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Completion Report

Project Number: 44065-013 Loan Number: 2626 Grant Number: 0246 August 2017

Sri Lanka: Conflict-Affected Region Emergency

Project This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.

CURRENCY EQUIVALENTS

Currency Unit – Sri Lanka rupee/s (SLRe/SLRs)

At Appraisal At Project Completion 10 November 2009 30 September 2014

SLRe1.00 = $0.0087 $0.0077 $1.00 = SLRs114.70 SLRs 130.43

ABBREVIATIONS

AADT ADB

– –

average annual daily traffic Asian Development Bank

AGA BCR

– –

Assistant Government Agent borrower’s completion report

CAREP – Conflict-Affected Region Emergency Project CEB – Ceylon Electricity Board CECB – Central Engineering Consultancy Bureau CPS – country partnership strategy DAD – Department of Agrarian Development DMF – design and monitoring framework EIRR – economic internal rate of return HDM

IDP – –

Highway Development and Management internally displaced person

MED – Ministry of Economic Development MOJ – Ministry of Justice MPAHA – Ministry of Public Administration and Home Affairs NCP – North Central Province NCPID – NCP Irrigation Department NCPRDA – NCP Road Development Authority NECORD – North East Community Restoration and Development NPBD – Northern Province Provincial Building Department NPID – Northern Province Irrigation Department NPRDD – Northern Province Road Development Department NWSDB – National Water Supply and Drainage Board PCQAU – Project Coordination and Quality Assurance Unit PCR

PIU – –

project completion report project implementation unit

PMU RDA

– –

project management unit Road Development Authority

RRP – report and recommendation of the President SWE – salt water exclusion UN

UNDP VOC VOTT

– – – –

United Nations United Nations Development Programme vehicle operating cost value of travel time

WEIGHTS AND MEASURES

ha

kg – –

hectare kilogram

km kV l m3

MW

– – – – –

kilometer kilovolt liter cubic meter megawatt

GLOSSARY

grama niladhari – village-level administrator appointed by government maha – monsoon cropping season mm/an – millimeter per annum Pradeshiya Sabha – periurban or rural area local council Samurdhi – government assistance scheme for low-income families yala – dry season cropping season

NOTE

In this report, "$" refers to US dollars unless otherwise stated.

Vice-President W. Zhang, Operations 1 Director General H. Kim, Director General, South Asia Department (SARD) Director Sri Widowati, Sri Lanka Resident Mission, (SARD) Team leader A. Nanayakkara, Senior Project Officer (Road and Transport), SARD

Team members N. Amarasekera, Project Analyst, SARD

N. M. Amerasinghe, Project Management Specialist, SARD K. Dahanayake, Project Officer (Infrastructure), SARD A. G. Prashanth, Associate Project Analyst, SARD N. Salgado, Infrastructure Specialist, PARD R. Wimalasena, Senior Project Officer (Energy), SARD

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA i

I. PROJECT DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 2

A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 7 D. Disbursements 8 E. Project Schedule 8 F. Implementation Arrangements 9 G. Conditions and Covenants 9 H. Consultant Recruitment and Procurement 10 I. Performance of Consultants, Contractors, and Suppliers 10 J. Performance of the Borrower and the Executing Agency 11 K. Performance of the Asian Development Bank 11

III. EVALUATION OF PERFORMANCE 11

A. Relevance 11 B. Effectiveness in Achieving Outcome 12 C. Efficiency in Achieving Outcome and Outputs 13 D. Preliminary Assessment of Sustainability 13 E. Impact 14

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14

A. Overall Assessment 14 B. Lessons 15 C. Recommendations 15

APPENDIXES

1. Design and Monitoring Framework 16 2. Description of Outputs 23

3. Implementation Timeline and Schedule 32

4. Complementary Development Projects 35

5. Social, Environmental, and Gender Assessment 39

6. Detailed Cost Table by Financer and Category 56

7. Implementation and Management Arrangements 57

8. Compliance with Loan Covenants 59

9. Consulting Services 66

10. Contractors 70

11. Economic Analysis 75

BASIC DATA A. Loan and Grant Identification 1. Country 2. Loan Number/ Grant Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

Sri Lanka 2626 / 0246 Conflict-Affected Region Emergency Project Government of Sri Lanka Ministry of Economic Development1 $150,000,000 1651

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years) 8. Terms of Relending (if any) – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower

No appraisal mission was conducted. The fact finding mission was conducted 10 November 2009–1 December 2009 9 March 2010 9 March 2010 15 April 2010 7 June 2010 7 September 2010 2 September 2010 0 30 September 2013 30 September 2014 2 London interbank offered rate 32 8 Not applicable

1 During loan approval, the executing agency was identified as the Ministry of Nation Building and Estate

Infrastructure Development, which was later renamed the Ministry of Economic Development.

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9. Disbursements a. Dates Initial Disbursement

28 October 2010

Final Disbursement

6 January 2016

Time Interval

62.3 months

Effective Date

3 September 2010

Original Closing Date

30 September 2013

Time Interval

36.92 months

b. Amount ($)

Category or Sub loan Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance

01 Civil Works 01A. Civil Works-National Roads

26,790,000 30,620,000 30,620,000 29,670,738 949,262

01B Civil Works-Provl Roads-NP

24,550,000 26,921,000 26,921,000 25,305,656 1,615,344

01C Civil Works-Pradeshiya Rds-NCP

1,340,000 1,312,000 1,312,000 1,187,680 124,320

01D Civil Works-Power 23,290,000 13,770,000 13,770,000 12,523,315 1,246,685 01E Civil Works-Water 3,500,000 8,600,000 8,600,000 6,839,104 1,760,896 01F Civil Works-Irrigation-NP

13,500,000 29,841,124 29,841,124 28,546,655 1,294,469

01G Civil Works-Irrigation-NCP

2,000,000 15,940,150 15,940,150 12,871,100 3,069,050

01H CW-Administration Infrastructure

6,000,000 7,900,000 7,900,000 7,958,486 (58,486)

01I Civil Works-VTC 3,400,000 0 0 0 0 01J Civil Works-Legal 5,400,000 4,100,000 4,100,000 4,049,521 50,479 02 Equipment

02B Equipment-Provincial Roads

450,000 515,000 515,000 485,471 29,529

02E Equipment-Water 1,500,000 2,080,000 2,080,000 1,976,864 103,136 02F Equipment-Irrigation-NP

400,000 60,200 60,200 54,854 5,346

02H Equipment-Administration Infrastructure

1,000,000 1,000,000 1,000,000 655,421 344,579

02J Equipment-Legal 3,000,000 750,000 750,000 790,393 (40,393) 03 Consulting Services

Consultancy- 03A Desn&Spvsn-Natl Roads

1,790,000

1,380,000

1,380,000

1,600,793

(220,793)

03B Consultancy-Desn&Spvsn-Provl Rds-NP

2,680,000 0 0 0 0

03E Consultancy-Desn&Spvsn-Water

270,000 65,526 65,526 57,170 8,356

03F Consultancy-Desn&Spvsn-Irrigation-NP

90,000 0 0 7,725 (7,725)

03H Consultancy-Dsgn&Spvsn-Admin Infrastrctr

220,000 0 0 0 0

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Category or Sub loan Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance

03I Consultancy-Dsgn&Spvsn-VTC 180,000

0

0

3,341

(3,341) 03J Consultancy-Dsgn&Spvsn-Legal 440,000

0

0

0

0

04 Incremental 04A Incremental-National Roads

270,000 515,000 515,000 433,711 81,289

04B Incremental-Provl Roads-NP

440,000 520,000 520,000 413,061 106,939

04C Incremental-Predeshiya Roads-NCP

180,000 160,000 160,000 117,754 42,246

04E Incremental-Water 270,000 400,000 400,000 335,317 64,683 04F Incremental-Irrigation-NP

350,000 330,000 330,000 235,896 94,104

04G Incremental-Irrigation-NCP

90,000 110,000 110,000 83,864 26,136

04H Incremental-Administration Infrastrctr

270,000 250,000 250,000 89,124 160,876

04I Incremental-VTC 180,000 0 0 0 0 04J Incremental-Legal 360,000 360,000 360,000 89,829 270,171 04K Project Mgnt-PCQAU 1,000,000 1,000,000 1,000000 422,479 577,521 05 Int. & C. Charge 4,080,000 1,500,000 1,500,000 1,367,037 132,963 06 Unallocated 06A Unallocated-National Roads

4,320,000 0 0 0 0

06B Unallocated-Provl Roads-NP

4,220,000 0 0 0

06C Unallocated-Pradeshiya Roads-NCP

230,000 0 0 0

06D Unallocated-Power 4,770,000 0 0 0 06E Unallocated-Water 830,000 0 0 0 06F Unallocated-NP 2,150,000 0 0 0 06G Unallocated-NCP 310,000 0 0 0 06H Unallocated-Administration Infrstrctr

1,120,000 0 0 0

06I Unallocated-VTC 1,010,000 0 0 0 06J Unallocated-Legal 1,010,000 0 0 0

Total 150,000,000 150,000,000 150,000,000 138,172,361 11,827,639

NCP = North Central Province, NP = Northern Province, PCQAU = Project Coordination and Quality Assurance Unit, VTC = Vocational Training Center, CW = Civil Work, ( ) = negative

10. Local Costs (Financed) - Amount ($) Not applicable, as there is no breakdown of

local costs at loan approval - Percent of Local Costs - Percent of Total Cost

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C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate

Actual

Foreign Exchange Cost 168.24 Local Currency Cost Not Applicable Not Applicable Total 168.24

2. Financing Plan ($ million)

Cost Appraisal Estimate Actual

Implementation Costs

Borrower Financed 18.24 12.69 ADB Financed 145.92 136.80 Other External Financing International Federation of Red Cross and Red Crescent Societies

0.00 1.4

Total 164.16 150.89

IDC Costs Borrower Financed ADB Financed 4.08 1.37 Other External Financing

Total 168.24 152.26

ADB = Asian Development Bank, IDC = interest during construction.

3. Cost Breakdown by Project Output ($ million)

Output Appraisal Estimate Actual

Output A National 32.30 34.61 NP–Provincial, Municipal & Urban 31.50 28.84 NCP–Pradeshiya 1.70 1.46 Output B Power 26.70 14.07 Water 6.20 11.75 Output C NP Irrigation 16.07 27.20 NCP Irrigation 2.34 6.65 Small Tanks 10.86 Vocational Training 7.57 0.00 Administrative Infrastructure 8.39 9.43 Output D 7.79 5.54 Project Management 1.12 0.46 Contingencies 22.49 0.00 Interest Charges 4.08 1.37

Total 168.24 152.26

NCP = North Central Province, NP = Northern Province

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4. Project Schedule

Item Appraisal Estimate Actual

Date of Contract with Consultants Project Implementation Consultants (National Roads)

Q2 2010 – Q1 2013 Q3 2011 – Q3 2014

Civil Works Contract (First Procurement) Output A – National Roads Q3 2010 – Q1 2013 Q3 2011 – Q3 2014 Output A – Northern Province Roads Q3 2010 – Q1 2013 Q3 2011 – Q4 2013 Output A – North Central Province Roads Q3 2010 – Q1 2013 Q1 2011 – Q3 2014 Output B – Water Q3 2010 – Q2 2013 Q3 2011 – Q2 2014 Output B – Power Q3 2010 – Q2 2013 Q2 2011 – Q3 2014 Output C – Northern Province Irrigation Q3 2010 – Q4 2012 Q3 2011 – Q4 2013 Output C – North Central Province Irrigation Q3 2010 – Q4 2012 Q4 2011 – Q3 2014 Output C – Public Administration Q3 2010 – Q4 2012 Q4 2011 – Q3 2013 Output D – Legal Q3 2010 – Q4 2012 Q4 2010 – Q3 2013 Equipment and Supplies Output A – Northern Province Roads Q3 2010 – Q4 2010 Q3 2011 – Q4 2011 Output B – Water Q2 2010 – Q3 2011 Q1 2013 – Q3 2014 Output C – Northern Province Irrigation Q3 2010 – Q3 2011 Q3 2011 – Q4 2011 Output C – Public Administration Q3 2010 – Q3 2011 Q1 2014 – Q3 2014 Output D – Legal Q3 2010 – Q3 2011 Q3 2013 – Q4 2013

5. Project Performance Report Ratings

Implementation Period

Ratings

Development Objectives

Implementation Progress

2 September 2010–31 December 2010 Satisfactory Satisfactory

1 January 2011–31 March 2011 On Track

31 March 2011–31 December 2011 Actual Problem 1 January 2012–30 June 2012 Actual Problem 30 June 2012–31 December 2012 On Track 1 January 2013–31 March 2013 On Track 31 March 2013–31 December 2014 Potential Problem 1 January 2014–30 September 2014 On Track

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D. Data on Asian Development Bank Missions

Name of Mission

Date

No. of Persons

No. of Person-

Days

Specialization of Members

Fact Finding Mission 10 Nov–1 Dec 2009 14 294 a,b,c,c,c,c,d,e,f,g,h,i,j,k

Review Mission 1 26–29 Apr 2011 2 6 c,l Review Mission 2 30 Nov–3 Dec 2011 1 3 c Review Mission 3 30 Jan–2 Feb 2012 8 33 c,m,n,o,p,q,r,s Review Mission 4 23 Apr–7 May 2012 4 70 t,u,v,w Review Mission 5 7–12 May 2012 1 5 c Procurement Review Mission 30 Jul–3 Aug 2012 2 8 x,y Midterm Review Mission 30 Jul–3 Aug 2012 4 16 b,l,x,y Review Mission 6 12–23 Nov 2012 4 44 c,c,m,w Review Mission 7 8–12 Apr 2013 3 12 c,l,z Review Mission 8 16–19 Dec 2013 4 9 c,g,a Review Mission 9 7–30 Apr 2014 2 46 c,a Review Mission 10 15–23 Sep 2014 3 24 t,g,w Project Completion Review 7 Dec 2015–11 Jan 2016 3 47 c,m,g

a = lead professional; b = head portfolio management unit; c = project implementation officer; d = financial management officer; e = procurement officer; f = principal safeguard specialist; g = assistant project analyst; h = assistant disbursement analyst; i = economics officer; j = gender specialist; k = country director; l = staff consultant; m = portfolio management officer; n = financial control officer; o = senior portfolio management specialist; p = program coordinator, International Federation of the Red Cross and Red Crescent Societies (IFRC); q = water sanitation and hygiene promotion delegate, IFRC; r = senior construction and water sanitation engineer, IFRC; s = coordinator of post conflict recovery program, IFRC; t = senior project officer; u = disbursement officer; v = disbursement analyst; w = associate project analyst; x = senior procurement officer; y = procurement analyst; z = senior portfolio management officer; aa = associate project officer.

I. PROJECT DESCRIPTION

1. The Conflict-Affected Region Emergency Project (CAREP) was formulated from November 2009 to March 2010. It was appraised and approved by the Asian Development Bank (ADB) in April 2010, and is presented in the report and recommendation of the President (RRP). 1 ADB approved a loan (L2626) of $150 million and declared effectiveness on 2 September 2010, with a closing date of 30 September 2013. The project cost at appraisal was $168.24 million, to be funded jointly by the Government of Sri Lanka and ADB. In September 2010, the International Federation of the Red Cross and Red Crescent Societies contributed grant cofinancing of $1.5 million (G0246).2

2. The government requested the project as emergency assistance to meet urgent post-conflict rehabilitation and construction priorities in Sri Lanka’s northern region. This area had been subject to almost 30 years of internal armed conflict until peace was restored in May 2009. 3 A Presidential Task Force, set up in 2009, formulated a strategic framework for revitalizing the region, restoring livelihoods, and sustainably reducing poverty. 4 Within this context, the government and ADB identified interventions that CAREP could support, complementing activities of many other agencies.

3. The impact envisaged in CAREP’s design and monitoring framework (DMF) was to reduce the incidence of poverty in the conflict-affected areas (Appendix 1). The outcomes were to restore and improve livelihood, economic infrastructure, and administrative and legal services to help meet basic needs, thereby improving living conditions and sustainably enhancing livelihood prospects of conflict-affected people in Northern and Eastern provinces, and adjoining areas of North Central Province (NCP). The RRP emphasized the need to restore basic infrastructure to assist in the post-conflict resettlement of the estimated 85,000 to 90,000 internally displaced persons (IDPs) returning to their original areas of residence.

4. The project had four outputs: (i) reestablished connectivity by road rehabilitation; (ii) restored utilities through reconnecting power supplies and constructing or reconstructing water supply schemes; (iii) improved basic social services by rehabilitating irrigation schemes and reconstructing administrative infrastructure; and (iv) improved legal governance through reconstructing court facilities. The sub-outputs, selected in consultation with the government, are described in Appendix 2.

5. The executing agency was the Ministry of Economic Development (MED). 5 The implementing agencies were the following central government agencies: (i) Road Development Authority (RDA), (ii) Ceylon Electricity Board (CEB), (iii) National Water Supply and Drainage Board (NWSDB), (iv) Ministry of Public Administration and Home Affairs (MPAHA),6 (v) Ministry of Justice (MOJ), (vi) Ministry of Vocational Training and Technical Education,7 and (vii) MED

1 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the

Democratic Socialist Republic of Sri Lanka for the Conflict-Affected Region Emergency Project. Manila. 2 ADB. 2010. Conflict-Affected Region Emergency Project – Change in implementation arrangements. Manila. 3 The internal armed conflict refers to the conflict between the government and the Liberation Tigers of Tamil Eelam. 4 Government of Sri Lanka. 2009. Wadakkin Wasantham: Three-Year Development Strategy for Northern Province.

Colombo. 5 Until May 2010 the executing agency was the Ministry of Nation Building and Estate Infrastructure Development;

from April 2010, MED became the executing agency until January 2015. After the presidential election in January 2015, the Ministry of National Policies and Economic Affairs was appointed as the executing agency.

6 Presently referred to as Ministry of Local Government and Provincial Councils. 7 The vocational training centers subcomponent, proposed at appraisal, was dropped by the government in

November 2010. The current ministry name is Ministry of Skills Development and Vocational Training.

2

through a Project Coordination and Quality Assurance Unit (PCQAU).8 Devolved agencies comprised (i) Northern Province Road Development Department (NPRDD) and Northern Province Irrigation Department (NPID), and (ii) NCP Road Development Authority (NCPRDA) and NCP Irrigation Department (NCPID). Appendix 3 shows the project timeline and participating implementing agencies.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

6. The CAREP outputs were designed to restore facilities and services to help reduce the high, post-conflict poverty level (the RRP estimated 37%). The project conformed to the government’s medium-term policy for the north (Wadakkin Wasantham), which includes restoration of roads, electricity, water supplies, and tank9 irrigation, as well as strengthening civil administration, as priorities. It aligned with ADB’s country partnership strategy (CPS), 2009–2011,10 which targeted better delivery of power, water, transport, and other essential services in poor provinces to ensure inclusive development benefits. This was to be achieved by increasing the capacity of provincial councils and local authorities to improve public service delivery, and strengthening rural infrastructure to boost agricultural efficiency.

7. CAREP complemented ongoing ADB projects, such as the North East Community Restoration and Development Project,11 and other externally funded projects (Appendix 4). The project was prepared in a short time, with participation of implementing agencies and following ADB’s Disaster and Emergency Assistance Policy,12 although actual processing exceeded the policy’s 12-week limit. The project administration manual13 defined criteria for selecting sub-output projects that aligned with local government. Where possible, people in affected communities would be consulted in an ethnic- and gender-sensitive manner, and encouraged to participate as wage laborers in implementation. Priority was to be given to marginalized, conflict-affected people and IDPs. The RRP also encouraged the use of contractors from the northern region.

8. A national project steering committee and the PCQAU provided overall project coordination, while implementing agencies reviewed sub-output progress. In each province, district coordinating committees, with the PCQAU coordinator a member, identified local authority and provincial roads, and tank irrigation schemes for intervention, subject to ADB approval. The project therefore had some demand-driven flexibility, enabling implementing agencies to adjust activities to match evolving post-conflict needs. Project implementation units (PIUs), either existing or newly established, managed activities in each implementing agency.

9. Given the development hiatus in the immediate post-conflict period, and that donor agencies continued to offer support, it was inevitable that the government sought to amend the CAREP sub-outputs during implementation. Without compromising the project’s original high relevance, ADB approved several minor changes in scope and implementation arrangements:

8 PCQAU was formed under the project and in 2013 became an implementing agency with the Department of

Agrarian Development (DAD) for small tank rehabilitation. 9 In Sri Lanka, a ‘tank’ is a reservoir, in which a man-made bund (dam) impounds run-off water for storage and use. 10 ADB. 2008. Country Partnership Strategy: Sri Lanka, 2009–2011. Manila. 11 ADB. 2004. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the

Democratic Socialist Republic of Sri Lanka for North East Community Restoration and Development Project. Manila.

12 ADB. 2004. Bank Policies: Disaster and Emergency Assistance. Operations Manual. OM D7/BP. Manila. 13 The project administration manual formed an integral Attachment 4 to the RRP, April 2010.

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(i) August 2010. Requirement by MED that implementing agencies were to use the state-owned enterprise, Central Engineering Consultancy Bureau (CECB), as their design and construction supervision consultants, with government funds used to pay for CECB services.14 This was to expedite the engineering phase.

(ii) March 2012. Reallocation of funds to enable (i) inclusion of rural roads, small-scale irrigation, and rural electrification activities in Welioya, Northern Province, which had been badly affected by the conflict, and (ii) supplementary work for Northern Province roads, water supplies, irrigation, a cultural hall, a quality control laboratory, and an office in Welioya.15

(iii) September 2012. Reallocation of funds for de-silting of small irrigation tanks in NCP, and additional funding to Northern Province roads.

(iv) January 2014. Increase in ADB’s financing percentage on undisbursed loan. (v) February 2014. Retroactive approval of infrastructure improvements to small

tanks, cascades, and rural access roads. (vi) April 2014. Increase in disbursement arrangements by increasing the MED’s

imprest ceiling to $6 million to facilitate payments to many small contractors. (vii) October 2014. Post facto approval of ADB funds to cover transport of goods to

project sites.

10. Overall, the designs—focusing on restoration of connectivity, utilities, and basic social services—were relevant during implementation and at completion. However, the serious disruption of people and severe damage to basic infrastructure during the 30-year conflict weakened the absorptive capacity of implementing agencies, local contractors, and communities, thereby requiring loan extensions.

B. Project Outputs

11. Outputs16 are described, drawing on the borrower’s completion reports (BCRs), and reviewed against the performance targets in the DMF (Appendix 1). Table 1 lists the sub-outputs. These are described in detail in Appendix 2, and reviewed for social, gender, and environmental aspects in Appendix 5. All targets in Appendix 1 were achieved by closure.

Table 1: Outputs and Sub-Outputs

Output and Sub-Output Output and Sub-Output

A. Reestablished Connectivity C. Improved Basic Social Services

A.1 National Roads C.1 NP Small & Medium Irrigation Schemes

A.2 NP Provincial, Municipal & Urban Roads C.2 NCP Small & Medium Irrigation Schemes

A.3 NCP Local Authority Roads C.3 Small Tank & Cascade Irrigation Systems

B. Restored Utilities C.4 Administrative Offices Reconstructed

B.1 Power Supply D. Improved Legal Governance

B.2 Water Supply Schemes D.1 Judicial Centers Reconstructed

NCP = North Central Province, NP = Northern Province. Source: Borrower’s Completion Reports

14 Government of Sri Lanka, MED. 2010. Letter to ADB on 5 August 2010. Colombo. 15 This scope change was subsequently not adopted because of changed government policy. 16 In terms of ADB Results Framework, the project contributed the following: (i) 385 km of roads built or upgraded

compared to a target of 370 km; (ii) use of roads built or upgraded is 500,603 vehicle-kilometers compared to target of 480,580 vehicle-kilometers; (iii) 19,916 hectares of land improved through irrigation compared to target of 6,500 hectares; (iv) 67.2 km of transmission lines installed; and (v) 33,000 households provided with improved water supply compared to target of 35,000 households.

