deliver 
water to urban poor. 
 
¶13.  Comment: The water supply and sanitation sector is primarily 
under government purview, with the Ministry of Urban Development and 
Water Supply being the focal point for all rural water and 
sanitation activities, including donor funded projects.  The GSL is 
committed to providing safe water and sanitation for the population. 
 However, lack of resources inhibits the GSL's ability to achieve 
WSS objectives set out in its national policy.  There is wide scope 
for US assistance and the Director General and National Project 
Director of the Ministry of Urban Development and Water Supply is 
enthusiastic about the possibility of receiving US support in this 
sector.  End Comment. 
 
BLAKE