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1. Output A: Reestablished Connectivity

12. Through rehabilitating national, provincial, and local authority roads, this output aimed to increase connectivity for returning IDPs, thereby providing basic services and livelihood recovery and encouraging increased investment. Local and provincial council roads serve communities located away from economic activity centers, These communities normally have high poverty incidence and lack economic opportunities. This output focused on critical network sections to complement work supported by other development partners. Three sub-outputs were included.

13. A.1. National roads. The sub-output envisaged rehabilitating 65 kilometers (km) of two important link roads, with the RDA as implementing agency. The B357 Paranthan to Pooneryn (25.7 km) was rehabilitated by September 2013, and the B269 Mankulam to Vellankulam (40.0 km) was rehabilitated by September 2014. In total, 65.7 km of road were completed.

14. A.2. NP Provincial, Municipal & Urban Roads. The RRP envisaged rehabilitating 100 km of provincial council roads and 80 municipal and urban roads in Northern Province by December 2012. The NPRDD was the implementing agency.

15. The NPRDD completed 25 contract packages for rehabilitating ‘C’ and ‘D’ provincial roads (including two causeways) in Kilinochchi, Mannar, and Vavuniya by September 2013. It completed six additional packages by July 2014. A total of 72.1 km provincial council roads were rehabilitated. The NPRDD rehabilitated or improved 90.5 km of roads by July 2014, comprising 42.0 km of municipal and 48.5 km of urban roads in Jaffna, Mannar, and Vavuniya districts. Most contracts were completed by September 2013, and the remainder by September 2014. The Mannar package had to be split into seven contracts, to suit local contractor capacity, and re-tendered.

16. A.3. Local authority roads. The design planned for rehabilitating or improving 18 km of Pradeshiya Sabha roads in adjoining NCP villages by December 2012. The implementing agencies was the NCPRDA for the Pradeshiya Sabha roads.

17. The NCPRDA rehabilitated and improved 17.9 km of Pradeshiya Sabha roads on time by October 2012.

18. In addition, the project rehabilitated 705 km of rural access gravel roads (agricultural roads) by June 2014 under the irrigation outputs: 307 km under sub-output C.1 (in Jaffna, Vavuniya, and Mannar) and 398 km under C.3 (in six districts of Northern, North Central, and Eastern provinces). These afforded farmers better access to markets.

2. Output B: Restored Utilities

19. Most electricity infrastructure was destroyed during the conflict, or had since deteriorated. Jaffna depended on unreliable power from two local generators. The output aimed to reconnect Jaffna to the national grid. Two water supply schemes were to be constructed to meet the needs of resettled IDPs, who relied on inferior quality water from dug or tube wells.

20. B.1. Power supply. This sub-output envisaged restoring the 67.2 km Kilinochchi-to-Jaffna transmission line and the Chunnakam grid substation, to reconnect the Jaffna peninsula to the national grid to supply 62.8 megawatts (MW), the forecast 2015 load. CEB was the implementing agency. The work was to be completed by June 2012 and benefit 750,000 people.

21. The 132-kilovolt (kV) transmission line and the Chunnakam grid substation were restored and commissioned by September 2013. The Chunnakam grid substation has capacity to provide 63.0 MW of cheaper, reliable power from the national grid. Access to reliable power

5

was achieved for 160,000 houses (800,000 people) by October 2013, as well as for municipal, administrative, and industrial users. By October 2014, 120,000 of these houses (92%) were connected to reliable power supplies; the remaining 40,000 are in process of connection.

22. B.2. Water supply schemes. Two water supply schemes were to be restored by June 2012, benefiting 35,000 people with cofinancing by ADB and the International Federation of the Red Cross and Red Crescent Societies. The NWSDB was the implementing agency. The Point Pedro water supply scheme (Jaffna peninsula) was restored and commissioned by September 2014, incorporating an innovative system of abstracting water from an adjacent dune-sand aquifer. The Eachchalampattu water supply scheme (Eastern Province) was constructed by September 2014. The schemes provide access to safe drinking water for 33,000 people: Point Pedro for 20,000 people and Eachchalampattu for 13,000 people. Eachchalampattu has head works capacity to serve an additional 16,000 people in neighboring Serunuwara in the future. Both schemes were seriously delayed. Point Pedro needed initial de-mining and extra time to design and test the sand aquifer abstraction system. Eachchalampattu necessitated lengthy prior negotiations by NWSDB to obtain abstraction rights from the river source.

3. Output C: Improved Basic Social Services

23. This output aimed to restore essential basic social services and livelihood opportunities for the population by (i) restoring about 10 small- and medium-sized irrigation schemes, as agriculture is the main livelihood source, and (ii) rebuilding 10 administrative offices and providing related facilities. The output included reconstructing district vocational training centers, but this was dropped at the request of government in November 2010. A sub-output to rehabilitate small tank scheme infrastructure and rural access roads was introduced in 2013.

24. Small and medium irrigation schemes.17 Agriculture is the main economic activity for a majority of the population, but rains are limited and irregular. The cropping intensity is low because most irrigation, tanks, and canals are dilapidated, having received minimal investment since the early 1980s. The design included two sub-outputs: (i) irrigation schemes in Northern Province and (ii) irrigation schemes in NCP. The RRP mentioned a possible grant project for rehabilitating field irrigation canals and rural access roads with IDP participation, to complement CAREP. In 2013, the small tank infrastructure sub-output (C.3) was added under the loan at government’s request.

25. C.1. Northern Province small and medium irrigation schemes. The RRP envisaged completing scheme rehabilitation by December 2012. The NPID rehabilitated dilapidated or abandoned medium and large tanks in Mullaitivu, Vavuniya, Kilinochchi, and Jaffna districts (4 large tanks, 13 medium tanks, and 7 salt water exclusion schemes). The scope was later expanded to include rehabilitation of 49 small tanks (11 in Mullaitivu district and 38 in Vavuniya and Mannar districts), as well as improvements to 109 agricultural roads in Jaffna, Vavuniya, and Mannar districts, totaling 307 km. Rehabilitation was completed by April 2014. Farmer organizations participated in selection, design, and labor, and in construction of field turnouts18. A total of 6,839 farm families, all former IDPs, restarted cultivation on 12,759 hectares (ha). The NPID’s BCR assessment report shows that of 142 farmers in 24 focus group discussions, 89%

17 The RRP DMF referred to “10 small and medium-sized irrigation schemes” under subcomponents C.1 and C.2.

Practice ‘schemes’ comprise tanks (individual or cascades of small tanks, head works, and command areas). Large = >400-hectare (ha) command area; medium = 80–400 ha; small = <80 ha. Large schemes are the responsibility of the Ministry of Irrigation. However, NPID had exceptional permission to handle large schemes if the catchment lay within Northern Province.

18 The device, controlling water from field canal to the paddy field

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rated the irrigation works ‘satisfactory’ or ‘highly satisfactory.’ However, 46% rated the farm access road works ‘poor.’19

26. C.2. North Central Province small and medium irrigation schemes. The RRP planned for scheme rehabilitation20 completion by December 2012. NCPID rehabilitated 62 minor tank irrigation schemes in Anuradhpura district, covering 3,000 ha. Farmer organizations were involved in scheme selection, design, and implementation. Works were completed by September 2014. The achieved output included 3,236 farm families restarting cultivation on 1,740 ha. At least 40% of farmers were resettled IDPs. In the NCPID’s BCR assessment report of 39 schemes, the beneficiary responses were ‘good’ or ‘satisfactory’ for bund, sluice, spillway, and canal activities; only two beneficiaries reported ‘poor’ quality (for sluice and bund).

27. C.3. Small tank and cascade irrigation systems. This added sub-output was designed to rehabilitate, by July 2014, about 200 infrastructure works on small tank schemes (individual and cascade systems) and agricultural roads, within the conflict-affected areas of sub-outputs C.1 and C.2, and other areas of Eastern Province. The PCQAU was the implementing agency, aided by Department of Agrarian Development (DAD).

28. Rehabilitation covered 151 small tank systems, including bund and headwork repairs and de-silting, and 129 agricultural gravel roads (398 km) in six districts of Northern, North Central, and Eastern provinces. These were undertaken by June 2014. Farmer organizations were engaged as direct contractors for 49 tank and 27 small-scale road contracts and provided labor, equipment, and advice to small contractors working on other schemes. Tank de-silting provided communities with income during the 2013 maha season drought.21 The output resulted in 6,692 farm families, most of which were resettled IDPs, restarting cultivation on 4,157 ha. The agricultural roads gave farmers market access for crop sales. A sample survey of farmers by DAD showed that 82%–97% were satisfied with the improved cropping potential, water table levels, and livestock water supply.

29. C.4. Administrative offices. Most of the district and divisional administration buildings in Northern Province had been damaged or destroyed, along with most of their office furniture, equipment, machinery, and vehicles. CAREP aimed to reconstruct and equip 10 administrative offices by December 2012. The Ministry of Public Administration and Home Affairs (MPAHA) was the implementing agency. A total of 24 administrative offices and related buildings were constructed or reconstructed and equipped—including divisional and district secretariats, bungalows, quarters, and stores—in Jaffna (3), Kilinochchi (6), Mullaitivu (4), Mannar (8), and Vavuniya (3) districts. Buildings were constructed by March 2014 and fully equipped by September 2014.

4. Output D: Improved Legal Governance

30. The design proposed rehabilitating courthouses and related facilities in up to nine strategic locations in Northern Province.22 The prolonged conflict had prevented the civil and criminal judicial system from functioning effectively. With the end of the conflict, rehabilitation and reconstruction of the judicial infrastructure was urgently needed to restore the perceived personal and communal security of the war-affected communities and IDPs. Judicial officers had been appointed, but most court proceedings took place under extremely difficult conditions in partially damaged buildings or rented houses. Project support for physical infrastructure

19 These farm roads were rehabilitated as gravel roads. However, villages had anticipated paved roads, similar to the

national and provincial roads. 20 In practice ‘schemes’ comprise tanks, individual or cascades of small tanks, head works and command areas. 21 The maha cropping season, which failed in 2013, was during the north east monsoon. 22 Locations include Chavakachcheri, Kayts, Kilinochchi, Mallakam, Mankulam, Mannar, Mullaitivu, Point Pedro, and Velani.

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reconstruction was to be provided in coordination with the Equal Access to Justice23 capacity-building program of the United Nations Development Programme (UNDP). A letter of understanding was signed between ADB and UNDP in March 2010 so construction and capacity-building activities could run in parallel, to ensure comprehensive justice sector development.24 The RRP envisaged benefits to up to 1 million people.

31. D.1. Judicial centers. In 2012, the implementing agency, the Ministry of Justice (MOJ), requested reducing the target to three judicial centers in Kayts, Mallakam, and Chavakachcheri, after having identified other fund sources. This was agreed at the midterm review.25 The three judicial centers were to be completed, equipped, and operational by March 2013. Construction was completed by December 2013. Furnishing and equipment was installed in Kayts and Chavakachcheri by March 2014 and in Mallakam by July 2014. Additional furniture, machinery, and computing equipment were provided to the six other court complexes in Northern Province to improve their performance. Contractors were delayed by scarcity of suitable local labor and tardiness of local contractors for procurement, who found the ADB procedures cumbersome, delaying furniture supply for the Mallakam court complex. All procurement was completed by July 2014. The three courts are benefiting the 361,000 people in the three jurisdictions (a proportionate reduction from the 1 million envisaged for nine centers).

32. ‘Equal Access to Justice’, in partnership with the Ministry of Languages and Social Integration26 and other agencies, provided capacity-building support to 36 courts in Northern and Eastern provinces, including the nine originally selected for CAREP.

C. Project Costs

33. At appraisal in 2009, the total estimated project cost was $168.24 million equivalent. The estimated ADB-financed cost was $150 million, and the government-financed output was $18.24 million. During implementation the International Federation of the Red Cross and Red Crescent Societies joined as a cofinancer, providing $1.5 million. The detailed project costs, at appraisal and completion, are in Table 2. More details are in Appendix 2, including costs by output, category, and finance source.

Table 2: Project Costs at Appraisal and at Completion

Output Appraisal Estimate Completion

Output A National 32.30 34.61 NP–Provincial, Municipal & Urban 31.50 28.84 NCP–Pradeshiya 1.70 1.46 Output B Power 26.70 14.07 Water 6.20 11.75 Output C NP Irrigation 16.07 27.22 NCP Irrigation 2.34 6.65 Small Irrigation Tanks 10.86

23 The official web site is at

http://www.lk.undp.org/content/srilanka/en/home/operations/projects/democratic_governance/equal-access-to-justice-phase-ii-.html

24 ADB and UNDP. 2010. Letter of Understanding: Providing legal assistance and institutional support for the judicial sector in Northern Province of Sri Lanka, 15 March 2010. Colombo.

25 ADB. 2012. Conflict-Affected Region Emergency Project. Aide memoire of the midterm review mission, July–August 2012. Sri Lanka Regional Mission, Colombo.

26 Initially handled by Ministry of Constitutional Affairs and National Litigation.



8

Output Appraisal Estimate Completion

Vocational Training

7.57

0.00

Administrative Infrastructure 8.39 9.43 Output D 7.79 5.54 Project Management 1.12 0.46 Contingencies 22.49 0.00 Interest Charges 4.08 1.37

Total 168.24 152.26

NCP = North Central Province, NP = Northern Province. Source: Borrowers Completion Reports

34. Additional works explain the cost increase for irrigation outputs, and paragraph 27 and 28 provide the reasons behind the irrigation sub-output expansion.

D. Disbursements

35. Disbursements were slow initially because of procurement delays. However, they accelerated and improved significantly after 2011, by which time most contracts had been awarded. Continuous high financial progress was indicated in provincial roads (A.2), Northern Province irrigation (C.1), and legal infrastructure (D.1) sub-outputs, compared to other sub-outputs. 50% of disbursements were made during 2013 and 2014 in total. (Appendix 6). The original project cost was $168.24 million, but the actual cost was $152.05 million. The total disbursement from the loan is $138.17 million, 92.11%.

36. There were four imprest accounts, one for each main output, and 10 sub-accounts for each implementing agency.27 However, the output B imprest account included only the water sub-output (B.2) because CEB, the implementing agency for the power sub-output (B.1), used only direct payment procedures and had no imprest account. To minimize the number of imprest accounts, PCQAU’s advance was included under output B, which comprised only the water sub-output, whereas other imprest advances covered several implementing agencies. Due to the many claims under output C, the imprest advance was increased from $0.9 to $6.0 million in April 2014. This enabled the executing agency and implementing agencies to make payments to contractors within a short timeframe, avoiding cash flow issues of the small contractors. MED was responsible for monitoring all imprest accounts, monthly reconciliations, and subaccounts at the project implementation units (PIUs), and for preparing withdrawal applications for imprest advances and replenishment and liquidation of the imprest accounts at Central Bank.

E. Project Schedule

37. Appendix 3 shows the project timeline, with actual and planned schedules compared. With the exception of the power sub-output (B.1), all outputs overran the original completion date of September 2013. The irrigation (C.1, C.2, and C.3), provincial and local authority roads (A.2 and A.3), and legal infrastructure (D.1) sub-outputs were completed within or near the initial six-month loan extension, from 30 September 2013 to 31 March 2014. National roads (A.1), water supplies (B.2) and administrative infrastructure (C.4) sub-outputs required the second six-month loan extension, from 31 March 2014 to 30 September 2014. This was despite most implementing agencies using retroactive financing under the loan for initial pre-project planning.

38. MED was intent on completing the project on schedule, even by reducing scope. However, under pressure from implementing agencies behind schedule, MED requested two six-month extensions.

27 Formerly known as ‘Second generation imprest accounts.’

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39. The post-conflict context accounted for some delays, resulting from the initially traumatized communities, weak provincial institutions, a dearth of competent local contractors, local shortages of labor and materials, and poor access. However, the lack of dedicated PIU staff within implementing agencies and late appointment or inadequacy of consultants also slowed initial progress. The principal cause of delay was contractors, especially international contractors, and the many under-resourced small local entities that created contractual and payment problems. As mine clearance was completed before the start of most projects, its impact on delays was insignificant.28

F. Implementation Arrangements

40. Appendix 7 shows the implementation organization as planned and as implemented. Three changes were made: (i) MED was appointed as the executing agency shortly after commencement, (ii) the Ministry of Vocational Training and Technical Education ceased to be an implementing agency when the vocational training center output was deleted, and (iii) the PCQAU became the implementing agency for the added small tank irrigation sub-output (C.3). Six sub-outputs were implemented by central government agencies, but the provincial councils, through their respective irrigation departments, were implementing agencies for irrigation sub-outputs C.1 and C.2. NPRDD was the implementing agency for provincial and local council road sub-outputs and NCPRDA implemented Pradeshiya Sabha roads in NCP.

41. As proposed at design, oversight was provided by a national steering committee, chaired by MED and including representatives of the Ministry of Finance and Planning, implementing agencies, and chief secretaries of Northern Province and NCP. The committee was expected to liaise with the Presidential Task Force. In practice, the national steering committee met quarterly. The preparation of consolidated project-wide reports was irregular. Provincial project coordination committees in Northern Province and NCP, headed by the respective chief secretary and provincial line agency representatives, reviewed and approved proposed projects. The executing agency, through PCQAU, provided overall coordination, including (i) fund reallocations; (ii) standardization of bidding, procurement, and accounting; (iii) quality assurance and safeguard compliance; and (iv) progress monitoring. PCQAU was strengthened with additional staff as envisaged at design, but had responsibilities for other projects and suffered from four project coordinator staff changes. Establishing a sub-office in Anuradhapura better enabled PCQAU to provide coordination and accounting services.

42. The PIUs in each implementing agency managed implementation. As proposed at design, most used existing PIUs established for other ongoing ADB-funded projects. Although some PIUs were strengthened, most staff were not dedicated to CAREP. For MPAHA and NPID, new PIUs were established, but the proposed support from PCQAU was minimal.

G. Conditions and Covenants

43. Conditions and covenant compliance is shown in Appendix 8. All covenants were relevant, focusing on good governance and implementation practices. With the exception of two, covenants were complied with. The covenant for quarterly report submission was partially complied with, as some implementing agencies were not able to submit reports on time. The covenant for audited financial report submission was not complied, as the executing agency submitted the 2014 report only in 2017. The executing agency informed the Sri Lanka Resident

28 An assumption under the outcome in the DMF was “de-mining will be completed in project areas.” By May 2009,

50% of mines were cleared, with the remainder cleared by September 2010, apart from densely forested areas. The late removal of mines caused slight delays on some subcomponents.

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Mission that the delay was because of the executing agency change after the January 2015 presidential election.

H. Consultant Recruitment and Procurement

44. The RRP provided for consulting services (Appendix 9) comprising 1,268 person-months (45 international and 1,210 national) of internationally recruited consultants, for construction supervision of road sub-outputs A.1 and A.2. Provision was made for individual consultants, depending on implementing agencies’ needs, to be selected following government guidelines.

45. In August 2010, MED issued instructions to all implementing agencies that the Central Engineering Consultancy Bureau (CECB) 29 would provide the design and construction supervision consultants, and that government funds would be used to pay for CECB services. However, the Road Development Authority (RDA) (implementing agency for national roads) obtained dispensation to recruit an international consulting firm for sub-output A.1. The RDA started recruiting in May 2010, using quality- and cost-based selection, following ADB guidelines on the Use of Consultants 2013, as amended from time to time. The selected consulting firm began work in September 2011. The NPRDD, as a provincial agency, had to abandon its consultant recruiting process and adopt CECB consultants. The other implementing agencies either engaged the CECB, Northern Province Provincial Building Department (NPBD)30 or used in-house staff, but several recruited individual consultants for specific tasks.

I. Performance of Consultants, Contractors, and Suppliers

46. The performance of consultants was satisfactory. Their performance was evaluated in BCRs and is detailed in Appendix 9. RDA reported satisfactory performance by their internationally recruited consultants. For implementing agencies that used CECB consultants, performance was mixed: (i) NPRDD and NPID were unsatisfied with some CECB-fielded consultants, as they lacked competence; (ii) the NCPID rated its CECB consultants as partially satisfactory, as they were unable to give clear strategic advice on how to resolve issues with contractors; and (iii) the MOJ considered its CECB consultants satisfactory. The NPBD failed to develop an effective interaction with contractors. This was resolved by replacing the NPBD with an in-house MPAHA officer as contract engineer, who expedited completion. Some implementing agencies, such as NCPRDA and NWSDB, engaged individual consultants for specific tasks, with whom they were satisfied.

47. The implementing agencies engaged many contractors for construction work. Their performance is reviewed in Appendix 10. Out of four international competitive bidding contracts for the national roads and power sub-outputs, three contractors performed satisfactorily, however, the international contractor for the B269 road performed unsatisfactorily. Some contractors engaged by NWSDB for the Point Pedro project were rated unsatisfactory because of late completion of construction. As encouraged by the RRP, implementing agencies engaged many local contractors. However, in the aftermath of the conflict, most of these entities were under-resourced in staff, equipment, and finances. Many were committed to other works and had to cope with the influx of additional development projects. Some contract packages had to be split to accommodate smaller contractors. Farmer organizations were also engaged for some small irrigation and farm access road works. Overall, local contractors performed satisfactorily, although most were late in completing contracts, thereby contributing to overall implementation delays. Common causes of delays were the contractors’ poor financial skills and the heavy

29 CECB is a state-owned enterprise. http://www.cecb.lk 30 The NPBD is a state-owned enterprise, and, similar to CECB, the government financed engaging NPBD as a

consultant.

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accounting load placed on implementing agencies, which postponed MED and ADB approvals and, consequently, slowed payments to contractors. However, some causes of delays (changes in designs by implementing agencies and a scarcity of material and local labor) were outside the contractors’ control.

J. Performance of the Borrower and the Executing Agency

48. The borrower performed satisfactorily. All agencies involved had worked previously with ADB, some over many years. They were aware of ADB’s procedures and had established good relationships. The borrower met its responsibilities, but some implementing agencies were unable to abide by time-bound programs. MED attempted to ensure completion on schedule, but the programs of some implementing agencies were delayed. The design and monitoring framework (DMF) (Appendix 1) had anticipated the risk of limited institutional capacity of project-area organizations, and, as executing agency, MED performed satisfactorily. As a short-term emergency project, no institutional strengthening outputs were included, but most implementing agencies had benefited from capacity-building activities in previous and ongoing ADB projects.

K. Performance of the Asian Development Bank

49. The ADB’s performance is satisfactory. ADB facilitated, coordinated, and monitored implementation, closely liaising with the executing and implementing agencies in all activities, notably for recruiting consultants, approving contractors, checking invoicing, and disbursing funds. Implementing agencies appreciated the ADB team’s knowledge of technical issues (which facilitated decision-making and monitoring) and their understanding of financial aspects. The executing agency welcomed ADB’s timely decision making, in consultation with relevant agencies, on budget reallocations, contingencies’ release, and extension approvals. ADB’s procedures for bidding and engaging contractors and suppliers were found to be too complex, especially for the many small contractors involved. ADB adopted direct payments for values of more than $100,000, and used imprest accounts for other payments.

50. ADB engaged a staff consultant for the initial three years to visit sub-output activities and report monthly, as well as to give administrative assistance to PCQAU. The staff consultant facilitated project-wide monitoring on ADB’s behalf. ADB’s respective technical staff efficiently monitored each sub-output. ADB’s financial monitoring systems performed well in handling the numerous payments to small contractors, and in coping with heavy processing load. In April 2014, ADB delegated responsibility to the executing agency for processing such payments through an imprest advance. This flexible process helped speed up payments.

51. Training courses conducted by ADB for implementing agencies on procurement and disbursements were timely and beneficial. A workshop on preparing BCRs improved these documents.

III. EVALUATION OF PERFORMANCE

A. Relevance

52. The project was relevant. It was designed to restore facilities and services to help reduce high, post-conflict poverty levels. It conformed to the government’s medium-term policy targets for the north, Wadakkin Wasantham, (foot note 4) which included restoration of roads, electricity, water supplies, and irrigation, as well as strengthening civil administration. The project aligned with ADB’s country partnership strategy (CPS), 2009–2011.It remained relevant at completion

12

and consistent with ADB’s CPS, 2012–2016, 31 which promotes inclusive and sustainable economic growth and infrastructure development to improve connectivity and service delivery, focusing on energy, transport, water supply and sanitation, and urban development.

53. Some minor scope changes were needed to improve performance, but the project structure remained largely as designed. Government agencies, acting as implementing agencies, directly implemented sub-outputs. Early in the project, the government requested the vocational training center sub-output be removed, and, at the midterm review, reduced the legal complexes to three. With changed government priorities, reallocation of fund savings enabled a threefold expansion of the existing irrigation rehabilitation programs, including additional small schemes and rural access roads. 32 This expansion in the irrigation sub-output was highly relevant to IDPs returning during a severe drought.

54. The approach adopted for achieving outcomes was consistent with ADB's policy on emergency assistance that prescribes (i) a sharp focus on selected sectors, (ii) expeditious project preparation, (iii) design criteria that ensure sustainability, (iv) technical assistance for preventive measures, and (v) independent project monitoring for strengthened governance. The policy regards emergency relief as a continuum involving short-term transitional emergency assistance and medium- to long-term rehabilitation and reconstruction. The project followed the approach, addressing short-term emergency assistance needs and long-term rehabilitation requirements.

55. Considering the post-conflict situation, the project was designed to be flexible. However, the deletion of vocational training sub-output, scope reduction in output D, and threefold expansion in the irrigation sub-output prevents the project from being rated as highly relevant.

B. Effectiveness in Achieving Outcome

56. The project was effective in achieving its outcomes and outputs (Appendix 1). The outcome for the improved road network envisaged a reduction in travel time by 30% and vehicle operating cost by 20% from 2009 levels. By the project’s end, travel time costs per vehicle km reduced by 35%–44% (national roads: 44%; provincial roads: 29%; municipal and urban roads: 26%; Pradeshiya Sabha roads: 37%; rural access roads 33%). Vehicle operating costs per vehicle km reduced for project road network by about 25% (national: 28%; provincial: 24%; municipal and urban: 24%; Pradeshiya Sabha: 30%; rural access: 33%). Moreover, the rehabilitated 705 km of rural access roads are significantly improving the livelihoods of formerly isolated farming communities.

57. The improved utilities outcome aimed to provide access to power supply for 750,000 people in Northern Province and to safe drinking water for 35,000 people in Northern and Eastern provinces. The power outcome was met, as about 800,000 people now have access to a reliable supply. For safe drinking water, 33,000 people now benefit from treatment plants at Point Pedro (20,000 people) and Eachchalampattu (13,000). An additional 16,000 people in communities adjoining the Eachchalampattu plant should later benefit from the new headworks.

58. The DMF envisaged 6,000 families restarting cultivation on 6,500 ha of irrigated land. The greatly expanded irrigation sub-outputs exceeded the original outcome targets threefold. A total of 16,767 farm families, predominantly former IDPs, have restarted irrigated cultivation on 19,916 ha in Northern Province, and parts of Eastern Province and NCP.

59. For improved basic administrative and legal infrastructure, the outcome was to provide legal service access for 1 million people in Northern Province. About 361,000 people in the

31 ADB. 2011. Country Partnership Strategy: Sri Lanka, 2012–2016. Manila. 32 Additional small scheme infrastructure support had been envisaged in the RRP at design but under grant funding.

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jurisdictions of the three reconstructed legal complexes in the Jaffna peninsula and islands now have access to efficient legal services and facilities. 33 The level of legal governance has improved significantly and land ownership issues and property rights are being resolved for returnees and IDPs. New or re-constructed divisional and district secretariat facilities have given access to improved and more efficient administrative infrastructure for about 1,060,000 people.

C. Efficiency in Achieving Outcome and Outputs

60. The project is rated efficient. It was processed as an emergency project; no economic analysis to justify investments was done at appraisal. It was stipulated that all subprojects had to be justified by criteria identified in the RRP, and the economic analysis was not a criteria. However, CEB calculated an economic internal rate of return (EIRR) for the power sub-output (B.1), estimated at 24.4%, at the time of appraisal. The project completion report mission calculated the economic analysis of the roads output (A) and power sub-output (B.1) and found both efficient, with high EIRRs of 20.4% for roads and 28.6% for power (Appendix 11). The overall targets to rehabilitate the conflict-affected area infrastructure were achieved. Some sub-outputs were completed well under budget (Appendix 2); others were dropped (vocational training) or curtailed (legal complexes), with savings contributed to irrigation. Although the irrigation budget tripled, it was matched by a threefold increase in achievements. Overall project costs were within budget, after some use of contingency and fund reallocations at the government’s request.

61. The implementing agencies’ processes of intervention identification, design, and implementation followed established government procedures. Each implementing agency assigned at least a few staff to CAREP activities. Devolving responsibilities to the implementing agencies enabled a prompt project start, and works were generally executed efficiently. The role of the executing agency, and PCQAU, was limited to overall coordination, monitoring, and fund reallocation, which it performed with varied degrees of efficiency. Where appropriate, subproject selection was efficiently handled in consultation with provincial project coordination committees and district coordinating committees. For irrigation activities, farmer organizations fully participated. This also contributed to a create sense of ownership for implementing agencies. The government directed some implementing agencies to use the state-owned enterprise CECB as consultants, instead of the competitive bidding process envisaged at design.

D. Preliminary Assessment of Sustainability

62. The sustainability rating is likely sustainable. All sub-outputs were implemented by government agencies, within their own programs, and were handed over on completion of construction to the divisions responsible for management and maintenance. This signified ownership and portends well for sustainability. These government agencies have institutional systems for operation and maintenance. Government divisions concerned with the project have adequate maintenance budgets. For irrigation sub-outputs, the Department of Agrarian Development (DAD) will continue to maintain small tank schemes with the farmer organizations. The provincial irrigation departments will maintain the larger schemes, with farmer organization participation. All buildings and the national, urban, municipal, and Pradeshiya Sabha roads were constructed to an appropriately high standard, with low maintenance requirements.

33 The up to nine courts envisaged in the RRP for reconstruction were reduced to three priority court complexes.

Furnishing and equipment was supplied to all nine.

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E. Impact

63. The project had a satisfactory impact, contributing to a reduced poverty incidence in conflict-affected areas. The DMF impact was a reduction of poverty in Northern Province from 37% in 2010 to 15% by 2020 (Appendix 1). Fully restoring livelihoods and incomes, and reducing poverty—especially among IDPs—will take time. The investments made under CAREP have laid the foundation for the population’s improved living conditions and well being through enhanced connectivity, basic utility access, restored irrigation, and improved administrative offices and legal facilities. By the end of 2013, the mean poverty level in the Northern Province’s five districts had declined to an estimated 14.7%, meeting the impact target. However, poverty levels remained high in Mannar (20.1%) and Mullaitivu (28.8%) districts.34 Contributions by ongoing donor-funded projects and government programs are likely to reduce this regional imbalance by 2020 (Appendix 4).

64. Social impacts were generally positive. Initially the returning IDP communities were traumatized, but restored farmer organizations increased social cohesion. Women and men benefitted equally from improved services. Project interventions did not lead to any physical or economic displacement, either permanent or temporary. Construction was on state lands, using existing rights of way. There was no necessity to introduce safeguard instruments to minimize, mitigate, or compensate for adverse impacts arising from population displacements (Appendix 5).

65. As the emergency project was prepared quickly, few environmental safeguards were included in the design. Initial environmental examinations were conducted for the roads outputs, and the recommended standards were applied. Restoration of irrigation and saltwater exclusion schemes had positive environmental impacts. The rehabilitation of road networks reduced air-polluting dust and water logging during the rainy season (Appendix 5).

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

66. CAREP was successful. The project was relevant to the development goals and strategies at appraisal and at completion. CAREP was designed as an emergency project to complement the government’s reconstruction program for conflict-affected areas. Sub-outputs were to be implemented directly by government agencies as part of their own programs. In the immediate post conflict period, the government’s emergency relief efforts were evolving, requiring donor agency assistance programs to be flexible. The DMF was well prepared and accurately anticipated the risks that could, and often did, lead to implementation delays (Appendix 1). The project was also effective and efficient. The planned outcome and outputs were largely achieved within cost and with minimal delays. Major project components remain economically viable at completion. The project is rated likely sustainable as the government agencies have sufficient systems and funding to operate and maintain the outputs delivered under the project.

34 Government of Sri Lanka, Department of Census and Statistics. 2014. Household Income and Expenditure Survey

2012/13: Preliminary Report. Colombo.

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B. Lessons

67. Several lessons were learned during implementation:

(i) Decentralization of some sub-outputs to provincial agencies improved local community and institutional ownership.

(ii) Engagement of many local contractors successfully developed local capacities; however, their limited management, physical, and financial resources led to slower progress than expected .

(iii) In contract packaging, geographical locations of irrigation reservoirs should have been considered. Some far-flung irrigations reservoirs were grouped in a single contract, which created difficulties in implementation.

(iv) ADB’s procurement and disbursement procedures were too complex for small entities .

(v) The workshop conducted by the Sri Lanka Resident Mission for implementing agency officers on how to prepare completion reports resulted in higher-quality BCR documents .

C. Recommendations

1. Project Related

68. Future monitoring. Project activities were devolved to individual implementing agencies, instilling a sense of ownership. The implementing agencies will undertake monitoring and a review will be carry out during the ADB project performance evaluation mission.

69. Project performance evaluation report. While there is no pressing need for a project performance evaluation report, the report should be undertaken before mid-2019.

2. General

70. In an emergency project appraisal, ADB should:

(i) Retain flexibility in design, and (ii) Keep ownership for outputs within implementing agencies.

16 Appendix 1

DESIGN AND MONITORING FRAMEWORK

1. The design and monitoring framework (DMF) contained in the report and recommendation of the President (RRP) was prepared following the Asian Development Bank (ADB) guidelines.1 Outcomes are clearly linked to outputs by individual implementing agencies.

2. The RRP DMF has been modified slightly for use in the project completion report. The RRP ‘outputs’ have been separated to show the main sub-output elements contributing to the ‘output.’ The envisaged physical achievements and expected completion dates are retained under ‘performance targets.’ This facilitated direct comparison with ‘actual achievements.’ Other variations are as follows.

1. Output A: Connectivity

3. ‘National’, ‘Provincial’ and ‘local authority’ roads have been separated as sub-outputs for clarity.

2. Output C: Basic Infrastructure

4. The RRP DMF referred to ‘10 small- and medium-sized irrigation schemes’ under sub-output C.1 and C.2. In practice, ‘schemes’ are tanks, headworks, and command areas of individual tanks, or cascades of small tanks, and were recorded as such by implementing agencies.

5. ADB approved the expansion of sub-output C.1 (Northern Province irrigation) in February 2012. 2 This included rural roads, small-scale irrigation and rural electrification schemes in Welioya villages, a cultural hall in Mannar, and other minor changes. ADB revised the DMF to reflect the expansion; however, subsequently the government dropped the changes because of revised policies. Therefore, they are not shown in the project completion report DMF.

6. In 2013, a new sub-output—rehabilitation of small irrigation infrastructure works associated with small tank and cascade systems—was included and added to the DMF as C.3. This covered small tanks and cascades in areas of sub-outputs C.1 (Northern Province) and C.2. (North Central Province), and Eastern Province. ADB retroactively approved the addition in January 2014.3

7. The vocational training center (C.5) was removed from the project at the request of government in November 2010.

3. Output D: Legal Governance

8. The RRP defines Output D as reconstruction of ‘Legal Infrastructure,’ but the DMF, more correctly, refers to ‘Improved Legal Governance,’ which is expected to result from the reestablished infrastructure.

9. Output D targets were reduced from ‘up to nine’ (as in the RRP) to three centers for completion by March 2013, as agreed at the midterm review.

1 ADB. 2007. Guidelines for Preparing a Design and Monitoring Framework. Manila. 2 ADB. 2012. SRI: Conflict-Affected Region Emergency Project – Loan 2626. memoire request for minor change to

the project and reallocation of loan proceeds, 7 February 2012. Sri Lanka Resident Mission, Colombo. 3 ADB. 2014. Conflict-Affected Region Emergency Project. memoire request for minor change and reallocation to the

project, 31 January 2014. Sri Lanka Resident Mission, Colombo.

Appendix 1 17

Table A1: Design and Monitoring Framework

Design Summary Performance Targets Actual Achievements (as of December 2016) Assumptions & Risks

Impact

Incidence of poverty in conflict-affected areas reduced

Incidence of poverty in Northern Province reduced from 37% in 2010 to 15% by 2020

Fully restoring livelihoods and incomes, and reducing poverty—especially among IDPs—will take time. By the end of 2013, the mean poverty level in the 5 NP districts had declined to an estimated 14.7% but Mannar (20.1%) and Mullaitivu (28.8%) remained high (HIES data). With current development efforts, achieving a reduction to below 15% in each district by 2020 appears feasible.

Assumptions

• Economic activities are sustained and civil administration strengthened for better services.

• Livelihood activities will be implemented by the government and other development partners.

The investments made under the CAREP laid a foundation for improved living conditions and well being of the population, supplemented by contributions from other donor-funded projects, such as ADB (NECORD, CAARP, TAARP, NECCDEP), World Bank (ENREP), India (IDP housing, railway), and the government’s Wadakkin Wasantham 3-year NP development strategy.

Outcome

Livelihood, economic infrastructure, and administrative and legal services in conflict-affected areas restored and improved

By project completion: Assumptions

• De-mining is completed in project areas.

• IDPs are resettled in the project area following government plans.

• UNDP’s ‘Access2 Justice’ program is implemented.

Risks

• Institutional capacity of national and provincial government agencies, nongovernment organizations, and community-based

Travel time reduced by 30% and vehicle operating cost reduced by 20% in road network from 2009 levels in conflict-affected areas

Travel time costs per vehicle km reduced by 35%–44% (national: 44%, provincial: 29%, municipal and urban: 26%, Pradeshiya Sabha: 37%, rural access: 35%). Vehicle operating cost per vehicle km reduced over the total project road network by about 25% (national: 28%, provincial: 24%, municipal and urban: 24%, Pradeshiya Sabha: 30%, rural access: 33%).

Access to power supply improved for 750,000 people in NP

About 800,000 people have access to reliable national grid power supply in NP.

35,000 people have access to safe drinking water in Northern and Eastern provinces [Note 1]

33,000 people benefit from safe drinking water from treatment plants at Point Pedro in NP (20,000 people) and at Eachchalampattu in EP (13,000). 16,000 more people in a village adjoining the Eachchalampattu plant should later benefit from the new headworks.

6,000 families restarted cultivation in 6,500 hectares of irrigated land in conflict- affected areas

16,767 farm families, predominantly former IDPs, restarted irrigated cultivation on 19,916 ha in conflict-affected areas of NP, NCP, and EP.

18 Appendix 1

1 million people have access to basic administrative and legal infrastructure in NP

1,060,000 people in Jaffna, Kilinochchi, Mullaitivu, Mannar, and Vavuniya districts have access to improved and more efficient administrative infrastructure, through new or reconstructed divisional and district secretariats, and government staff quarters.

About 361,000 people in Jaffna peninsula and islands have access to efficient legal services and facilities through new, fully equipped court complexes. [Note 7]

organizations in project area is not adequate.

• Disparities among benefits of different development projects cause tension among beneficiaries.

1,200 people per year in NP trained in essential employment skills

Not applicable: the vocational training output was dropped from the CARE project in November 2010. [Note 4]

Outputs

A. Reestablished Connectivity

National roads in Northern Province rehabilitated

65 km national roads rehabilitated by December 2012

B357 Paranthan to Pooneryn (25.7 km) was rehabilitated by September 2013. B269 Mankulam to Vellankulam (40.0 km) was rehabilitated by September 2014. Total of 65.7 km.

Assumptions

• Civil works and supply contracts are awarded without delay.

• Qualified civil works and supply contractors are available.

Risks

• Delays occur in identification and design of projects by line agencies

• Shortages exist of construction material

• Cost of material and labor escalates due to market forces.

Provincial roads in Northern Province rehabilitated

100 km of provincial council roads rehabilitated by December 2012

25 contract packages for rehabilitation of ‘C’ and ‘D’ provincial roads (including 2 causeways) in Kilinochchi, Mannar, and Vavuniya were completed by September 2013. 6 more packages were completed by July 2014. Total of 72.1 km.

Urban and municipal council roads in NP and Pradeshiya Sabha [Note 2] roads in adjoining villages in NCP rehabilitated and improved

100 km of municipal, urban, and Pradeshiya Sabha roads rehabilitated and improved by December 2012

90.5 km of municipal (42 km) and urban (48.5 km) roads in Jaffna, Mannar, and Vavuniya districts were rehabilitated and improved by July 2014. 17.9 km of Pradeshiya Sabha roads were rehabilitated and improved by October 2012. Total of 108.4 km.

In addition, 705 km of agricultural roads were rehabilitated under the irrigation outputs: 307 km under C.1 (Jaffna, Vavuniya, Mannar) and 398 km under C3 (in 6 districts of NP, NCP, and EP) by June 2014.

B. Restored Utilities

B.1 Power sub-output: Transmission lines and substation restored to enable CEB to supply 62.8 MW of forecast load by FY2015

67.2 km of power transmission line restored by June 2012

A 132 kV transmission line (67.2 km long) connecting the national grid at Kilinochchi with the Chunnakam grid substation was restored and commission by September 2013.

Assumptions



One grid substation restored by June 2012

Chunnakam grid substation, Jaffna peninsula, was completed by August 2013, with capacity to provide 63.0 MW of power.

750,000 people benefited by June 2012

Access to reliable power was achieved for 160,000 houses (800,000 people) by October 2013, as well as for municipal, administrative, and industrial users. 120,000 houses (92%) are connected to reliable power supplies; the remaining

Appendix 1 19

40,000 houses are in process of connection. Risks

• Delay occurs in identification and design of projects by line agencies.

• Shortage exists of construction material.


B.2 Water supply sub-output: Water supply schemes restored

Two water supply schemes restored by June 2012

Point Pedro water supply scheme (Jaffna peninsula) was restored and commissioned by September 2014, incorporating an innovative system of abstracting water from an adjacent dune-sand aquifer.

Eachchalampattu water supply scheme (EP) was constructed by October 2014, and commissioned by October 2014.

35,000 people benefited by June 2012

The two schemes provide access to safe drinking water for 33,000 people (Point Pedro: 20,000, Eachchalampattu: 13,000). Eachchalampattu has headworks capacity to serve 16,000 more people in neighboring Serunuwara village [Note 3].

C. Improved Basic Social Services [Note 4]

C.1 Small and medium irrigation schemes in NP rehabilitated

10 small- and medium-sized irrigation schemes rehabilitated by December 2012 [Note 5]

NPID rehabilitated dilapidated tank schemes in Mullaitivu, Vavuniya, Kilinochchi, and Jaffna districts (4 large tanks, 13 medium tanks, and 7 SWE schemes). 11 tank irrigation systems were rehabilitated in Welioya (Mullaitivu), and 38 small tank irrigation systems (Vavuniya, Mannar) and 109 agricultural roads, totaling 307 km (Jaffna, Vavuniya, Mannar), were rehabilitated. Rehabilitation was completed by April 2014. 6,839 farm families, most former IDPs, restarted cultivation on 12,759 ha. The NPID’s assessment report (BCR) shows that of 142 farmers in 24 focus group discussions, 89% rated the irrigation works ‘satisfactory’ or ‘highly satisfactory,’ but 46% rated the farm road works ‘poor’ [Note 6].

Assumptions



Risks

• Delay occurs in identification and design of projects by line agencies.

• Shortage exists of construction material.


C.2 Small and medium irrigation schemes in NCP rehabilitated

NCPID rehabilitated 62 minor tank irrigation schemes in Anuradhpura district, covering 3,000 ha, by September 2014. 3,236 farm families (with 40% of farmers former IDPs) restarted cultivation on 1,740 ha.

In NCPID’s assessment report on 39 schemes (BCR), beneficiary responses were ‘good’ or ‘satisfactory’ for bund, sluice, spillway, and canal activities; only 2 beneficiaries reported ‘poor’ quality (for sluice and bund).

C.3 Small tank and cascade irrigation systems rehabilitated within sub-output C.1 and C.2 and other schemes

About 200 infrastructure works and agricultural roads rehabilitated by July 2014

151 small tank systems (including bund and headwork repairs and de-silting) and 129 agricultural roads (400 km) were rehabiliated in 6 districts of NP, NCP, and EP by June 2014. Most tanks rehabilitated in Anuradhapura were cascade systems. FOs were engaged as direct contractors for 49 tank and 27 road contracts. 6,692 farm families (most former IDPs) restarted cultivation on 4,157 ha.

The results of a Department of Agrarian Development sample survey of farmers showed 82%–97% were satisfied with the improved cropping potential, water table levels, and livestock water supply.

C.4 Administrative offices reconstructed and equipped

10 administrative offices reconstructed and equipped by December 2012

Administrative offices and related facilities (including divisional and district secretariats, bungalows, quarters, and stores) constructed or reconstructed in Jaffna (3), Kilinochchi (6), Mullaitivu (4), Mannar (8), and Vavuniya (3) districts. All construction was completed by March 2014; facilities were fully equipped by October 2014.

20 Appendix 1

Activities with Milestones [Note 8] Inputs by Source

1. All road works contracts awarded by the Roads Development Authority, the Provincial Road Development Department, and the Provincial Road Development Authority by March 2011.

ADB Loan: $150 million

Item $ million

2. Project implementation consultant for provincial municipal and urban and Pradeshiya Sabha roads subproject engaged by November 2010.

Civil works 109.77

3. The Kilinochchi–Chunnakam transmission line awarded by CEB by Q3 2010. Equipment 7.10

4. Two contracts for water supply awarded by the National Water Supply and Drainage Board by the end of Q3 2010.

Consulting services 5.67

5. Contracts awarded for all administrative buildings, 30% of irrigation schemes, and four judicial facilities by the end of 2010.

Incremental 3.40

6. Consultant recruited by the end of Q2 2010 Contingencies 19.98

7. The PCQAU established by loan effectiveness by executing agency by . Interest during construction 4.08

C.5 District vocational training centers reconstructed and operational

Three district vocational training centers reconstructed and operational by December 2012

This sub-output was dropped from the project.

D. Improved Legal Governance [Note 7]

D.1 Judicial centers reconstructed, provided facilities, and made operational

Up to nine judicial centers reconstructed, provided facilities, and made operational by December 2012; reduced to three centers by March 2013

Court complexes were constructed at Mallakam, Chavakachcheri, and Kayts (Jaffna district) by December 2013, serving 361,000 people in the 3 jurisdictions.

Assumptions

• Sufficient judges and other court officials proficient in English and Tamil are available.

• Courthouses are used by the communities for dispute resolution and vindication of their legal entitlements.

Risks

• Area-based lawyers are unavailable in the short term.

Furnishing and equipment were installed in Kayts and Chavakachcheri by March 2014 and Mallakam by July 2014. Additional furniture and computing equipment were installed in the other court complexes in NP to improve their performance.

The level of legal governance improved significantly at the three centers: the new facilities attracted judges and lawyers to return from Colombo; the rule of law has become respected. After almost 30 years of instability, the presence of judges has created a new sense of stability. Land ownership issues and property rights are being resolved for returnees and IDPs.

The UNDP ‘Access2Justice’ training program was successfully linked.

Appendix 1 21

Activities with Milestones [Note 8] Inputs by Source

Government: $18.24 million

Item $ million

Incremental 1.02

Taxes and duties 17.22

Total funds available 18.24

International Committee of the Red Cross

Grant (0246 SRI): $1.5 million (for water supplies)

Inputs by Category: Appendix 6 includes appraisal estimates and

actual costs by completion.

ADB = Asian Development Bank; BCR = borrower’s completion report; CAARP = Conflict-Affected Area Rehabilitation Project; CARE = Conflict-Affected Region Emergency; CEB = Ceylon Electricity Board; ENREP = Emergency Northern Recovery Project, Eastern Province; EP = Eastern Province; FO = farmer organization; ha = hectare; HIES = Household Income and Expenditure Survey; IDP = internally displaced person; km = kilometer; kV = kilovolt; MW = megawatt; NCP = North Central Province; NCPID = North Central Province Irrigation Department; NECCDEP = North East Coastal Community Development Project; NECORD = North East Community Restoration and Development; NP = Northern Province; NPID = Northern Province Irrigation Department; PCQAU = Project Coordination and Quality Assurance Unit; SWE = salt water exclusion; TAARP = Tsunami-Affected Areas Rebuilding Project; UNDP = United Nations Development Programme.

Note: The design and monitoring framework (DMF) is based on the CARE project report and recommendation of the President (RRP) (2010), with minor rearrangement of the ‘output’ outputs to highlight sub-outputs and distinguish physical outputs under ‘performance targets,’ to evaluate against ‘actual achievements.’ 1. ‘Access to safe drinking water,’ in the Sri Lankan context, implies the availability of such water within 200 meters of a household.

2. Pradeshiya Sabha is a periurban or rural area local authority.

3. The Eachchalampattu scheme was built, within budget, with additional headworks capacity to serve the Serunuwara community, for which the National Water Supply and Drainage Board will construct a water distribution system and tower from other funding sources.

4. Output C was subject to several changes during implementation, including the addition of small tank schemes in the Welioya area (NP), a cultural hall in Mannar, and office buildings and rural electrification in Welioya. These were approved by ADB but later dropped by the Government of Sri Lanka. The C.3 sub-output was added to cover infrastructure improvements to small tank cascades of sub-outputs C.1 and C.2 and in EP. The vocational training center sub-output (C.5) was dropped in November 2010 because the government was offered funds from another source.

5. ‘Irrigation schemes’ comprise clusters or cascades of tanks and command areas (large = > 400 ha; medium = 80–400 ha; small = <80 ha). The Ministry of Irrigation handles large schemes, but, exceptionally, NPID was given responsibility for some large schemes if the water source is from NP.

6. The poor response to the road quality likely reflects expectations that the roads would be all-weather, with tarred surfaces.

7. The main text of the RRP defines Output D as reconstruction of ‘Legal Infrastructure,’ but the DMF Output more correctly refers to ‘Improved Legal Governance,’ which was expected to derive from infrastructure reconstruction. The RRP referred to ‘up to nine judicial centers,’ but the DMF showed ‘nine judicial centers’ benefiting up to 1 million people. The DMF is amended to match the RRP wording. During implementation, the Ministry of Justice decided to concentrate available funds on three centers, using its own funds for six centers. At the midterm review, the target was reduced to three centers, with jurisdictions’ population of 361,000; supplementary furniture was provided for other centers.

8. ‘Activities’ given in the RRP DMF were not specified: focus is on the milestones to be achieved. As the project was formulated under the Disaster and Emergency Assistance policy, funds for implementation of approved sub-projects were disbursed, via the PCQAU and IAs, to contractors, who undertook activities for

22 Appendix 1

government agencies according to government systems. It was therefore not possible to precisely specify the required ‘activities,’ or ‘outputs’ at design.

Sources: ADB. 2010. Report and Recommendation of the President of the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Conflict-Affected Region Emergency Project. Manila; Government of Sri Lanka. 2014. Conflict-Affected Region Emergency Project – Borrower’s Project Completion Reports: A.1 Ministry of Highways, Ports, and Shipping, Colombo; A.2 Northern Province Road Development Department, Jaffna; A.3 North Central Provincial Council, Roads Development Authority, Anuradhapura; B.1 Ministry of Water Supplies and Drainage, Colombo; B.2 Ceylon Electricity Board, Colombo; C.1 Northern Province Irrigation Department, Jaffna; C.2 Provincial Irrigation Department, NCP, Anuradhapura; C.3 Ministry of Economic Development, Colombo; C.4 Ministry of Public Administration and Home Affairs, Colombo; D.1 Ministry of Justice, Colombo.

Appendix 2 23

DESCRIPTION OF OUTPUTS

I. INTRODUCTION

1. This appendix describes each of the Conflict-Affected Region Emergency Project (CAREP) outputs and sub-outputs, as listed in Table A2.1. Justifications are given for each, as proposed at design in the report and recommendation of the President (RRP) and including any changes made during implementation. Implementation arrangements are described, and overall budget figures are given for each sub-output.

2. The estimated and actual costs for each sub-output are summarized in Table A2.2.

Table A2.1: Outputs and Sub-Outputs

Output and Sub-Output

A. Reestablished Connectivity C. Improved Basic Social Services

A.1 National Roads C.1 NP Small & Medium Irrigation Schemes

A.2 NP Provincial, Municipal & Urban Roads C.2 NCP Small & Medium Irrigation Schemes

A.3 NCP Local Authority Roads C.3 Small Tank & Cascade Irrigation Systems

B. Restored Utilities C.4 Administrative Offices Reconstructed

B.1 Power Supply D. Improved Legal Governance

B.2 Water Supply Schemes D.1 Judicial Centers Reconstructed

NCP = North Central Province, NP = Northern Province. Source: Project Completion Review Mission

Table A2.2: Sub-Output Cost Estimates and Actual Expenditure ($ million)a

Sub-Output At Design Actual %

A.1 National Roads 38.08 34.92 92%

A.2 NP Provincial, Municipal & Urban Roads

37.14 29.10 78%

A.3 NCP Local Authority Roads 2.00 1.48 74%

B.1 Power Supply 32.81 14.20 43%

B.2 Water Supply Schemes 7.31 11.85 162%

C.1 NP Small & Medium Irrigation Schemes

18.94 27.47 145%

C.2 NCP Small & Medium Irrigation Schemes

2.76 6.71 243%

C.3 Small Tank & Cascade Irrigation Systemsb

N/A 10.96 N/A

C.4 Administrative Offices Reconstructed 9.89 9.51 96%

(C.4) Vocational Training Centersc 8.92 0.00 0%

D.1 Judicial Centers Reconstructed

Project Management 9.14

1.26

5.59

0.47

61%

37%

Total 168.24 152.26 90%

N/A = not applicable, NCP = North Central Province, NP = Northern Province. a The cost includes financial charges at design and during implementation. b This sub-output was added in 2013, using savings from other sub-outputs and contingency. c This sub-output was dropped by government. Source: Appendix 6.

24 Appendix 2

II. OUTPUT A: REESTABLISHED CONNECTIVITY

A. Introduction and Justification

3. Through rehabilitating national, provincial, and local authority roads, this output aimed to increase connectivity for returning internally displaced persons (IDPs), thereby providing basic services and livelihood recovery and encouraging increased investment. Local and provincial council roads serve communities located away from the economic activity centers. These communities have high poverty incidence and lack economic opportunities. This output focused on critical network sections that will complement other development partner-supported work. Three sub-outputs were included.

B. Sub-Output A.1: National Roads

1. Introduction and Justification

4. National roads are the main arteries of road transport within northern province and between adjacent provinces. During the armed conflict, most national roads were damaged. After 2009, the Asian Development Bank (ADB), under the Northern Road Connectivity Project, and the China Exim Bank and the China Development Bank, under the priority roads project, supported improvements to critical national roads in Northern Province. To complement these works, CAREP selected the Mankulam to Vellankulam road (B269 – 40.0 kilometers [km]) and the Paranthan–Pooneryn Road (B357 – 25.7 km) to be rehabilitated under two civil works contracts— CP1 for B269 and CP2 for B357.

2. Implementation Arrangements

5. Rani Infrastructure Development, India was the contractor for CP1, and K.D. Ebert and Sons Holdings (Pvt) Ltd with Rani Infrastructure Development, India were joint venture contractors for CP2. Contractors were procured through international competitive bidding. Both contracts were slow to start, but the performance of CP1 was unsatisfactory, as it was completed 21 months late.

6. The implementing agency for national roads was the Ministry of Highways, Ports, and Shipping,1 through its Road Development Authority (RDA). RDA completed the preparatory works using retroactive financing and engaged an international consultancy firm for construction supervision (IMC Worldwide Ltd of the UK, with Engineering Consultants Pvt Ltd and EMI Consultants Pvt Ltd of Colombo).

3. Significant Changes

7. The overall sub-output allocation had to be increased because of cost escalations in two civil works contracts and extra costs for additional inputs from the longer implementation. The contractors were responsible for detailed designs of both roads. Designs for CP1 and CP2 were completed, and quantities calculated, by August 2012. Once designs were finalized, quantities of major work items, such as embankment construction materials, significantly increased.

4. Budget

8. The original ADB allocation for sub-output A.1 was $38.08 million. The total commitment at completion was $34.92 million. The reduction was 8% of the original allocation.

C. Sub-Output A.2: Northern Province Provincial, Municipal & Urban Roads

1 The current ministry name is Ministry of Higher Education and Highways.

Appendix 2 25


9. This sub-output was to rehabilitate provincial council, local authority roads in Jaffna, Kilinochchi, Mannar, Mullaitivu, and Vavuniya districts. Road selection was done to complement ongoing or proposed road works by ADB, World Bank, and other development partners.

10. Jaffna district was not included for provincial council roads, as it had an ongoing World Bank-funded project to rehabilitate about 100 km of provincial roads.


11. The Northern Provincial Council, through the Northern Province Road Development Department, implemented the sub-output. The sub-output had 12 provincial roads contract packages and 21 local authority roads contract packages. A total of 72.1 km provincial roads and 90.5 local authority roads were completed. National competitive bidding processes were adopted to select local contractors for civil works contracts. Some contracts were completed by 30 September 2013, but four contracts were not completed until March 2014. The completion delays were mainly because of small-scale contractors’ poor performance.


12. Due to the contractors’ poor performance, two packages—PS2 in Mullativu district and PS10 in Mannar district—could not be completed. These involved about 6 km of roads.

4. Budget

13. The original ADB allocation for sub-output A.2 was $37.14 million. The total allocation at completion was $29.10 million, representing a 22% reduction.

D. Sub-Output A.3: NCP Local Authority Roads


14. The sub-output targeted local authority roads (Pradeshiya Sabha) that provide access to houses. As such, these roads are critical for restoring livelihoods of conflict-affected people.


15. The North Central Provincial Council, through the NCP RDA, implemented NCP roads. The sub-output had 3 contract packages in NCP’s bordering villages.

3. Budget

16. The original ADB allocation for sub-output A.3 was $2.00 million. The commitment at completion was $1.48 million, representing a 26% reduction.

III. OUTPUT B: RESTORED UTILITIES


17. Most electricity infrastructure in northern province was destroyed during the conflict, or had deteriorated since. Jaffna relied on unreliable power from two local generators. The output aimed to reconnect Jaffna to the national grid. Two water supply schemes were to be constructed to meet the needs of resettled IDPs, who relied on inferior-quality water from dug or tube wells.

B. Sub-Output B.1: Power


26 Appendix 2

18. During the conflict, most electricity infrastructure in the Northern Province was destroyed. An unreliable and sporadic electricity supply was available from two small thermal generators that provided electricity at a very high unit cost. Partial and total blackouts were a common occurrence. The project restored a reliable supply to the Northern Province by (i) the construction of a grid station at Chunnakam and (ii) the construction of a new transmission line from Kilinochchi to Chunnakam. The two investments would connect the entire Jaffna peninsula to the national grid, enabling a reliable and high-quality power supply.


19. The implementing agency for the sub-output was Ceylon Electricity Board (CEB). CEB carried out the detailed engineering design, and the projects were implemented on a design and built (turnkey basis). Two contractors were recruited using international competitive bidding procedure for the two contract packages. Siemens Limited, India was the contractor for the Chunnakam grid substation construction, and KEC International Limited, India, was the contractor for the Kilinochchi–Chunnakam transmission line construction. Both contractors were initially slow, but with CEB’s strict and continuous supervision, contracts were completed satisfactorily and on time.

4. Budget

20. The original ADB allocation for sub-output B.1 was $32.81 million. The commitment at completion was $14.20 million, representing a 57% reduction.

C. Sub-Output B.2: Water Supply


21. The sub-output supported water supply schemes at Eachchalampattu in Trincomalee district (Eastern Province) and Point Pedro in Jaffna district (Northern Province). These schemes were designed to meet the needs of resettled IDPs in conflict-affected areas. Most water supply schemes in small towns of the conflict-affected areas are dilapidated and urgently need rehabilitation. The population relies mainly on dug and tube wells for their water needs. This water is not always fit for consumption, and the wells are not easy to use. Moreover, near-future development activities in the area will create greater demand for water supply facilities.


22. The National Water Supply and Drainage Board (NWSDB) was the implementing agency for the sub-output. NWSDB implemented the project through their existing project management unit (PMU) under L1993/2275/2276-Secondary Towns and Rural Community Based Water Supply and Sanitation Project. This PMU has been implementing ADB-assisted water supply projects since 2003 and is experienced with ADB procedures.

23. The NWSDB undertook water supply project design and construction supervision. Three individual consultants were recruited to conduct environmental and social assessments, and to prepare the borrower’s completion report. Two project implementation units were established in Eachchalampattu and Point Pedro, as the PMU is based in Colombo. Sub-output disbursements were channeled through the Ministry of Economic Development (MED), the executing agency.


24. The Point Pedro project was implemented without any significant change. During the Eachchalampattu project, the government requested extending the project to the adjoining Serunuwara area, with a population of 16,000. Because of time constraints and fund limitations, it was not possible to incorporate the expansion in the project. However, the project constructed

Appendix 2 27

a water intake and treatment plant and pump house to cater to future additional demand in Serunuwara.

4. Budget

25. The original ADB allocation for sub-output B.2 was $7.31 million. The total commitment at completion was $11.85 million (Loan 2626: $10.45 million; Grant 0246: $1.40 million), which is 62% higher than the original allocation.

IV. OUTPUT C: IMPROVED BASIC SOCIAL SERVICES


26. The output aimed to restore essential basic social services and livelihood opportunities for the population through (i) restoring about 10 small- and medium-sized irrigation schemes, as agriculture is the main livelihood source; and (ii) rebuilding 10 administrative offices, and providing related facilities. The output included reconstructing district vocational training centers, but this was removed at the government’s request in November 2010. An additional sub-output to rehabilitate small tanks scheme infrastructure and rural access roads was introduced in 2013.

B. Sub-Output C.1: Northern Province Medium Irrigation Schemes


27. Agriculture is the primary economic activity for a majority of the population in Northern Province, which is in the dry zone and has limited and irregular rains from the northeast monsoon. The province’s cropping intensity remains low, as a majority of irrigation tanks and canals were dilapidated because of conflict damage or limited-to-no maintenance or investment since the early 1980s.


28. The sub-output was implemented by the Northern Province Irrigation Department (NPID), through government structures and procedures at the national, provincial, district, division, and local authority levels. The NPID PMU, established at the Director of Irrigation office, Kilinochchi, managed the project on a day-to-day basis. The Director of Irrigation, Northern Province, functioned as the project director in addition to his other duties and responsibilities. There was provision to engage about 32 regular staff (technical, financial, and support) on a part-time basis for CAREP activities, but it was necessary to engage more than 50 personnel for CAREP.

29. The focus was on NPID rehabilitating dilapidated or abandoned medium and large2 tank schemes in Mullaitivu, Vavuniya, Kilinochchi, and Jaffna districts, comprising 4 large schemes, 13 medium schemes, and 7 saltwater exclusion schemes. With the change of scope (para. 31), 49 small tank schemes were also rehabilitated (11 in Mullaitivu district, and 38 in Vavuniya and Mannar districts), and improvements were made to 109 agricultural roads in Jaffna, Vavuniya, and Mannar districts, totaling 307 km. Farmer organizations participated in selection, design, and laboring, and in constructing field turnouts. A total of 6,839 farm families, all former IDPs, restarted cultivation on 12,759 hectares (ha).


30. It became clear during implementation that significant loan funds would remain unused by the intended completion date of September 2013. Therefore, the scope and number of subprojects were extended, with emphasis on using funds for conflict-affected people. The 2 Large = >400-hectare (ha) command area; medium = 80–400 ha; small = <80 ha. Large schemes are the

responsibility of the Ministry of Irrigation. However, NPID had exceptional permission to handle large schemes if the catchment lay within Northern Province.

28 Appendix 2

expanded project included two subprojects: (i) rehabilitating small irrigation systems, and (ii) improving agricultural roads. These were seen to offer the greatest potential impact to recently settled IDPs. Almost all direct beneficiaries of the additional 49 small irrigation schemes were resettled IDPs, who depended on irrigation for their livelihoods. Similarly, rehabilitating 105 agricultural roads reestablished connectivity, reduced travel time and vehicle operating costs, and improved marketing and trade. As such, the additional subprojects would create considerable positive impact for beneficiaries.

4. Budget

31. The original ADB allocation for sub-output C.1 was $18.94 million. The total commitment at completion was $27.47 million, which was 45% more than the original allocation, financed by fund reallocations.

C. Sub-Output C.2: North Central Province Medium Irrigation Schemes


32. NCP districts bordering Northern Province had suffered during the conflict. As in Northern Province, agriculture is the main economic activity for a majority of the population, and is also subject to limited and irregular rains from the northeast monsoon. The cropping intensities remain low because most irrigation tanks and canals were dilapidated due to conflict damage or inadequate upkeep. Returning IDPs needed rehabilitated tank schemes to restart farming and restore their livelihoods.


33. The NCP Irrigation Department (NCPID) was the implementing agency. The chief secretary monitored the project at the provincial level. A project director coordinated implementation with ADB, MED, the chief secretary, Central Engineering Consultancy Bureau, and construction contractors. Implementation was done by NCPID’s PMU, with support of consultants. After the subproject selection, consultants prepared project proposals.

34. NCPID rehabilitated 62 small tank irrigation schemes in areas of Anuradhpura district bordering Northern Province. Works included repairs to bunds, headworks, sluices, spillways, and main channels to farmer turnouts. The scheme command areas covered 3,000 ha. A total of 3,236 farm families were resettled on 1,740 ha of land and able to restart irrigated farming.


35. At the request of the government, the number of tank schemes to be rehabilitated was increased significantly, using budget reallocated from savings on other outputs.

4. Budget

71. The original ADB allocation for sub-output C.2 was $2.76 million. The total commitment at completion was $6.71 million, or 143% more than the original allocation, covered by fund reallocations.

D. Sub-Output C.3: Small Irrigation and Agricultural Roads


36. At design, ADB explored the possibility of a grant project to complement the other irrigation sub-outputs (C.1 and C.2) by rehabilitating 200 km of field irrigation canals and about 150 km of rural access roads with extensive IDP participation.

37. In 2013, MED proposed a sub-output to rehabilitate small tanks and abandoned agricultural roads, covering Anuradhapura, Mullaitvu, Kilinochchi, Vavuniya, Jaffna, and

Appendix 2 29

Trincomalee Districts. The proposal included de-silting tanks, downstream development, market access or agricultural feeder roads, and other infrastructure rehabilitation. The sub-output, which started in June 2013, planned to cover essential works on smaller schemes in conflict-affected areas not covered by other projects (e.g., sub-outputs C.1 and C.2). It aimed to rehabilitate, by July 2014, about 200 infrastructure works on small tank schemes (individual and cascade) and agricultural roads in conflict-affected areas of Northern, North Central, and Eastern provinces.


38. The implementing agency for the additional sub-output was MED, through the Project Coordination and Quality Assurance Unit and in collaboration with the Department for Agrarian Development (DAD). The project director was the DAD Commissioner General. The Project Coordination and Quality Assurance Unit coordinator, who was working as the director of regional works for MED, coordinated reimbursements, staff recruitment, settlement of implementation issues, and the relationship with ADB. A project implementation unit was established at Mihinthale, from where field implementation works were carried out under the supervision of the respective district coordinator or chief project engineer.

39. The project’s overarching goal was to secure the livelihoods of returning IDPs. Its major objectives were to (i) rehabilitate the urgently needed infrastructure, by repairing and raising tank bunds and renovating sluice gates; (ii) de-silt for increased tank capacity, to minimize risks of crop failures from water shortages and to increase the amount of land irrigated from the tank; (iii) renovate damaged and neglected agricultural roads; and (iv) introduce new cultural practices and cropping systems to achieve higher yields and incomes.

40. Rehabilitation covered 151 small tank systems, including bund and headwork repairs and de-silting, and 129 agricultural roads (398 km) in six districts of Northern, North Central, and Eastern provinces. Rains disrupted construction slightly, and some works could not be fully completed. Farmer organizations were engaged as direct contractors for 49 tank and 27 road contracts and provided labor, equipment, and advice to small contractors working on other schemes. Tank de-silting by the farmers provided communities with income during the 2013 maha season drought. 3 In total, 6,692 farm families, most of whom were resettled IDPs, restarted cultivation on 4,157 ha. The agricultural roads gave farmers market access for crop sales. The results of a sample survey of farmers by DAD showed that the vast majority was satisfied with the improved cropping potential, water table levels, and livestock water supply.


41. There were no significant changes during implementation.

4. Budget

42. The total commitment for subcomponent C.2 at completion was $10.96 million.

E. Sub-Output C.4: Administration Offices Reconstructed


43. During the conflict, most divisional secretariats and district secretariat building (public administration buildings) were damaged. After the restoring of normalcy in 2009, divisional secretariats and district secretariats offices were functioning out of small rented buildings without proper facilities. Because of space constraints in these buildings, different divisions and units of divisional and district secretariats offices were scattered in different locations, causing the public major inconvenience.

3 The maha cropping season, which failed in 2013, was during the north east monsoon.

30 Appendix 2


44. The Ministry of Public Administration and Home Affairs was the implementation agency for this sub-output. The ministry engaged the Urban Development Authority for design and the Northern Province Building Department for construction supervision.


45. There were no significant changes.

4. Budget

46. The original ADB allocation for sub-output C.4 was $9.89 million. The total commitment at completion was $9.51 million, representing a 4% reduction.

V. OUTPUT D: IMPROVED LEGAL GOVERNANCE


47. The prolonged conflict had prevented judicial administration institutions in Northern Province from functioning effectively. With the conflict end, rehabilitation and reconstruction of the judicial infrastructure was urgently needed, as its absence negatively impacted the perceived personal and communal security of the war-affected communities and IDPs. Judicial officers had already been appointed, but most court proceedings took place under extremely difficult conditions in partially damaged buildings. The output therefore aimed to provide access to legal infrastructure to 1 million people in Northern Province.

48. ADB and the United Nations Development Programme (UNDP) signed a letter of understanding for cooperation in UNDP’s ‘Access2Justice’ project to provide capacity building and institutional support to the judicial sector in Northern Province.4 Access2Justice (funded by Germany under a $1.9 million grant) provided capacity-building support to 36 courts in Northern and Eastern provinces, including the nine originally selected for CAREP. It was successfully conducted in partnership with the Ministry of Languages and Social Integration 5 and other agencies.6 The project provided support for (i) training the judiciary and legal service providers, (ii) access to legal aid for the most vulnerable, (iii) grievance mechanism procedures, (iv) quasi courts for dealing with women’s grievances, and (v) alternative sentencing. The project ended in December 2012 but was extended as a new countrywide project, Strengthening Enforcement of Law, Access to Justice, and Social Integration.

B. Sub-Output D.1: Judicial Centers Reconstructed


49. The Ministry of Justice (MOJ) was the implementing agency. It had already been implementing part of the ADB-financed Tsunami Affected Area Rebuilding Project (G0006) and had sufficient experience implementing similar government and externally aided projects. Central Engineering Consultancy Bureau was the design, procurement, and supervision consultant for the judicial infrastructure, such as courthouses, financed by MOJ’s budget. A dedicated team of core staff implemented the project. Additional staff were also recruited using CAREP funds to augment the MOJ's capacity. The MOJ secretary provided overall guidance, and the additional secretary of MOJ was the project coordinator for the sub output under

4 ADB and UNDP. 2010. Letter of Understanding: Providing legal assistance and institutional support for the judicial

sector in Northern Province of Sri Lanka, 15 March 2010. Colombo. 5 Initially under Ministry of Constitutional Affairs and National Litigation. 6 Agencies included Ministry of Justice, Ministry of Prison Reforms and Rehabilitation, Legal Aid Commission, Bar

Association, Judicial Services Commission, and selected nongovernment organizations.

Appendix 2 31

CAREP. The key engineering staff and the project director will need to certify the quality aspects of the building.


50. At appraisal, the sub-output was to rehabilitate courthouses and related facilities in up to nine strategic locations in Northern Province. During the detailed planning phase it was found that the level of facilities and services required by each court complex would be more than originally envisaged. The MOJ therefore decided to concentrate CAREP support on reconstructing three priority courthouses and providing furniture, equipment, and machinery for the original nine courthouses. Three courthouses—Chavakachcheri, Mallakam, and Kayts—were reconstructed. The government financed reconstruction of the other courthouses, except for the new Mankulam Courthouse, even though loan funds were available.

3. Budget

51. The original ADB allocation for output D.1 was $9.14 million. The total commitment at completion was $5.59 million, which was 61% of the original allocation. The use of government funds for reconstruction of other courthouses was the main reason for the underuse of budget.

32 Appendix 3

IMPLEMENTATION TIMELINE AND SCHEDULE

Figure A3.1: Timeline of Project Administrative Milestones

Appendix 3 33

Figure A3. 2: Proposed and Actual Implementation Schedule

34 Appendix 3

Appendix 4 35

COMPLEMENTARY DEVELOPMENT PROJECTS

A. Introduction

1. During preparation of the Conflict-Affected Region Emergency Project (CAREP), the Asian Development Bank (ADB) discussed the post-conflict development needs with the government of Sri Lanka and other donor agencies to identify development gaps and avoid duplication of effort.

B. Major Development Partners: Strategic Focuses and Key Activities

2. At design, the United Nations (UN) and affiliated agencies continued to provide humanitarian, rehabilitation, and livelihood assistance to returning internally displaced persons (IDPs). This included assistance from (i) the UN High Commissioner for Refugees in initial relocation support and protection-related issues; (ii) the UN Office for Project Services in rehabilitation work; (iii) the UN Children's Fund (UNICEF) in water sanitation, child health and nutrition, and mine risk awareness; (iv) the Food and Agriculture Organization in seeds and agricultural equipment; (v) the UN Development Programme (UNDP) in de-mining (in coordination with other development partners), livelihood, and early recovery; (vi) the International Organization for Migration in logistical support for transporting IDPs to their place of origin; (vii) the World Food Programme in essential food items; and (viii) the World Health Organization in health and nutrition support.

3. The World Bank-funded Emergency Northern Recovery Project provided IDP assistance through (i) assisting in the return to households and re-engagement in farming and marine fisheries by resolving issues on property rights, clearance of paddy lands, and provision of basic implements to restart livelihoods; (ii) providing workfare to assist in rebuilding homes and infrastructure; and (iii) rehabilitating and reconstructing essential infrastructure, such as roads, water supply and sanitation, small irrigation works, and public service buildings. Through other ongoing projects, the World Bank also supports (i) the education, health, and road sectors; (ii) community livelihood and related infrastructure projects; and (iii) owner-driven housing rehabilitation.

4. Bilateral partners had also provided or pledged support. The Government of Australia had provided livelihood grants to returning IDPs, channeled through ADB and the World Bank. The Government of India, while continuing to meet immediate needs in shelter, agriculture, and medical supplies, had also pledged support for long-term reconstruction needs, particularly for railways. The Japan International Cooperation Agency was assisting in the rehabilitation of irrigation tanks, roads, and the agriculture and power sectors. It was also supporting a skills training program for frontline officers in Northern and Eastern provinces on community development. The People's Republic of China had provided humanitarian assistance and construction equipment, and proposed to assist in long-term reconstruction needs by rehabilitating much of the major road network in the conflict-affected region. The United States Agency for International Development was providing humanitarian assistance to the IDPs, through its Public–Private Alliance Project in Northern and Eastern provinces, to create more than 16,000 jobs. It had also initiated a program to assist the reintegration of ex-combatants.

5. Table A4 shows the principal development activities in the conflict-affected regions through ADB and other principal donor agency projects, both ongoing and proposed, in each sector.

36 Appendix 4

C. Institutional Arrangements and Processes for Development Coordination

6. Extensive consultations were held with other development partners to ensure CAREP-supported activities would not overlap with their activities. In particular, ADB coordinated closely with the World Bank so that CAREP would complement activities under the World Bank's Emergency Northern Recovery Project. The monthly development partner coordination meetings, of which ADB is one of the rotating co-chairs, provided an opportunity for ADB to liaise with other Northern Province programs. Further, as a member of the UN country team, ADB briefed UN organizations and was briefed in turn on the UN's operations in the conflict-affected regions. ADB also coordinated with the World Bank in implementing the two emergency projects. When more development partners became involved in the rehabilitation work, coordination meetings were held regularly, as was done after the December 2004 tsunami.

7. The proposed implementation structure supported development partner coordination at the field level. Most development assistance to Northern and Eastern provinces was channeled through the Ministry of Nation Building and Estate Infrastructure Development (later the Ministry of Economic Development). As the CAREP executing agency, the ministry was responsible for coordination. At the provincial level, district committees and provincial steering committees would provide the forums to strengthen coordination, not only among development partners but also among line agencies.

D. ADB Coordination Achievements

8. The ADB Sri Lanka Resident Mission worked closely with other development partners, particularly in the aftermath of the tsunami, as well as on previous and ongoing projects in the conflict-affected areas. ADB, together with the World Bank, played a key role in the tsunami reconstruction efforts and co-chaired development partner coordination meetings.

9. Furthermore, ADB obtained cofinancing from several development partners (Swedish International Development Cooperation Agency, the Organization of the Petroleum Exporting Countries, the Government of the Netherlands, the Government of Finland, and the Government of Norway) for projects under the North East Community Restoration and Development (NECORD) project family (NECORD II and NECORD Extension), and from the European Union and the Government of France through the French Development Agency for the Tsunami-Affected Area Rehabilitation Project. This indicates the strong coordination between ADB and other development partners. The recent addition of A$8 million from the Australian Agency for International Development to NECORD II in 2009 is further proof of this coordination.

10. By strengthening existing forums for development partner coordination, through increased frequency of meetings, and improving coordination during implementation via regular national and provincial steering committee meetings, ADB was able to minimize overlaps. Furthermore, the close coordination helped ensure that future projects by other development partners could address gaps and complement CAREP-supported activities.

E. Outputs Selected for the Conflict-Affected Region Emergency Project

11. ADB selected investments in seven subsectors: (i) roads, (ii) electric power, (iii) water supplies, (iv) minor irrigation, (v) administrative infrastructure, (vi) vocational training infrastructure, and (vi) legal infrastructure. These were to cover parts of Northern Province, as well as conflict-affected areas of Eastern and North Central provinces. The project aimed to fill gaps and complement other agencies’ activities.

12. The immediate post-conflict period was one of evolving government policies. Consequently, as other donors came forward, the government altered or dropped some CAREP

Appendix 4 37

sub-outputs to be adopted by grant funding donors or other sources. This was the case with the CAREP vocational training infrastructure and some of the legal infrastructure sub-outputs.

Table A4: Complementary Development Projects

Sectors and Themes

Development Partner

Project Name Expected Duration Funding

Agriculture and Natural Resources, Water Supply and Other Municipal Infrastructure and Services

Government of Australia (Ausaid)

Livelihood Support through Cash Grants

Expected to be completed by end June 2010

A$20 million

JICA Pro-Poor Economic Advancement and Community Enhancement—Rehabilitation of Tanks in Vavuniya, Mannar, and Kilinochchi

May 2003–May 2011

¥6,010 million

World Bank Emergency Northern Recovery Project

December 2009– December 2012

$65 million

ADB Conflict-Affected Area Rehabilitation Project (Formerly Emergency Assistance for the Rehabilitation of the North and East) – G0062/L2043 & 2044

October 2006–February 2011

$80 million

Tsunami-Affected Areas Rebuilding Project –G0006/0011/0045-L2167/8221

April 2005–April 2011

$157 million

Post-Conflict Emergency Assistance for Livelihood Restoration of Resettled Internally Displaced People in the North – G9150

August 2010–June 2014

$2.5 million

Dry Zone Urban Water and Sanitation Project –Grant0129/0130-L2477

November 2008– December 2016

$83 million

Dry Zone Urban Water and Sanitation Project – Additional Financing –L2977

December 2012–December 2016

$40 million

Sri Lanka Flood Disaster – G0247

February 2011– August 2011

$3 million

Energy JICA Kilinochchi–Vavuniya Power Transmission Line and Kilinochchi Grid Substation

After recommencement, completion expected December 2012

¥1,278 million

Public Sector

United Nations

Access to Justice 2009–2012 $7.7 million

38 Appendix 4

Sectors and Themes

Development Partner

Project Name Expected Duration Funding

Management Development Programme

Transport and ICT

Government of India

Rehabilitation of Northern Railway Line (Including Provision of Rolling Stock)

Loan pledge expected in mid-2010 and completion expected In mid-2013

$805 million

JICA Construction of Mannar Bridge and Causeway

June 2007–March 2010

About ¥1.8 billion

Provincial and Rural Road Development Project (Eastern Province)

Loan pledge expected in February 2010; estimated project period: April 2010–March 2013

Not exceeding ¥4 billion

Government of People's Republic of China

Road Sector Improvement Loan pledge expected in mid2010

About $450 million in first phase

World Bank Emergency Northern Recovery Project

December 2009– December 2012

$65 million

Provincial Roads Project December 2009– March 2015

$105 million

ADB Northern Road Connectivity Project – L2639/2640

June 2010–December 2015

$154.4

million

Northern Road Connectivity Project – Additional Financing – L2890/2891

September 2012– June 2018

$98 million

Multisector ADB North East Community Restoration and Development Project – G0075

February 2007– February 2009

$1.5 million

North East Community Restoration and Development – Extension Project – L2084

June 2004–October 2009

$10 million

North East Community Restoration and Development Project – G0007/0013/0193-L2168

December 2009– May 2013

$40 million

ADB = Asian Development Bank, ENREP = Emergency Northern Recovery Project, ICT = Information And Communication Technology, JICA = Japan International Cooperation Agency. Source: Sri Lanka Resident Mission, Colombo and International Development Association Project Paper on a Proposed Emergency Recovery Credit to the Democratic Socialist Republic of Sri Lanka for The Emergency Northern Recovery Project (December 2009); ADB Consultations with Development Partners.

Appendix 5 39

SOCIAL, ENVIRONMENTAL, AND GENDER ASSESSMENT

I. INTRODUCTION

1. This report presents the assessment findings from the social, gender, and environmental outcomes and safeguards of the Conflict-Affected Region Emergency Project (CAREP). It is based on assessments of a sample of subprojects to identify, review, and analyze the significant outcomes of project interventions.

II. METHODOLOGY

2. The assessment was qualitative, and focused on eliciting the experiences and perceptions of project beneficiaries and implementers. Emphasis was placed on capturing the project interventions’ social, gender, and environmental outcomes. These outcomes are discussed in relation to outputs and sub-outputs. This report also examines the level of safeguards built into project design and implementation, and their compliance.

3. The methods included (i) a review of project-related documents, (ii) focus group discussions with beneficiaries, and (iii) in-depth interviews with staff of project implementing agencies. Discussions and interviews revolved around pre-project situations, implementation processes, benefits and outcomes of interventions, safeguard issues, and project-related issues and challenges.

4. A sample of 41 subprojects, representing the four outputs, was selected for the assessment in consultation with the implementing agencies (Table A.5.1). The subprojects selected were spread over five districts in Northern Province, namely Jaffna, Kilinochchi, Mullaitivu, Mannar, and Vavuniya, and in the Anuradhapura district in adjoining areas of North Central Province (NCP).

5. Beneficiaries participating in the focus group discussions totaled 356, comprising 224 men and 132 women. A total of 43 implementing agency staff members were interviewed, including project directors, deputy project directors, project engineers, technical officers, and consultants. The assessment outcomes presented and discussed in this report are confined to the selected subprojects, and examples from subprojects are quoted as evidence.

Table A5.1: Sample of Subprojects Covered in the Assessment

No. District Subproject Name Subproject Category

1. Mannar Rehabilitation of Divisional Secretariat, Madhu Administration 2. Jaffna Construction of Divisional Secretariat, Delft

Island Administration

3. Mullaitivu Construction of the Welioya Divisional Secretariat

Administration

4. Mannar Construction of Male Staff Residential Quarters in Madhu Divisional Secretariat Division

Administration

5. Vavuniya Construction of Male Staff Residential Quarters in Vauvnia North Divisional Secretariat, Nedunkerney

Administration

6. Vavuniya Construction of Female Staff Quarters in Vauvnia North Divisional Secretariat, Nedunkerney

Administration

7. Jaffna Construction of Male Staff Residential Quarters, Delft Island

Administration

8. Jaffna Construction of Female Residential Staff Quarters, Delft Island

Administration

40 Appendix 5

No. District Subproject Name Subproject Category

9. Mannar Rehabilitation of Thimilankulam Tank Small Irrigation 10. Mannar Rehabilitation of Sinnasawarikulam Tank Small Irrigation 11. Vavuniya Rehabilitation of Irandaamsenkalpadei Tank Small Irrigation 12. Vavuniya Rehabilitation of Kollamaruthamadu Tank Small Irrigation 13. Vavuniya Rehabilitation of Kollamaruthamadu Tank Small Irrigation 14. Vavuniya Rehabilitation of Illupaikulam Tank Small Irrigation 15. Anuradhapura Rehabilitation of Kaluwaragaswewa Tank Small Irrigation 16. Anuradhapura Rehabilitation of Palugaswewa Tank Small Irrigation 17. Anuradhapura Rehabilitation of Aliayvatunawewa Tank Small Irrigation 18. Anuradhapura Rehabilitation of Yakawewa Tank Small Irrigation 19. Anuradhapura Rehabilitation of Kudakongaskada Tank Small Irrigation 20. Mullaitivu Rehabilitation of Udayakaddu Tank Small Irrigation 21. Mullaitivu Rehabilitation of Maruthamadhu Tank Small Irrigation 22. Jaffna Reconstruction of Mandathievu Swe Scheme Small Irrigation 23. Jaffna Reconstruction of Vernon Swe Scheme Small Irrigation 24. Mannar Rehabilitation of Erukkalampiddy West Darga

Nagar Road–1 Small Irrigation

25. Mannar Rehabilitation of Karisal Scheme – Road 2 Small Irrigation 26. Vavuniya Rehabilitation of Ulukkulama Unit 1 Road (by

NCP) Small Irrigation

27. Vavuniya Avarathulawa–Palleiruwa Bund Road Small Irrigation 28. Jaffna Rehabilitation of Pillaiyar Kovil Road Small Irrigation 29. Jaffna Rehabilitation of Kaddupulam Thiruvadinilai

Road Small Irrigation

30. Anuradhapura Construction of Iluppukanniya–Karuwelagaswewa Road

Small Irrigation

31. Mannar Rehabilitation of Manthai–Parappukadanthan Road

Provincial Roads

32. Vavuniya Rehabilitation of Rambakulam–Palammodai Road

Provincial Roads

33. Vavuniya Rehabilitation of Palammodai–Moonrumuripu Road

Provincial Roads

34. Anuradhapura Rehabilitation of Kadawatgma–Vedithibbagala–Nagadaranawa Pradeshiya Sabha Road

Provincial Roads

35. Jaffna Jaffna Municipal Council Roads Provincial Roads 36. Mullaitivu Rehabilitation of Kokavil–Thunakkai Road Provincial Roads 37. Jaffna Construction of Court Complex, Mallakkam Legal

Infrastructure 38. Jaffna Construction of Judge’s Residence, Mallakkam Legal

Infrastructure 39. Jaffna Construction of Chunnakkam GSS and 132kV

T/L from Kilinochchi to Chunnakkam Power Supplies

40. Jaffna Construction of the Point Pedro Water Scheme Water Supplies 41. Kilinochchi Rehabilitation of Paranthan–Pooneryn B357

Road National Roads

GSS = Grid Sub Station, kV = kilovolt, NCP = North Central Province. T/L = Transmission Line Source: Project Completion Report Consultant’s Field Study,

III. SOCIAL OUTCOMES

6. This section discusses the social outcomes from the subprojects’ implementation. These were observed for livelihoods and income restoration of the returning internally displaced persons (IDPs) and families who lived in the former conflict-affected adjoining NCP villages. The

Appendix 5 41

outcomes focus on their improved access to public services and utilities; their connectivity to the broader economic, social, and infrastructure milieu; and their ethnic reconciliation.

A. Output A: Reestablished Connectivity

1. Rehabilitation and Reconstruction of Roads

7. When IDPs returned to their homelands, most Northern Province roads remained dilapidated with potholes, and many were impassable. Transport services did not operate, and villagers had to walk long distances to reach available public transport services. Travelers had to spend many hours to reach their destinations. Some of the Pradeshiya Sabha roads were covered with thick vegetation, and it was with enormous difficulty that IDPs reached their homes and farmlands. The rehabilitation or reconstruction of Pradeshiya Sabha roads, provincial, municipal, and urban council roads, and national roads has provided significant social benefits to returning IDPs and other communities.

a. Public Transport and Time Saving

8. CAREP funds were used to rehabilitate and upgrade road networks. Pradeshiya Sabha roads were rehabilitated to provide access to resettlement housing schemes constructed for IDPs. For example, the 2.6-kilometer (km) long Erukkalampiddy-Darga Nagar road in Mannar district was upgraded from a sandy foot path to a gravel road, to provide access to Thasim resettlement housing scheme, where 125 families are to be resettled. Similarly, in the same district, the Kariasal scheme road was upgraded to a gravel road leading to Al-Ithsan resettlement housing scheme, where 100 families are to be resettled. Several other gravel roads, such as the Palammodai-Moonrumuripu road in Vavuniya district and the Kadawathgama-Vedithibbagala-Nagadaranawa road in Anuradhapura district, were upgraded with double bitumen surface treatment.

9. In villages where direct public transport services are still not available, rehabilitation of roads has increased villagers’ travel convenience, such as the 1 km Kaddupulam-Thiruvadinilai road (Jaffna district), which about 160 resettled families walk on to reach the hospital, market center in Panawatti, and school, all located 3 km from their settlement.

10. Rehabilitation of the national road between Paranthan and Pooneryn (25.74 km) reduced the travel time between the destinations from 1.5 hours to 30 minutes. Also, the distance to Jaffna via this new road was reduced by 10 km. Several government officers use this road to reach their offices. Furthermore, this road provides a shorter route from Kilinochchi to Mannar. Ambulances carrying patients in critical conditions from the Kilinochchi hospital to the Jaffna hospital also use this road because of its good condition and reduced traffic congestion.

11. The rehabilitation of the 11.86 km Mantahi-Parappukadanthai road in Mannar district has significantly improved public transport services on this road and has reduced travel time (e.g., between Mannar town and Wattakandal from 3 hours to 45 minutes). Transport services also improved on the 14.6 km Palammodai-Moonrumuripu road in Vavuniya district, with three buses running four times a day between Vauvnia town and Kovil Kunchkulam. New transport services run by both the government and the private sector have contributed to increased travel convenience of school children, employees in government and private sector institutions, and other community members to reach schools, workplaces, and other service centers. Meanwhile, transportation costs have decreased remarkably, particularly for those who use hired vehicles. Three-wheeler taxis that charged SLRs2,000 to carry passengers from Paranthan to Pooneryn have reduced to SLRs1,200 because of the improved road condition.

42 Appendix 5

b. Access to Markets, Trading, and Livelihood

12. Road improvements have also directly impacted villagers’ livelihoods and commercial activities. Several traders from out-stations began coming to the villages to purchase paddy and other upland crops directly from farmers, who otherwise had to depend on intermediary collectors or traders. Sinhalese traders from Medawachchiya and Muslim traders from Vavuniya now come to buy paddy, other agricultural produce, and cattle from farmers who live along the Palammodai-Moonrumuripu road in Vavuniya district. Three vehicles also operate from Mahalakulam and Nochchimolai to collect agricultural produce from villagers and deliver them to Vavuniya market centers. Farmers later go to these centers to collect their money. Farmers along the Pilliar Kovil road in Jaffna district are now able to transport their produce to Thirunalveli market, located 10 km away, and sell to about 15 other traders who come from other districts, such as Puttalam, Kilinochchi, and Mullaitivu.

13. Both direct marketing and farmers’ connectivity to the urban market centers has contributed to an increase in farmers’ incomes and reduced their dependency on middlemen traders. Interactions between farmer communities and the outside traders, who represent different ethnicities (e.g., Sinhalese, Muslims, Tamils), religions, and cultures has gradually led to increased mutual understanding and linkages between different ethnic communities.

14. The rehabilitation of the Kadawathgama-Vedithibbagala-Nagadaranawa Pradeshiya Sabha road in Anuradhapura district prompted several families living along the road to buy three wheelers and motorcycles for personal use, as public transport services still do not operate there. Some families began investing in commercial activities, such as small grocery stores and tea kiosks, along with road developments. About five small groceries emerged along the road immediately after its rehabilitation. Several marketing companies’ delivery vans supply products, such as toiletries, vegetables, and fruits, to these groceries and kiosks. In such situations, prices of goods began to stabilize as grocery owners spent less on their transportation. Also, with road rehabilitation, traders and manufacturing companies began entering interior villages to sell household goods, such as furniture, plasticware, and electronic equipment.

c. Urban Road Benefits

15. Many service-provision institutions—such as schools, health and medical centers, banks, cooperative stores, community centers, and administrative centers—were established, particularly along the rehabilitated provincial roads. The rehabilitation of about 40 municipal council roads connecting Jaffna city has benefitted residents, commuters, and traders in the city. Benefits included decreased travel time, improved travel convenience, reduced traffic congestion, increased control of dust and garbage dumping, opening of new commercial establishments, reduction in fuel consumption of three-wheeler taxis, better parking facilities for private buses, and increased buses operating from Jaffna city to its outskirts. Land values, particularly for properties located near rehabilitated roads, increased. For example, the price of an acre of land along the Paranthan-Pooneryn road has increased from SLRs400,000 to SLRs700,000 since the road was improved.

d. Benefits from Construction

16. Civil works connected with road rehabilitation and reconstruction also provided financial benefits to returning IDPs and their communities. Many IDPs were able to engage in manual labor work in road construction work for 3–12 months. It was reported that 80% of the labor force for the reconstruction of the Paranthan-Pooneryn road was filled by local communities and only skilled labor was brought from outside. Tractor owners in the villages were able to rent or lease out their tractors to the contractors for construction work. Several village groceries and kiosks provided meals to labor parties from outside. Despite a few complaints against some

Appendix 5 43

contractors for not paying laborers and tractor owners whom they hired, the majority of IDPs and other community members gained substantial financial benefits during road construction.

B. Output B: Restored Utilities

1. Restoration of Power Transmission Line and Grid Substation (B.1)

17. The construction of the Chunnakam (Jaffna) grid substation and the 67.2 km long, 132-kilovolt (kV) power transmission line connecting the national grid at Kilinochchi to the Chunnakam substation have significantly reduced power failures and fluctuations in Jaffna district, and have provided a stable and reliable electricity supply to residents, commercial and industrial establishments, and administrative and service-providing institutions.

a. Power Supply and Connections

18. The power generated by two plants—Northern Power (30 megawatts [MW]) and Uthuru Janani (24 MW)—are connected to the Chunnakam grid substation with a total capacity of 54 MW. The national grid connection has augmented power generation by 63 MW. There are future plans to add 15 MW of wind power to the Chunnakam station, generated by a private developer on the Jaffna peninsula’s north coast. The total power available (117 MW) will then be more than sufficient to meet Jaffna’s current power demand, which is about 45 MW. Eight new industrial establishments, to be set up in the Achchuveli industrial zone, have requested another 5 MW.

19. Prior to the new power links’ construction, Jaffna district’s rate of electrification was 75%. The project has enabled the Ceylon Electricity Board to increase its electrification rate to 92%. Jaffna district has 147,000 electricity consumers. Electricity has been supplied for:

(i) About 127,000 households; (ii) 3,000 units of small industries and agricultural irrigation; (iii) 15,000 units of commercial establishments, government institutions and schools; (iv) 2 large hotels; and (v) 2,500 religious institutions.

20. Small islands around Jaffna such as Nagadeepa, Delft, Analathievu, and Ellevaithievu have not yet been connected to the grid, however, the government have provided but diesel generators to each island to supply continuous electricity. The cost of generating a single unit of electricity from such generators is SLRs60–SLRs70.

b. Reliable Power Supply Benefits

21. Stable and reliable electricity supply has added provided consumers with several socioeconomic benefits. Consumers are satisfied with the power supply because they no longer experience the lengthy power cuts and fluctuations that occurred for 2 hours or longer almost every other day. Productivity of the industrial and commercial establishments has increased. Loss of earnings, because of power interruptions, for daily paid manual laborers has decreased. Jaffna now has the potential to supply sufficient electricity to the emerging industrial and commercial sectors, which will eventually create new employment opportunities.

2. Construction of Point Pedro Water Scheme (B.2)

22. The Point Pedro water supply scheme construction, jointly funded by the Asian Development Bank (ADB), International Federation of the Red Cross and Red Crescent Societies, and Government of Sri Lanka GOSL, was commissioned in September 2014. The water tower capacity is 1,350 cubic meters (m3). The water for the tank is pumped from four

44 Appendix 5

wells and a purification plant in Vallipuram, 4.3 km away. A 40 km distribution pipeline network has been laid to provide water to households.

a. Access to Safe Water

23. Previously, Point Pedro had no water scheme to serve its population of about 22,000 (5,000 households). Households depend on their individual wells and a few public wells. As water quality is poor in wells (high salinity levels), the Point Pedro Urban Council had provided water delivered from other areas using bowsers.. In addition, a few private individuals supply water, for which households pay SLRs40 per 10-liter barrel. A household would require two barrels a day, amounting to SLRs80 per day or SLRs2,400 a month. In this context, water connections to be provided by the National Water Supply and Drainage Board (NWSDB) from the new water scheme will contribute to a significant reduction of costs incurred by households for drinking water.

24. The new water scheme expects to provide connections to 4,000 households in Point Pedro. The number of households already connected (September 2014) is about 50, of which 20 are reported as Samurdhi households.1 The cost of obtaining a water connection for a household is fixed at SLRs17,500. The NWSDB provides a subsidy for poor households who receive Samurdhi subsidies, which enables them to get a water connection for SLRs5,536. Industrial and commercial establishments are charged SLRs24,620 for a water connection. There is a growing demand from the households to become connected to the main water supply scheme, but NWSDB has to restrict the volume of water extracted from wells to about 600 m3 per day to match the sustainable yield of the sand aquifer. A previous problem of iron staining of the water was resolved through flushing after rain.

b. Benefits of Water Access

25. The households already connected to the water supply scheme are content with the facility, as it supplies water 24 hours a day, eliminating the need to travel 1–2 km and wait in queues to draw water from public wells and taps.

C. Output C: Improved Basic Social Services

1. Rehabilitation of Irrigation Schemes and Agricultural Roads

26. This output included rehabilitation of small and medium irrigation schemes and small tank irrigation cascade systems, as well as rehabilitation of agricultural roads, under sub-outputs C.1, C.2, and C.3.

27. The rehabilitation of a many small and medium irrigation schemes has had a direct beneficial impact on restoring and improving the livelihoods of returning IDPs and families who live in former conflict-affected border villages of NCP. With the displacement of the communities, who had been dependent on these irrigation areas, the schemes had been abandoned for the past 20–30 years and some were under thick forest. The tank bunds, sluice gates, spillways, and feeder canals had been either damaged during the conflict or remained nonfunctional because of siltation and a lack of maintenance. Prior to the project’s irrigation scheme rehabilitation, the IDPs who returned to their villages used various temporary local methods, such as plugging broken tank bunds with sand bags to retain water, because of their immediate need to restart agricultural activities for subsistence.

1 Refers to low-income families who receive food subsidies and other benefits from the government under its national

poverty alleviation program.

Appendix 5 45

28. Except in a few irrigation schemes), where farmers complained of technical flaws in the civil construction works (e.g., Yakawewa and Kudakongaswewa tanks in Anuradhapura district, and Udayarkattu tank in Mullaitivu district), farmers expressed their satisfaction with scheme rehabilitation and anticipated numerous economic benefits, along with the expected monsoon rainfall to feed their irrigated fields. Farmers in Northern Province and NCP had not received rains for several months, since the completion of rehabilitation work.

a. Farmers Benefitting from Improved Irrigation

29. The rehabilitated small and minor irrigation schemes) have benefitted many farmer families, as shown in Table A5.2.

Table A5.2: Cultivated and Beneficiary Families in Rehabilitated Schemes

Irrigation Tank Name Extent of Paddy Land to be

Cultivated (ha)

No. Beneficiary Families

Sinnasavirikulam Tank (Mannar District) 16.2 11

Thimilakulam Tank (Mannar District) 40.4 45

Mandathievu Swe Scheme (Jaffna District) 145.4 160

Vernon Bund Swe Scheme (Jaffna District) 242.4 500

Irandaamsenkalpadai Tank (Vavuniya District) 23.4 25

Kollamaruthumadai Tank (Vavuniya District) 22.2 18

Illupaikulam Tank (Vauvnia District) 36.4 48

Kaluwaragaswewa Tank (Anuradhapura District) 14.1 50

Palugaswewa Tank (Anuradhapura District) 38.8 80

Aliyawatunuwewa (Anuradhapura District) 18.6 60

Yakawewa Tank (Anuradhapura District) 44.4 180

Kudakongaswewa Tank (Anuradhapura District) 34.3 130

Maradhamadu Tank (Mullaitivu District) 141.4 140

Udayarkattu Tank (Mullaitivu District) [Large Scheme]

517.1 606

ha = hectare. Source: Project Completion Report Consultant’s Field Study, 2014.

30. Paddy land owned by an individual farmer varied from 0.4 to 1.2 hectares (ha). However, actual land cultivated by farmers in a particular season depends on the volume of water that can be retained in their tank for irrigation. Farmers would cultivate less land when tanks are not filled to capacity. For example, farmers who cultivated paddy with water from the Thimilakulam tank in Mannar district last season cultivated only about 16 ha, compared to the tank’s about 40 ha of cultivable land.

b. Increased Cropping of Rehabilitated Schemes

31. The rehabilitation of small and medium tanks will not only provide a sufficient and stable supply of water for famers’ agricultural activities but also to increase their cultivation from one to two seasons per year. Almost all the farmers expressed hope that with adequate rainfall, tanks would provide water to cultivate their paddy fields in the maha season (September–March). Meanwhile, some farmers—using water from the Thimilakulam tank in Mannar district, the Irandaamsenkalpadai and Kollamaruthumadai tanks in Vavuniya district, and the Palugaswewa

46 Appendix 5

tank in Anuradhapura district—believed they would also be able to cultivate at least part of their paddy fields or some upland crops if the rehabilitated tanks retained sufficient water during the yala season (May–September). The Udayarkattu tank in Mullaitivu district provided water to farmers immediately after its rehabilitation in April 2014, enabling cultivation of their paddy lands in the yala season. However, they could cultivate only 122.4 ha (out of about 517 ha) because of the limited water available in the tank.

32. Tank rehabilitation will also contribute to an increase in paddy yields. Farmers who are dependent on the rehabilitated Maradhamadu tank in Mullaitivu district reported they would be able to increase paddy yields from 4,330 kilograms (kg) per ha to 6,060 kg per ha because of the stable water supply. However, several farmers expressed doubts about whether they could increase their cultivable area, because any expansion would be determined by the tank’s water-retention capacity. Another factor restraining expansion is the new boundary demarcations of the forestland, declared by the Forest Department immediately after the conflict’s end. This triggered the fencing off of part of the land farmers had been cultivating prior to their displacement. Another reason is the growing population of stray cattle that damages their crops.

c. Other Benefits of Scheme Rehabilitation

33. Farmers, as well as administrators from the departments of irrigation, perceived several other benefits from the irrigation scheme rehabilitation. Retaining water in the tanks increases the groundwater levels, which will minimize the risk of household drinking water wells drying out. Water will also be available for cattle and other domestic animal consumption. Furthermore, the rate of water loss through dilapidated distribution canals will be reduced. Previously, 10 acre-feet of water (12,334 cu m) was required to irrigate 1 acre of paddy. This has been reduced to 6 acre-feet (7,400 cu m) in the rehabilitated schemes, because of a reduction in conveyance losses from about 65% to 35%. This saved water can be used to irrigate additional land, as well as to increase the cropping intensity.

34. Another benefit is the opportunity for villagers to engage in alternate livelihoods, such as fishing. About 150 persons began fishing in the Maradhamadu tank (Mullaitivu district) immediately after its rehabilitation. However, the Maradhamadu farmer organization will regulate fishing, and people will be barred from fishing during the cultivation season. Also, a fee will be charged for fishing, and the money collected will be used to develop a new farmer organization.

d. Salt Water Exclusion Schemes

35. The salt water exclusion (SWE) scheme rehabilitation in Jaffna district has introduced similar benefits to the farming communities. During the conflict, the bunds built to prevent seawater incursion on to cultivable lands had been damaged. IDPs who returned to their homelands suffered immensely from not being able to cultivate their fields, because of the saline water presence that destroyed crops. As drinking water wells were contaminated with seawater, it was difficult for IDPs to find fresh drinking water. Many were hesitant to return to their home villages because they did not have access to safe drinking water. In the dry season, people had to buy water, at SLRs0.70 per liter. Several cattle as well as coconut trees died due to a lack of fresh water. Mandathievu farmers reported that their yields remained low (1,400 kg/acre; 3,500 kg/ha), primarily because of the water’s salinity levels. They hoped they would be able to increase their yields after the SWE scheme rehabilitation. The SWE schemes would also help to increase groundwater levels, retaining fresh drinking water in wells with reduced salinity.

e. Improvement of Agricultural Roads

36. Rehabilitation of agricultural or rural roads has provided villagers with easy access to their farmlands, as well as convenience in transporting their produce to nearby urban centers. In some instances, farmers began cultivating land adjoining the rehabilitated roads because it was

Appendix 5 47

easy for them to sell their produce to outside traders. Traders also buy agricultural produce directly from the farmers who live along the rehabilitated Ilippukanniya-Kalugollagama agricultural road in Anuradhapura district. These direct purchases have triggered cash savings for farmers, who otherwise had to pay SLRs5 per kg to transport their produce to the main road.

37. Because of the rehabilitated agricultural roads, several families have accumulated physical assets, such as farm tractors, three-wheeler taxis, and motorcycles. In Paleuruwa village (Vavuniya district), there are now three 4-wheel tractors, eight 2-wheel tractors and four 3-wheeler taxis, all purchased by villagers after the Avarathulawa-Paleuruwa agriculture road rehabilitation. The tractors are hired at SLRs7,500–SLRs8,000 per day, providing additional income to tractor-owning families.

2. Reconstruction of Administrative Offices (C.4)

a. Divisional Secretariats

38. The reconstructed divisional secretariat buildings visited in Madhu (Mannar district), Delft Island (Jaffna district), and Welioya (Mullaitivu district) have introduced enormous benefits to both service users and the secretariats’ administrative staff. The Madhu divisional secretariat serves a population of 12,744, over 17 grama niladhari divisions;2 the Deft Island secretariat administers a population of 5,000 in 6 divisions; and the Welioya secretariat covers a population of 11,000 in 9 divisions. The benefits accrued to both parties are similar across the three secretariats; these are reflected in the Madhu secretariat description in Box A5.

2 Village-level administrative units.

48 Appendix 5

Box A5: Benefits of the Reconstructed Madhu Divisional Secretariat

The secretariat’s second phase of construction included a conference hall that can accommodate about 500 persons and additional office space on the secretariat’s upper floor. Furthermore, the secretariat was provided with office furniture and equipment, including computers. During the war, the secretariat had been functioning from a temporary building in Tahmbanikulam, because the former secretariat was completely destroyed. Soon after the war, the secretariat’s ground floor was reconstructed using government funds, and the secretariat was reestablished in 2011. The secretariat has 78 employees, including 50 males and 28 females, and representing 64 Tamils, 11 Muslims, and 3 Sinhalese. Grama Niladharisare available for 14 out of the 17 grama niladhari divisions. Of the 14 grama niladharis, 6 are female.

The divisional secretariat serves 3,713 households, with a population of 12,744. This population includes about 51 families who earlier sought refuge in India before returning at the end of the war. The division’s households comprise 2,715 Tamils, 837 Muslims, and 165 Sinhalese. About 200 persons come to the secretariat daily, particularly on Mondays and Wednesdays. Due to the division’s poor gravel road conditions and limited transport services, villagers spend almost a full day to reach the secretariat, get their services completed, and return home.

Villagers are highly satisfied with the services provided, as all services are now provided under a single roof. Previously, people had to travel to Mannar town (40 km away) to obtain certain services, such as their national identity cards. This service is now provided within the secretariat premises. The secretariat has more staff than 2010 to provide services and a reception desk to help direct service users to the relevant officers. People who before had to wait under trees until their work was done are now provided with seating, as well as toilet facilities.

Staff members are also pleased with the new facilities, as they provide additional workspace and a conducive working environment. The furniture and computers contributed to increased work efficiency. The conference hall is extensively used for meetings, workshops, and training programs throughout the week. It is also used for staff meetings, divisional coordinating committee meetings, Samurdhi programs, and Indian Housing Program meetings. Prior to the hall’s construction, the secretariat did not have sufficient space to conduct weekly staff meetings; school buildings had to be used for such activities but were available only after 1:30 pm. The conference hall is also used by outside agencies, such as nongovernmental organizations and government agencies, to conduct their programs and activities.

One symbolic outcome of the improved working environment and efficiency was that in September 2014 the National Productivity Secretariat awarded the secretariat the Productivity Award for Year 2012-2013. This marked a historical milestone because it was the first time that a divisional secretariat in Mannar had received such an award.

The newly constructed upper floor accommodates the planning branch and the Samurdhi program unit. Some staff members felt the Samurdhi program unit should be shifted to the ground floor, because old and disabled persons who come for services find it difficult to climb the stairs. No access ramp has been constructed from the ground floor to the upper floor.

Grama Niladaris = Village-level administrators appointed by the government.

Appendix 5 49

b. Construction of Staff Quarters for Divisional Secretariats

39. The administrative staff, including the divisional secretaries, immensely benefitted from the staff quarters built and the furniture and equipment provided at the Madhu, Delft Island, and Vavuniya North divisional secretariats. Benefits for the staff included a remarkable cost savings, reduction in travel time, a convenient and secure living environment (particularly for those travelling long distances or from other districts), and reduced absenteeism. For example, almost half the staff in the Delft Island secretariat come from Jaffna peninsula cannot travel daily, as ferry services operate only twice a day (9:00 a.m. and 2:30 p.m.). Transfer requests from staff because of logistical difficulties have also reduced, due to the accommodation facilities provided. However, in all three divisional secretariats’ staff quarters, defects were observed, including toilet construction defects, leaking water supply lines, and poor maintenance. These issues need to be addressed without delay.

40. A majority of the Madhu divisional secretariat staff comes from Mannar and several other districts; only a few come from Madhu. The male staff quarters consist of eight bedrooms, occupied by 21 officers. (Similar quarters for female staff have been constructed using government funds, and are now occupied by 11 females, including eight Tamils, two Muslims, and one Sinhalese). Although the room space is not sufficient to accommodate three people, officers are content with the facility because they do not have any alternate arrangement. Since all area residents are IDPs, who have returned recently and are re-constructing their houses, they are unable to provide accommodation to outsiders. Even if they provided lodging, they would charge high rentals, which the officers, most of whom are newly recruited, may not be able to afford. It was reported that some officers from other districts used to sleep in the secretariat, because they could not find alternative accommodation until staff quarters were built.

41. There are no particular selection criteria in providing accommodation to staff; the facility has been available on a ‘first-come-first-serve’ basis. The monthly rental for a single room is SLRs250 (SLRs62 per person in Delft Island), plus another SLRs200–SLRs300 for electricity, which is shared among room occupants. The divisional secretariat provides general maintenance for the quarters.

42. Officers from all the three ethnic communities—Tamil, Muslim, and Sinhalese—occupy quarters. Occupants also include both those married and unmarried. Despite their different ethnicities, officers co-exist well in the quarters, and during the field visit reviewers observed enthusiasm by officers to learn each other’s languages. Another staff quarter advantage is the resulting significant reduction in transport costs, particularly for officers who travelled from Mannar Island or Vavuniya, spending about SLRs200–SLRs300 per day.

43. The Vavuniya North divisional secretariat serves 20 grama niladhari divisions, 3,975 households, and a population of 13,398 (2012). The secretariat staff number 120, including eight Sinhalese. The Conflict-Affected Region Emergency Project (CAREP) supported the construction of two staff quarters (one for males and one for females), with 10 rooms each, and provided furniture and equipment. Eighteen employees occupy the female quarters (including five Sinhalese), and nine employees live in the male quarters (including one Sinhalese). Accommodation priority has been given to staff members who come from distant districts, such as Anuradhapura, Batticaloa, Nuwara Eliya, Jaffna, and Trincomalee. Those from outside districts number 13 in the male quarters and 7 in the female quarters.

44. Each occupant is charged a monthly rental of SLRs250. The monthly electricity bill is shared among occupants; a single occupant may pay SLRs300 per month. Their monthly accommodation and food cost is SLRs3,000–SLRs4,000. Both male and female occupants appreciate the accommodation, because outside boarding facilities with meals are expensive

50 Appendix 5

(about SLRs10,000 a month per person). Prior to the staff quarter construction, female staff from distant areas occupied the Samurdhi Office in the secretariat, and male staff stayed in part of the divisional secretary’s quarters.

D. Output D: Improved Legal Infrastructure (D.1)

1. Construction of the Mallakam Court Complex

45. The Mallakam district or magistrate court serves people in eight police jurisdictions and five divisional secretariat divisions, with an estimated population of 254,246. This population represents mostly Tamils, with a minority of Sinhalese, Muslims, and others. In 2013, 5,329 cases had been filed with the Mallakam court, of which 3,974 were concluded.3 The district judge or magistrate manages court cases from four police station areas, whereas the additional magistrate handles cases from the remaining four.

46. The new Mallakam court complex is a spacious, two-level building, for which the project provided the necessary furniture and computers. About 40 staff members, of whom 50% are female, work in the court. They are satisfied with the working environment and facilities provided. They observed that the number of court cases concluded has increased since moving to the new complex; previously, the court had to limit the number of cases called for hearing because the courtroom did not have space to accommodate many people. The number of court cases filed for judicial ruling has also increased. This shows that the new infrastructure has benefitted the general public seeking legal assistance. People can get redress for their grievances within a reasonable timeframe, and the court has increased capacity to accommodate cases submitted for inquiry and judgment.

47. The court also offers a waiting area for the public, with toilet facilities. Furthermore, it has established a family counseling unit for clients who are referred by judges for consultations. The incumbent judge has also initiated developing a greener environment around the court complex, and several trees have been planted.

IV. GENDER OUTCOMES

48. This section discusses the project’s gender outcomes, particularly regarding women’s benefits and access to resources and opportunities.

1. Benefits of Irrigation and Road Rehabilitation

49. The rehabilitation of small and minor irrigation schemes has enormously benefitted farmer communities, particularly returning IDPs. The farmers, the majority of whom are men, will be able to recommence agricultural activities, which had been abandoned for several years. Farmers will be able to prevent their crops from being destroyed by seawater, increase their yields and productivity, and potentially achieve a second cycle of cultivation or upland crop cultivation, if sufficient water is available in the rehabilitated tanks. In Sri Lankan culture, rural women are an integral part of agricultural activities and make equal contributions to their male counterparts in cultivation.

50. Increased yields and farm family incomes would benefit men, women, and children. Increased incomes will ensure household food security and adequate cash for women to manage household needs. Women-headed households will also benefit from water availability, allowing them to cultivate their lands (with support of extended family members) or lease them

3 Government of Sri Lanka, Ministry of Justice. 2014. Borrower’s Project Completion Report: Conflict Affected Region

Emergency Project – Component D [Legal Infrastructure], Colombo.

Appendix 5 51

to other farmers. It was reported (in Udayarkattu) that paddy fields are leased out for SLRs5,000 an acre during the maha season and SLRs4,000 an acre during the yala season. There were 5–20 women-headed households around the rehabilitated tanks. Women would also benefit from the SWE bund reconstruction that will prevent seawater intrusion. This will enable women in Mandathievu and Karinagar (Jaffna district) to restart net fishing activities in shallow seas, providing supplementary incomes. It was also reported that 20 out of 150 fishers in the Maradhamadu tank are (Mullaitivu district) are women. If the rehabilitated tanks and SWE schemes contribute to increasing and retaining ground water and lowering salinity levels, many women aspire to do home gardening and animal husbandry, to use the products for household consumption and securing supplementary family incomes.

51. The rehabilitation and reconstruction of road networks from the village roads to the national roads have introduced equal benefits to both men and women. Improved road conditions, together with improved transportation, have contributed to increased travel convenience and a reduction in travel time and costs. The works have also triggered many economic and financial benefits to men and women, such as improved trade relations, direct marketing and decreased dependency on middlemen traders, and increased investments in economic ventures, such as groceries and tea kiosks along the rehabilitated roads.

52. Several women began carrying vegetables and fruits grown in their home gardens to the roadside to sell to traders or other road users. The groceries and tea kiosks that emerged after the Kadawathgama-Vedithibbagala-Nagadaranawa road rehabilitation (Anuradhapura district) are mostly managed by women, while their husbands are in the fields or employed elsewhere.

53. Women engaged in cattle rearing in villages along the Palammodai-Moonrumuripu road (Vavuniya district) started carrying milk on bicycles to the collecting centers operated by Nestle Company. Women also benefitted from improved transportation services along the Mantahi-Parappukadanthai road (Mannar district), including (i) women employed in garment factories, (ii) women who work on fish cleaning and cutting at landing sites, (iii) women who accompany children to school, and (iv) girls who work in Jaffna textile shops, who can now work until late evening and return in the dark without fear. In all communities, women commented on the increased convenience for pregnant mothers traveling to maternity clinics, because of the better road conditions and improved transport services.

2. Benefits of Construction Work

54. During the road construction, women were engaged along with men in manual labor. However, daily wages paid to women were lower than those paid to men. Wage disparities were attributed to women being entrusted with less heavy work and given less working time. In some situations, women were allowed to return home around 2:00 p.m, as they had to attend their children returning from school., whereas men worked until 4:30 p.m. or longer. Overall, participation by women in road construction work was comparatively lower than by men.

55. In Muslim communities, women were prevented from engaging in outdoor work or working alongside men, primarily because of cultural taboos. In Tamil communities, too, women were hesitant to work with men and work outdoors because they feared being stigmatized. However, Tamil women from poor families engaged in construction-related labor work as they had little other economic support for survival. It has also been reported that unskilled female laborers participated in construction work of the national roads.4

4 ADB. 2012. Aide Memoire of the Midterm Review Mission, July–August 2012, Manila.

52 Appendix 5

3. Benefits of Divisional Secretariat Quarters

56. Both male and female administrative staff benefitted from the newly constructed divisional secretariats in Madhu, Delft Island, Welioya, and Vavuniya North, from better working environment and the facilities provided. Similarly, both male and female service users benefitted equally from the new facilities, such as dedicated public areas with comfortable seating, toilet facilities, and canteens for meals or refreshments. The separate male and female staff quarters provided at the Madhu, Delft Island, and Vavuniya North divisional secretariats benefited males and females equally. The accommodation facilities contributed to a significant reduction in costs incurred by male and female staff members. They also provided a secure environment for staff, particularly female staff from other districts who were in an unfamiliar environment.

4. Benefits of Improved Utilities

57. Both men and women will benefit equally from the new Point Pedro water scheme, which provides a regular supply of safe drinking water, and reduces costs by eliminating the need to purchase drinking water from private suppliers. An added benefit to women, who are engaged in collecting water from distant areas, is that they save energy and time spent travelling, waiting in queues, and carrying water home. Women also aspire to do home gardening and animal husbandry, now that more water is available. The produce from these would provide a food source for family consumption and income for women.

58. The improved electricity supply in Jaffna will also benefit men and women. Households newly connected to water mains will have reduced costs for kerosene and other alternate energy sources they have been using for lighting and other purposes. Other benefits include better lighting, reduced vulnerability to accidents from kerosene lamps, cleaner home environments, and improved access to information and entertainment through television. Women will be able to use household electric appliances for cooking and other household needs, saving time and energy. Children will have better lighting for their studies and the ability to use computers. Both men and women will also be able to engage in new economic activities.

5. Benefits of New Legal Infrastructure

59. It is reported that female lawyers in the Northern Province had been consulted in the design stage of the Mallakam court complex (foot note 5). Furthermore, the new courthouse provides separate cells to retain male and female remand prisoners, separate toilets for men and women, and a separate room for lactating mothers to feed their infants. The court also uses a female police officer to carry out body-checks on females entering the courthouse.

V. ENVIRONMENTAL OUTCOMES

60. Initial environmental examinations had been conducted for the proposed provincial council roads (2011)5 and urban council roads (2010)6 in Northern Province and municipal council roads in Jaffna (2010).7 These assessments observed that the proposed subprojects did not have any expected adverse impacts on endemic or protected species, or on conservation areas declared by the departments of wildlife and forests. Since most of the road projects involved rehabilitation and upgrading, using the existing right of way or vacant state land, the assessments did not anticipate any land acquisitions or population. However, the environmental

5 Government of Sri Lanka. 2011. Initial Environmental Examination Report for the Rehabilitation of Damaged

Provincial Roads in Northern Province. Colombo. 6 Government of Sri Lanka. 2010. Initial Environmental Examination Report for the Rehabilitation of Damaged Urban

Council Roads in Northern Province. Colombo. 7 Government of Sri Lanka. 2010. Initial Environmental Examination Report for the Rehabilitation of Damaged

Municipal Council Roads in Jaffna. Colombo.

Appendix 5 53

assessments pointed to short-term environmental impacts during road project civil works from dust, noise and vibration, soil and solid waste disposal, quarry site operation, crusher plants, asphalt plants, and construction material and waste transportation. The initial environmental examinations proposed several measures to mitigate or minimize these impacts, including an environmental monitoring plan to be executed by the contractors and implementing agencies.

61. Contractors’ compliance with these safeguard measures were closely monitored by the implementing agencies and supervision consultants and during ADB’s review missions. ADB’s midterm review mission on the construction of national roads notes: “No major environmental safeguards issues were observed. All necessary statutory clearances such as the Environmental Protection License and Industrial Mining Licenses have been obtained for the project and are valid. Implementation and monitoring of the Environmental Management Plan has been progressing regularly” 8 Communities reported few grievances on adverse environmental impacts during the construction period.

62. Rehabilitation of small and medium irrigation schemes and the tank irrigation cascade systems mostly involved restoring sluice gates, spillways, feeder canals, and tank bunds. No major long-term environmental threats arising from such works were observed. De-silting of tanks was carried out only for a few tanks and, in such instances, appropriate measures were taken to dump the removed soil on vacant ground far from the tanks, paddy fields, and settlements.

63. The divisional secretariats and staff quarters, Mallakkam court complex, and water pump station in Vallipuram were all constructed on vacant, state-owned land. The construction of the 132 kV transmission line from Kilinochchi to Chunnakkam used the existing right of way. Transmission and distribution pipelines of the Point Pedro water scheme were laid underground. Therefore, none of these projects caused any major environmental hazards.

64. Meanwhile, several positive environmental impacts arose from project interventions. Restoration of irrigation schemes, including SWE schemes, directly contributed to vegetation growth, an increase in groundwater, and safe drinking water access. The rehabilitation of road networks helped control dust and air pollution and prevent water logging during rainy season.

VI. SOCIAL SAFEGUARDS

1. Population Displacements

65. The implementation infrastructure subprojects did not lead to any physical or economic and permanent or temporary displacement of populations. Rehabilitation, such as for roads and the Kilinochchi-Chunnakam electricity link, used the existing right of way, and thus did not require any land acquisitions. Other structures were built along vacant state land, paddy fields, or areas where there were minimal-to-no settlements. For subprojects such as the construction of administrative offices and staff quarters, state-owned vacant land was used. Therefore, there was no necessity to introduce any safeguard instruments to minimize, mitigate, or compensate for impacts arising from population displacements.9

2. Community Involvement

66. Subproject implementation started alongside the return of IDPs to their homelands. In this context, IDPs were preoccupied with clearing their homesteads and constructing temporary

8 ADB. 2012. Aide Memoire of the Midterm Review Mission, July–August 2012. Manila. 9 ADB. 2010. Project Administration Manual for Democratic Socialist Republic of Sri Lanka: Conflict-Affected Region

Emergency Project. Manila.

54 Appendix 5

shelters. Many IDPs had left their families behind in the refugee camps until their lands were cleared and shelters built. Community-based organizations were non-existent.

67. Conducting consultations with communities to elicit views, suggestions, and information was therefore difficult for the implementing agencies and the design and supervision consultants, such as Central Engineering Consultancy Bureau. However, the agencies and consultants made an effort to consult farmers, particularly on the rehabilitation of small and minor irrigation schemes, and to incorporate their suggestions into the technical designs. Later, both implementing agencies and the consultants gradually succeeded in mobilizing the farmers and their organizations to participate in consultations, as well as civil construction work monitoring. Some communities in Anuradhapura and Mullaitivu districts complained that the implementing agencies and consultants did not consult the farmer organizations on tank rehabilitation designs, which had led to several construction-related defects.

3. Grievance Redress

68. The project administration manual prescribed that implementing agencies establish grievance redress committees for each project output. Though it has been reported that the committees were formed (three each in Mannar and Vavuniya districts) to handle environmental and social complaints, 10 some communities were unaware of such grievance redress mechanisms. In situations where contractors or subcontractors defaulted on paying laborers or for hired tractors, affected parties did not know what course of action to follow.

4. Gender Sensitivity

69. No formal gender action plan had been introduced to ensure women’s participation and benefit sharing. However, several gender design features had been included in each output. Implementing agencies were to ensure equal benefits and facilities to both men and women.

70. Special gender-responsive measures had been incorporated into some project designs, such as the Mallakam courthouse, where separate cells for female prisoners, separate toilets for women, and child-feeding facilities for lactating mothers were provided. In staff quarter construction, the project ensured provision of facilities for both male and female staff. When the Madhu divisional secretariat constructed female staff quarters, using government funds, the project provided resources to construct male staff quarters.

5. Safeguard Compliance

71. Contractor compliance with safeguard measures, particularly on environmental and safety issues, were closely monitored by the implementing agencies and supervision consultants, and during ADB’s review missions. One review mission11 pointed out that in the construction of the Mallakam courthouse “safety measures at construction were not up to the expected standard.” For instance, there were no warning tapes erected at dangerous places, and laborers were not wearing helmets and boots. The supervision consultants (Central Engineering Consultancy Bureau) were responsible for preparing and submitting annual environmental monitoring reports on road sector projects to the Northern Province Road Development Authority and ADB.

VII. CONCLUSIONS

72. Overall, project interventions and their associated investments have significantly contributed to the restoration and improvement of many infrastructure and utility services in the

10 ADB. 2012. Aide Memoire of Review Mission (23 April–4 May 2012). Manila. 11 ADB. 2012. Aide Memoire of Review Mission (12–23 November 2012). Manila

Appendix 5 55

conflict-affected Northern Province, Eastern Province, and some parts of the North Central Province (NCP). These interventions, in turn, have generated significant social changes for returning IDPs and other affected communities, including (i) increased mobility, (ii) restored livelihoods and improved income levels, (iii) improved connectivity to urban markets and service centers, (iv) improved facilities to meet basic needs, and (v) increased access to administrative and justice services. In the long term, interventions will support the consolidation of livelihood activities for IDPs and other affected communities, create sustainable employment opportunities, and reduce poverty levels among affected communities

73. Project interventions have benefitted men and women, as well as those belonging to the three major ethnic communities. Some Northern Province districts are predominantly Tamil, while districts such as Mannar and Vavuniya comprise mixed communities of Tamils and Muslims, with a Sinhalese minority. In Anuradhapura district, interventions were largely confined to Sinhalese communities. Interactions that began to develop among different ethnic communities, such as through trade and among administrative staff sharing the same staff quarters, will gradually lead to better mutual understanding of cultures and languages, aiding reconciliation. Interventions were gender sensitive, and several gender-responsive features were incorporated into project designs and implementation processes, to address women’s needs.

74. The project’s four major outputs did not lead to any physical or economic displacement or resettlement of communities. There were no adverse environmental impacts, except for some minor impacts during civil works. Safeguard measures had been adopted to mitigate or minimize such temporary impacts. Social safeguards had been built into project designs and implementation processes but required further strengthening for community consultations and information disclosure, implementation of grievance redress mechanisms, and monitoring of safeguard compliance.

56 Appendix 6

DETAILED COST TABLE BY FINANCER AND CATEGORY

I. Investment Costs

A. Civil Works 26.79 3.21 13.84 1.66 10.71 1.29 1.34 0.16 59.00 23.29 2.79 3.50 0.42 30.00 13.50 1.62 2.00 0.24 6.00 0.72 3.40 0.41 27.89 5.40 0.65 6.05 - - 109.77 13.17 122.94

B. Equipment and Furniture - - 0.45 0.05 - - - - 0.50 - - 1.50 0.18 1.68 0.40 0.05 - - 1.00 0.12 3.00 0.36 4.93 0.75 0.09 0.84 - - 7.10 0.85 7.95

C. Consultants - - - - -

Design and Supervision 1.79 0.21 2.68 0.32 - - - - 5.00 - - 0.27 0.03 0.30 0.09 0.01 - - 0.22 0.03 0.18 0.02 0.55 0.45 0.05 0.50 - - 5.67 0.68 6.35

-

Total Investment Costs 28.57 3.43 16.96 2.04 10.71 1.29 1.34 0.16 64.50 23.29 2.79 5.27 0.63 31.98 13.99 1.68 2.00 0.24 7.22 0.87 6.58 0.79 33.37 6.60 0.79 7.39 - - 122.53 14.70 137.24

II. Recurrent Costs -

Incremental 0.27 0.03 0.45 0.05 - - 0.18 0.02 1.000 - 0.61 0.267 0.03 0.91 0.36 0.04 0.09 0.011 0.27 0.03 0.179 0.021 1.000 0.357 0.043 0.400 - - 2.409 0.90 3.313

Project Management -PCQAU - - - - - - - - - - - - - - - - - - 1.00 0.12 1.00 0.12 1.12

Total Recurrent Costs 0.27 0.03 0.45 0.05 - - 0.18 0.02 1.00 - 0.61 0.27 0.03 0.91 0.36 0.04 0.09 0.01 0.27 0.03 0.18 0.02 1.00 0.36 0.04 0.40 1.00 0.12 3.41 1.02 4.43

Total Base Costs 28.84 3.46 17.41 2.09 10.71 1.29 1.52 0.18 65.50 23.29 3.41 5.53 0.66 32.90 14.35 1.72 2.09 0.25 7.49 0.90 6.76 0.81 34.37 6.95 0.83 7.79 1.00 0.12 125.94 15.73 141.67

Physical Contingencies 2.88 0.35 1.74 0.21 1.07 0.13 0.15 0.02 6.55 2.33 0.34 0.55 0.07 3.29 1.43 0.17 0.21 0.03 0.75 0.09 0.68 0.08 3.44 0.70 0.08 0.78 0.10 0.01 12.59 1.57 14.17

Price Contingencies 1.44 0.17 0.87 0.10 0.54 0.06 0.08 0.01 3.28 2.33 0.34 0.28 0.03 2.98 0.72 0.09 0.10 0.01 0.37 0.04 0.34 0.04 1.72 0.31 0.04 0.35 - - 7.37 0.95 8.32

-

III. Financing Charges -

During Implementation 0.93 - 0.56 - 0.35 - 0.05 - 1.89 0.77 - 0.18 - 0.95 0.46 - 0.07 - 0.24 0.22 - 0.99 0.22 - 0.22 0.03 - 4.08 - 4.08

Total Project Costs 34.10 3.98 20.58 2.40 12.67 1.48 1.79 0.21 77.21 28.72 4.09 6.54 0.76 40.11 16.96 1.98 2.47 0.29 8.86 1.03 7.99 0.93 40.51 8.18 0.96 9.14 1.13 0.13 149.99 18.25 168.24

I. Investment Costs

A. Civil Works 29.67 2.71 25.31 2.37 1.19 0.14 61.39 12.52 1.55 6.84 1.40 0.85 23.16 25.05 1.77 5.91 0.64 10.45 0.41 7.96 0.68 52.87 4.05 0.50 4.55 128.95 11.61 141.97

B. Equipment and Furniture - 0.49 0.04 0.53 1.98 0.24 2.22 0.05 0.00 0.66 0.00 0.71 0.79 0.10 0.89 3.96 0.39 4.35

C. Consultants - - - - -

Design and Supervision 1.60 0.15 0.18 1.94 0.06 0.01 0.06 0.01 0.08 0.02 0.03 0.13 0.00 0.00 0.00 1.67 0.47 2.14

- - - -

Total Investment Costs 31.27 2.87 25.79 2.60 - - 1.19 0.14 63.86 12.52 1.55 8.87 1.40 1.10 25.44 25.12 1.84 5.91 0.65 10.45 0.41 8.61 0.71 53.71 4.84 0.60 5.44 - - 134.58 12.47 148.45

II. Recurrent Costs - -

Incremental 0.43 0.04 0.41 0.04 0.12 0.01 1.05 0.34 0.04 0.37 0.24 0.02 0.08 0.01 0.09 0.01 0.45 0.09 0.01 0.10 - 1.80 0.18 1.98

Project Management -PCQAU - - - - - 0.42 0.04 0.42 0.04 0.46

Total Recurrent Costs 0.43 0.04 0.41 0.04 - - 0.12 0.01 1.05 - - 0.34 - 0.04 0.37 0.24 0.02 0.08 0.01 - - 0.09 0.01 0.45 0.09 0.01 0.10 0.42 0.04 2.22 0.22 2.44

Total Base Costs 31.71 2.90 26.20 2.64 - - 1.31 0.16 64.91 12.52 1.55 9.21 1.40 1.14 25.82 25.35 1.87 5.99 0.66 10.45 0.41 8.70 0.72 54.16 4.93 0.61 5.54 0.42 0.04 136.81 12.69 150.90

Physical Contingencies

Price Contingencies

III. Financing Charges

During Implementation 0.31 - 0.26 0.01 - 0.588 0.13 - 0.11 - - 0.23 0.25 - 0.06 - 0.10 - 0.09 - 0.405 0.05 - 0.05 0.00 - 1.37 1.37

Total Project Costs 32.02 2.90 26.46 2.64 - - 1.32 0.16 65.50 12.65 1.55 9.32 1.40 1.14 26.05 25.60 1.87 6.05 0.66 10.55 0.41 8.79 0.72 54.16 4.98 0.61 5.54 0.43 0.04 138.17 12.69 152.26

Original

ADB GOSL ADB GOSL ADB GOSL

National Provincial Municipal Pradeshiya

ADB GOSL ADB GOSL

Component A Component B Component D

NP NCP

Total

Power

Project

Management

Total ADB GOSL Total

TotalGOSLIFRC GOSL ADB GOSLADB GOSL

ADBADB GOSL

Admistrative

Infratructure

ADB GOSL

Vocation

Traning

Component C

GOSL

Actual

ADB

ADB GOSL GOSLADB

National

Provincial/

MunicpalNP

Irrigation

Small tanks by

PCQUA

ADB GOSLADB GOSL ADB

NCP

Total

Power Water

GOSL GOSL ADBADB

NCP

Total ADB

Water

Total

Irrigation

ADB GOSL

NP NCP

ADB GOSL GOSL

Total

ADB GOSL Total

Local Athority Pradeshiya

TotalComponent A Component C Component D

Project Mgt

38.08 22.99 14.15 2.00 32.81 7.31 18.94 2.76 9.89 8.92 9.14 1.26

Component B

GOSLADB

NP

Admistrative

Infratructure

TotalADB GOSL Total ADBGOSL

ADB = Asian Development Bank, GOSL = Government of Sri Lanka, IFRC = International Federation of the Red Cross and Red Crescent Societies , NCP = North Central Province , NP = Northern Province, PCQAU = Project Coordination and Quality Assurance Unit Source: ADB. 2010. Project Administration Manual for Democratic Socialist Republic of Sri Lanka: Conflict-Affected Region Emergency Project. Manila, Borrower’s Completion report

Appendix 7 57

IMPLEMENTATION AND MANAGEMENT ARRANGEMENTS

A. Proposed Management Arrangements

1. The management structure proposed at design is shown in Figure A7.1.

Figure A7.1: Proposed Overall Project Management Structure

ERD/Ministry of Finance

CEB = Ceylon Electricity Board, ERD = External Resources Department, MOHEH = Ministry of Higher Education and Highways, MOP = Ministry of Power and Energy, MOVT = Ministry of Vocational and Technical Training, MOW = Ministry of Water Supply and Drainage, NCP = North Central Province, NPC = Northern Provincial Council, NWSDB = National Water and Drainage Board, RDA = Road Development Authority, RDD = Road Development Department, VTA = Vocational Training Authority. Source: Asian Development Bank. 2010. Democratic Socialist Republic of Sri Lanka: Conflict-Affected Region Emergency Project: Project Administration Manual. Manila.

B. Actual Management Structure

2. Figure A7.2 shows the management structure adopted during the project.

58 Appendix 7

Figure A7.2: Actual Management and Implementation Structure

ERD/Ministry of Finance

CEB = Ceylon Electricity Board, ERD = External Resources Department, MOHEH = Ministry of Higher Education and Highways, MOP = Ministry of Power and Energy, MOW = Ministry of Water Supply and Drainage, NCP = North Central Province, NPC = Northern Provincial Council, NWSDB = National Water and Drainage Board, RDA = Road Development Authority. Source: Project Completion Review Mission based on Executive Agency Reports.

Appendix 8 59

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Description Reference in Loan/Project Agreement

Compliance

Particular Covenants

The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound applicable technical, financial, business, and development practices.

Article IV section 4.01 (a)

Complied with.

In the carrying out of the Project and operation of the Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 5 to this Loan Agreement.

Article IV section 4.01 (b)

Complied with.

The Borrower shall make available, promptly as needed and on terms and conditions acceptable to ADB, the funds, facilities, services, land and other resources, as required, in addition to the proceeds of the Loan, for the carrying out of the Project and for the operation and maintenance of the Project facilities.

Article IV section 4.02

Complied with.

In the carrying out of the project, the borrower shall cause competent and qualified consultants and Contractors, acceptable to ADB, to be employed to an extent and upon terms and conditions satisfactory to the borrower and ADB.


Complied with.

The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to ADB. The borrower shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request.


Complied with.

The borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.


Complied with.

The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 6 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors’ opinion on the use of the Loan proceeds and compliance with the financial covenants of this Loan Agreement as well as on the use of the procedures for imprest accounts and statement of expenditures), all in the English


Partially complied with. The borrower was unable to submit annual audited financial statements within 6 months after the end of the related fiscal year.

60 Appendix 8


Compliance

language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time request.

The Borrower shall be enable ADB, upon ADB’s request, to discuss the Borrower’s financial statements for the Project and its financial affairs related to the Project from time to time with the auditors appointed by the Borrower pursuant to Section 4.05 (a) hereinabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower and the Project Executing Agency, unless the Borrower shall otherwise agree.


Complied with.

The Borrower shall enable ADB’s representatives to inspect the Project, the Goods and Works, and any relevant records and documents. Section


Complied with.

The borrower shall ensure that the project facilities are operated, maintained and repaired in accordance with sound applicable technical, financial, business, development, operational and maintenance practices.


Complied with.

The Borrower shall exercise it's rights under the Subsidiary Financing Agreement and the Subsidiary Loan Agreement in such a manner as to protect the interest of the Borrower and ADB and to accomplish the Loan.


Complied with.

No rights or obligations under the Subsidiary Financing Agreement or the Subsidiary Loan Agreement shall be assigned, amended, or waved without the prior concurrence of ADB.


Complied with.

Execution of Project and Operation of Project Facilities

The Borrower and the Project Executing Agency shall ensure that the Project is implemented in accordance with the detailed arrangements set forth in the PAM. Any subsequent change to the PAM shall become effective only after approval of such change by the Borrower and ADB. In the event of any discrepancy between the PAM and this Loan Agreement, the provisions of this Loan Agreement shall prevail.

Schedule 5, para 1

Complied with.

Within 30 days from the Effective Date, the Borrower shall ensure that (i) the Project Executive Agency establishes the Project coordination and quality assurance unit; and (ii) each Implementing Agency establishes a Project implementation unit. The Borrower shall also ensure that such units are provided adequate number of well qualified, experienced and dedicated staff, resources and facilities for implementation of the Project which are maintained until the completion of the Project.

Schedule 5, para 2

Complied with.

The Borrower shall ensure, and cause the Project Schedule 5, Complied with.

Appendix 8 61


Compliance

Executing Agency and Implementing Agencies to ensure, that the Subprojects are selected in accordance with the agreed criteria described in the PAM, and are implemented in a manner satisfactory to ADB.

para 3

The Borrower shall take all appropriate measures to ensure that the Subprojects contribute to minimizing social tension, and in the event that any Subproject has or is expected to have a negative impact, the Borrower and ADB, in coordination with the district committees, will jointly determine whether to continue, redesign, suspend, or cancel such Subproject.

Schedule 5, para 4

Complied with.

The Borrower shall ensure, and cause the Project Executing Agency and the Implementing Agencies to ensure, that civil society organizations and the beneficiaries are involved in the selection, design, implementation, and monitoring of the Subprojects.

Schedule 5, para 5

Complied with.

The Borrower shall ensure, and cause to be ensured, that (a) ADB and the Project staff, contractors, and consultants have a reasonable and safe access to the Subproject areas; (b) free and open consultations are facilitated with the affected people returning to the Subproject areas; and (c) there is unhindered movement of materials, vehicles, equipment and other items required for Project implementation to the Subproject areas.

Schedule 5, para 6

Complied with.

The Borrower shall ensure, and cause the Project Executing Agency and Implementing Agencies to ensure, that the facilities provided under the Project are operated and maintained, and that adequate budgetary and other resources are provided for this purpose.

Schedule 5, para 8

Complied with.

The Borrower shall cause its Auditor-General’s department to conduct annual performance audits during Project implementation to determine the utilization of the Project funds and also the extent to which Project objectives have been achieved. The Borrower shall also ensure that a special post completion performance audit is conducted to evaluate governance, transparency, and financial accountability under the Project.

Schedule 5, para 9

Complied with.

The Borrower, the Project Executing Agency, and the Implementing Agencies, shall comply with ADB’s Anticorruption Policy (1998, as amended to date), and cooperate fully with any investigation by ADB and extend all necessary assistance, including providing access to all relevant books and records for the satisfactory completion of such investigation.

Schedule 5, para 10

Complied with.

The Project Executing Agency and the Implementing Agencies shall ensure that the anticorruption provisions acceptable to ADB are included in all bidding documents and contract, including provisions specifying the right of ADB to audit and examine the records and accounts of the executing and implementing agencies and all contractors,

Schedule 5, para 11

Complied with.

62 Appendix 8


Compliance

suppliers, consultants, and other service providers as they relate to the Project.

The Borrower shall allow and facilitate ADB’s representatives to conduct spot and random checks on (a) flow of funds through all the imprest accounts, and their use for the Project in accordance with the Loan Agreement; (b) work-in progress; and (c) Project implementation.

Schedule 5, para 12

Complied with.

The Borrower shall cause the Project Executing Agency to establish an internet web-site that describes the Project, the administration of funds, and status of procurement and award of contracts; and shall also have such information published in local newspapers in Sinhala, Tamil and English.

Schedule 5, para 13

Complied with.

Financial

a) The Borrower shall make the necessary budgetary allocations and establish procedures for expeditiously channeling the Loan proceeds to the Implementing Agencies.

b) The Borrower shall make available all counterpart funds required for timely and effective implementation of the Project, including any funds required to make land available for the Project, to mitigate unforeseen environmental and social impacts and to meet additional costs arising from design changes, price escalation in construction costs or other unforeseen circumstances.

Schedule 5, para 7

Complied with.

Safeguards

The borrower shall ensure, and cause the Project Executing Agency and Implementing agencies to ensure, that before any sub project is approved for financing;

a) the Subproject is screened to determine any potential environmental impacts and risks, and their significance;

b) if an environment impact assessment or initial environmental examination is required for any sub project pursuant to the EARF, the relevant implementing agency conducts an environmental impact assessment of initial environmental examination and prepares an environmental management plan for such sub project.

c) such environmental impact assessment or initial environmental examination and environmental management plan is approved by the CEA, as applicable, endorsed by the Borrower, and cleared by ADB.

Schedule 5, para 14.

Complied with.

The borrower shall ensure, and cause the project executing agency and implementing agencies to ensure, that:

Schedule 5, para 15.

Complied with.

Appendix 8 63


Compliance

a) the Subprojects are designed, constructed, implemented, operated, and maintained in accordance with the Borrower’s applicable laws and regulations and ADB’s Safeguard Policy;

b) the environmental management plan is implemented in accordance with it's terms so that all adverse environmental impacts during construction and operation of the sub projects are mitigated; and in the event of any unanticipated adverse environmental impacts; such impacts are reported to CEA, as applicable and ADB, and remedial actions taken to mitigate the impacts in consultation with the affected persons, CEA as applicable and ADB.

c) an additional environmental study is undertaken and corresponding approval from the CEA, as applicable, is obtained should there be changes in Subproject design that have significant environmental impacts;

d) the environmental impact assessment or the initial environmental examination and the environmental management plan are updated, as necessary, during the course of Subproject implementation, and submitted to ADB for approval;

e) reports are submitted to ADB on a Quarterly basis on the implementation of environmental management plan.

f) (i) all the contractors are provided with the environmental impact assessment or the initial environmental examination and the environmental management plan, and that the contractors implement the required mitigation measures as described in the environmental management plan in a satisfactory manner, and report the implementation of the environmental management plan on a regular basis, along with any deviation therefrom; (ii) the bidding documents include the requirement to comply with the environmental management plan; and (iii) compliance by the contractors with the environmental management plan is closely monitored .

The Borrower shall ensure, and cause the project Executing Agencies to ensure that to the extent possible, the Subprojects shall avoid land acquisition or involuntary resettlement, and that before any Subproject is approved for financing:

a) the Subproject screened to determine any potential involuntary resettlement impacts and risks and their significance;

b) in the event any land acquisition or resettlement becomes necessary, or any potential impact on

Schedule 5, para 16

Complied with.

64 Appendix 8


Compliance

indigenous peoples is identified, the relevant Implementing Agency prepares a resettlement plan for such Subproject in accordance with the RF;

c) such resettlement plan is endorsed by the Borrower, cleared by ADB, and if necessary, approved by any other relevant government agency;

And that in such event there is no commencement of civil works in respect of such Subproject until all affected people are fully compensated prior to their economic displacement, and relocated (or compensated at least prior to the initiation of the relocation process) or physically displaced, in accordance with the resettlement plan formulated following the approved RF.

The Borrower shall ensure, and cause the Project Executing Agency and Implementing Agencies to ensure, that all land and all-rights-of way required for the Project, each Subproject, and associated facilities are made available to the Works contractor in accordance with the schedule agreed under the related Works contract, subject to compliance with and implementation and monitoring of all land acquisition and resettlement activities with:

(a) all applicable national, provincial and local laws and regulations relating to land acquisition, and involuntary resettlement;

(b) ADB’s Safeguard Policy; (c) the RF; and

(d) the relevant resettlement plan, any updated resettlement plan, and any corrective or preventive actions set forth in a land acquisition and resettlement monitoring plan.

Schedule 5, para 17

Complied with.

The Borrower shall cause the Project Executing Agency and Implementing Agencies to:

a) conduct quarterly monitoring and review of the implementation of each resettlement plan;

b) engage an external expert with the qualifications and experience, acceptable to ADB to verify information produced through the monitoring process;

c) appoint a member of its management or qualified staff to have overall responsibility for environmental and social matters;

d) provide a land acquisition and resettlement monitoring report to ADB and disclose such report in accordance with ADB’s Safeguard Policy.

Schedule 5, para 18

Complied with.

Within 3 months from the completion of the implementation of each resettlement plan, the Borrower shall cause the Project Executing Agency to submit a land acquisition and resettlement compensation completion report to ADB for

Schedule 5, para 19

Complied with.

Appendix 8 65


Compliance

the relevant resettlement plan.

Within 90 days from the effective date, the borrower and the Project executing agency shall establish a grievance review mechanism, acceptable to ADB, to receive and facilitate resolution of affected people's concerns, complaints and grievances about the project's land acquisition, resettlement and environmental impacts. The borrower and the project executing agency shall (a) make public the existence of this grievances review mechanism; and (b) proactively and constructively review and address grievance of affected people in relation to the project.

Schedule 5, para 20

Complied with.

The Borrower shall ensure, and cause the Project Executing Agency and Implementing Agencies to ensure, that the contractors comply with all applicable labor laws; provide equal pay for equal work; do not employ child labor; provide appropriate facilities for the children of the construction workers in construction campsites; and provide equal opportunities for women and men in the construction activities; and to the extent feasible, encourage employment of local labor from the conflict affected areas.

Schedule 5, para 21

Complied with.

66 Appendix 9

CONSULTING SERVICES

A. Proposed Consulting Services Recruitment

1. The report and recommendation of the President1 included a $6.4 million budget for consulting services, comprising:

(i) Internationally tendered consultants totaling 1,268 person-months (45 international and 1,210 national) for a $5.0 million budget, using quality- and cost-based selection, following Asian Development Bank (ADB) guidelines.

(ii) Individual consultants, depending on need, at a $1.4 million budget, selected following the Government of Sri Lanka guidelines.

2. The project administration manual, as part of the report and recommendation of the President, envisaged consulting services provided as:

(i) Sub-output A.1: National roads. Recruitment of an international consulting firm for construction supervision.

(ii) Sub-output A.2: Provincial roads, Northern Province. Recruitment of an international consulting firm for construction supervision.

(iii) Sub-output A.3: Pradeshiya Roads, North Central Province (NCP). Construction supervision to be undertaken by the project management unit (PMU) staff, supplemented as required by hiring individual consultants. Municipal, and urban roads, Northern Province. Recruitment of an international consulting firm for construction supervision.

(iv) Recruitment by other implementing agencies of individual consultants, as needed.

B. Actual Consulting Services Recruitment

3. At the project start, implementing agencies for the road sub-outputs commenced recruitment of consulting services as defined in the project administration manual. In late 2010, the Ministry of Economic Development (MED) issued instructions to all implementing agencies that the Central Engineering Consultancy Bureau (CECB) would be the design and construction supervision consultants, and that government funds would be used to pay for CECB services. As CECB is a state-owned enterprise, ADB funds could not be used.

4. The Road Development Authority (RDA), which was the national roads implementing agency, obtained dispensation to recruit an international consulting firm for sub-output A.1.

5. This change of policy adversely impacted implementation, especially for the Northern Province Road Development Department (NPRDD), which had spent six months on international recruitment to reach the final shortlisting stage.

6. By completion, $1.67 million had been spent on consultants out of the $6.40 million envisaged. The savings were reallocated.

1 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the

Democratic Socialist Republic of Sri Lanka for the Conflict-Affected Region Emergency Project. Manila.

Appendix 9 67

C. Consulting Services Engaged and Performance, by Sub-Output

7. Consulting service performance is reviewed by sub-output, drawing on the respective borrower’s completion reports. 2 As indicated in Table A9, not all implementing agencies engaged consultants, as some preferred to use in-house staff.

Table A9: Consulting Services by Sub-Output

Ref. Sub-Output Implementing Agency Consulting Services

Output A. Connectivity

A.1 National Roads Road Development Authority (RDA)

International firm

A.2 Provincial, Municipal, Urban Roads

Northern Province Road Development Department (NPRDD)

Central Engineering Consultancy Bureau( CECB)

A.3 Pradeshiya Roads, North Central Province Road Development Authority (NCPRDA)

In-house staff and individual consultants

Output B. Utilities

B.1 Power Supplies Ceylon Electricity Board In-house staff

B.2 Water Supplies National Water Supplies & Drainage Board (NWSDB)

In-house staff

Output C. Basic Services

C.1 Small and Medium Irrigation Schemes in NP

NP Irrigation Department (NPID)

CECB

C.2 Small and Medium Irrigation Schemes in NCP

NCP Irrigation Department (NCPID)

CECB

C.3 Small Tank Irrigation Cascade Systems

Ministry of Economic Development – Department of Agrarian Development

In-house staff

C.4 Administrative Offices Ministry of Public Administration and Home Affairs

CECB; Urban Development Authority & Provincial Building Dept; 1 individual consultant

Output D. Legal Governance

D.1 Judicial Centers Ministry of Justice CECB

Source: Borrowers’ Completion Reports.

2 Government of Sri Lanka. 2014. Conflict-Affected Region Emergency Project - Borrower’s Project Completion

Reports: A.1 Ministry of Highways, Ports & Shipping, Colombo; A.2 Northern Province Road Development Department, Jaffna; A.3 North Central Provincial Council, Roads Development Authority, Anuradhapura; B.1 Ministry of Water Supplies & Drainage, Colombo; B.2 Ceylon Electricity Board, Colombo; C.1 Northern Province Irrigation Department, Jaffna; C.2 Provincial Irrigation Department, NCP, Anuradhapura; C.3 Ministry of Economic Development, Colombo; C .4 Ministry of Public Administration and Home Affairs, Colombo; D.1 Ministry of Justice, Colombo.

68 Appendix 9

1. Sub-Output A.1 National Roads

8. The RDA recruited an international firm, with a national associate, using ADB-approved international competitive bidding procedures. The firm provided an international team leader (25 person-months) and 16 national consultants (287 person-months).

9. The RDA reported no difficulties with recruitment or consulting firm performance.

2. Sub-Output A.2 Provincial, Municipal, and Urban Roads, Northern Province

10. The NPRDD called for an expression of interest by an international consulting firm for the project implementation consultancy. However, NPRDD was obliged to cancel the process at the final shortlisting stage, to abide by MED’s directive to use CECB.

11. Lack of competent consultant staff in the project implementation unit resulted in construction delays and poor relationships with contractors. NPRDD claimed that the standard of work improved on completion of CECB involvement.

3. Sub-Output A.3 Pradeshiya Roads, North Central Province

12. The NCP RDA recruited individual consultants for design and construction supervision. No problems were reported.

4. Sub-Output B.1 Power Supplies

13. No consultants were engaged.

5. Sub-Output B.2 Water Supplies

14. The PMU and project implementation units were fully staffed by in-house personnel. Three individual consultants were engaged to undertake the initial environmental examination and social surveys, and the National Water Supply and Drainage Board was satisfied with their performance. A fourth individual consultant was recruited to conduct an impact assessment and prepare the borrower’s completion report and his performance was satisfactory.

6. Sub-Output C.1 Small and Medium Irrigation Schemes, Northern Province

15. The Northern Province Irrigation Department (NPID) needed consultants for design and construction supervision of the works on the medium schemes. At MED’s direction, NPID employed the services of CECB, which delayed fielding consultants. The CECB team was deployed from September 2011 to March 2014.

16. NPID reported that the performance of some CECB consultants was unsatisfactory. Key staff did not stay at their posts, completion of tasks lagged because consultants did not have appropriate experience and commitment, and junior project staff lacked clear direction.

17. NPID would have preferred contract staff from their team, instead of consultants.

7. Sub-Output C.2 Small and Medium Irrigation Schemes, North Central Province

18. The NCP Irrigation Department was obliged to engage CECB to undertake surveys, designs, estimates, proposals, bidding documents, and construction supervision, among other tasks. The CECB team contract was from October 2010 to December 2012, but their three-month delayed start stalled implementation.

Appendix 9 69

19. The NCP Irrigation Department expressed concern at the lack of experience of some junior CECB team members but said the situation improved after the first year. There was also concern that consultants did not give clear strategic advice on how to resolve contractor issues.

8. Sub-Output C.3 Small Tank Irrigation and Cascade Schemes

20. MED and Department of Agrarian Development did not engage consultants.

9. Sub-Output C.4 Administrative Offices

21. CECB was engaged for bill of quantities work, the Urban Development Authority for designs, and the Northern Province Provincial Building Department (NPBD) as consultants for construction supervision. NPBD’s service delivery was poor because of heavy workload and inadequate interaction with contractors. The situation improved in the final year when MED and ADB agreed to appoint the project engineer as consultant to expedite completion, dropping NPBD. The PMU recommended using a private consulting firm in future projects.

10. Sub-Output D.1 Judicial Centers

22. The Ministry of Justice engaged CECB consultants for designing, cost estimating, and tendering the court complexes, and for supervising construction. The ministry reported that the CECB consultants’ performance was satisfactory.

C. Lessons from the Consulting Services

23. Design and construction supervision consultants played an important role in the project, especially for agencies that had been weakened by years of conflict.

24. Implementing agencies had mixed assessments of CECB’s performance. The NPRDD was particularly dissatisfied with some CECB consultants’ level of experience, compared to the terms of reference issued, and reluctance to visit the project area.

25. In general, there were minimal problems with recruitment and performance of individual consultants and firms recruited under international competitive bidding.

26. One implementing agency felt that outsourcing design work to a consulting firm would have sped-up the project’s implementation, because the agency would have been better able to dictate timetables than was possible through its in-house teams, which had other priorities.

27. In future projects, consulting firm selection should be done on a competitive basis, as per ADB guidelines.

70 Appendix 10

CONTRACTORS

A. Introduction

1. The implementing agencies engaged many contractors for construction work. This appendix collates and summarizes the experiences with contractors, as documented in the borrower’s completion reports prepared by each of the 10 implementing agencies.

2. The report and recommendation of the President encouraged the use of local contractors, where possible, to reestablish local competence and encourage interaction with local communities. However, in the immediate post-conflict period, most local contractors lacked adequate competent staff, equipment, and access to construction materials, as well as sufficient financial resources. Moreover, with the influx of development projects to the Northern Province, contractors took on more work than they could manage.

3. Many local contractors were therefore unable to cope with the size of packages from the project, and some tried to subcontract work. In response, the Asian Development Bank (ADB) agreed to split the packages, especially for provincial roads, to enable smaller contractors to take on the work. This created additional monitoring and invoicing work for the Ministry of Economic Development (MED) and ADB, because the same vetting process applies to small contracts as to large ones. ADB granted MED a higher imprest ceiling to cope with the many invoices. The larger and better-resourced contractors from southern Sri Lanka generally performed better.

4. The Roads Development Authority (RDA) and Ceylon Electricity Board recruited contractors through international competitive bidding.

5. Domestic contractors were procured through national competitive bidding procedures, with selections approved by ADB. For sub-output C3 (small tank and cascade scheme and agricultural road rehabilitation), the Department of Agrarian Development selected farmer organizations as ‘direct contractors,’ under a prudent shopping system.

B. Performance Assessment by Sub-Output

6. Table A10.2 summarizes each implementing agency’s experiences in using contractors. The ‘performance’ entries are the overall assessments, based on the implementing agency’s own evaluation (where stated) and the project completion report consultants. For most sub-outputs, contractors’ performance was ‘satisfactory’ or ‘reasonably satisfactory.’

7. Of the four contractors recruited under international competitive bidding by RDA (sub-output A.1 – national roads) and Ceylon Electricity Board (sub-output B1 – power supply), three performed satisfactorily, but one of RDA’s contractors performed very unsatisfactorily throughout.

8. Of the contractors engaged from outside the region by the National Water Supply and Drainage Board, those for the Point Pedro project were rated ‘unsatisfactory’ because of their very late completion of construction.

9. The overall performance of local contractors in outputs C and D was ‘satisfactory’ or ‘reasonably satisfactory.’ However, individual contractors varied greatly in performance. There were many completion delays, especially under the irrigation sub-outputs (C.1, C.2, and C.3), and some poor quality work. Several contractors failed to meet their obligations, requiring re-tendering. Farmer organizations, operating as direct contractors, appeared to perform satisfactorily on small packages under sub-output C.3.

Appendix 10 71

10. A lack of financial, physical, and management resources was a common cause of delays by contractors. Splitting tasks into smaller packages was a successful approach under sub-outputs B.2 (provincial roads) and C.1 (Northern Province irrigation).

11. Not all the causes of delays by contractors were within their control. Needs for initial mine clearance, changes in designs by the implementing agencies, and a scarcity of local labor were also factors. Moreover, the implementing agencies’ handling of so many small contractors was a major task (sub-output C.3 had 275 contract packages). Field project staff had to monitor each contractor. Accounts had to be processed following ADB procedures and cleared through MED and ADB. Many small contractors lacked the financial skills to complete invoices correctly. This created an enormous volume of accounting tasks, which led to late reimbursements and contractors delaying work until paid. The issues faced by a sample of small local contractors are shown in Table A10.1.

12. Despite all these difficulties, each sub-output completed work by project closure, albeit with two extensions.

Table A10.1: Issues Faced by Contractors

Issues faced by contractor Degree of seriousness

Ranking

Delay in payments 90% 1

Delay in visiting technical consultants 40% 2

Poor coordination among line agencies 30% 3

Request by Farmer Organizations for works not estimated 25% 4

Poor cooperation from Farmer Organizations 20% 5

Time spent to clarify payment issues 15% 6

Note: Sample of 25 local contractors. Source: Ministry of Economic Development and Department of Agrarian Development. 2014. Conflict-Affected Region Emergency Project Borrower’s Completion Report. Colombo.

72 Appendix 10

Table A10.2: Summary of Performance by Contractors

Ref Sub-Output IA Contracts Performance Comments

A. Reestablished Connectivity

A.1 National Roads RDA CP1: B269 38 km Unsatisfactory The contractor, from India, did not commit sufficient resources and failed to meet September 2013 targets. RDA considered terminating the contract, but extended loan to March 2014 and then September 2014. Work eventually completed by September 2014, 12 months late.

CP2: B357 26 km Satisfactory The local contractor initially made poor progress, but works were completed in original loan period, by November 2013.

A.2 Provincial Roads NPRDD 23 PL/PS packages Reasonably satisfactory

One package was split into five and successfully awarded. All completed by September 2013, except two contracts that were terminated (1 contractors said ‘rates too low,’ and 1 had liquidity problems). All completed by September 2014.

A.2 Municipal and Urban Roads

NPRDD 15 LG packages Satisfactory Mannar package received only one bid; it was split into seven to suit local contractors. Mines delayed progress on a contract in Kilinochchi, and poor quality affected another. Most completed by September 2013; remainder by September 2014.

A.3 Pradeshiya Roads NCPRDA 18 km rural roads Satisfactory No serious problems in recruitment or completion dates.

B. Restored Utilities

B.1 Power Supply CEB Lot A: Grid substation

Satisfactory Two Indian contractors, not familiar with Sri Lankan systems, made several design faults that needed correction and delayed procurement. Contractors failed to pay subcontractor labor on time, which led to some disruption of work. Construction completed August 2013.

Lot B: Transmission line

B.2 Water Supply NWSDB Point Pedro: Construction and procurement, 5 lots

Unsatisfactory The main construction contractors each sought extensions (two to three times each), resulting in completion delay of up to 22 months. Reasons were changes in designs, poor weather, and lack of local labor. All completed by September 2014.

Eachchalampattu: Survey and

Reasonably satisfactory

Each of the five contractors sought extensions: three contractors required an extra 12 months. Reasons were changes in designs, poor weather, and lack of local labor.

Appendix 10 73

Ref Sub-Output IA Contracts Performance Comments construction, 5 lots All contracts completed by October 2014.

C. Improved Basic Infrastructure Services

C.1 Small and Medium Irrigation and Farm Roads, NP

NPID Rehabilitation of 67 tank irrigation and 7 salt-water exclusion schemes, and 109 farm roads


The majority of the many small local contractors completed work satisfactorily, and works were accepted by beneficiaries. Subcontracting work to unreliable small entities reduced quality. Quality of road constructed in Mannar was deficient and needed rectifying. In Mullaitivu, contractors did not perform well; one lot had to be repackaged as 5 smaller lots to complete, and another failed to deliver suitable quality work. Late invoicing by contractors created a cash flow problem at completion.

CC.2 Small and Medium Irrigation, NCP

NCPID 62 minor tank schemes, 22 lots


Most contractors did not attend pre-bid site visits, so were not fully aware of the work required. All contractors required extensions. Contractors did not have adequate management, skills, equipment, or financial resources. Some were awarded more than one package, which strained their capacity and caused delays. Three contracts were terminated and repackaged in 9 smaller lots. All contracts were completed 12 months late, by the end of June 2014. Processing of 16 contractors’ accounts created a heavy workload for project staff.

C.3 Small Tank Cascade Irrigation and Agricultural Roads

PCQAU 151 small tanks, 129 agricultural roads

Satisfactory Private contractors were used for most tank and road rehabilitation. Farmer organizations were engaged for all tanks and roads in Jaffna and all tanks in Trincomalee, and 10%–20% of roads in Anuradhapura, Vavuniya, and Trincomalee. Work completion delayed by 9 months to June 2014.

Private contractors: Tanks – 102 lots Roads – 102 lots Farmer organizations:

Contractors lacked financial resources, did not understand the ADB system, and were slow to invoice. Some ceased work for cash flow reasons. Slow payment processing was a serious issue for contractors, causing (i) construction delays, (ii) poor quality of work, (iii) incomplete works, and (iv) completion delays.

74 Appendix 10

Ref Sub-Output IA Contracts Performance Comments Tanks – 49 Lots

Roads – 27 lots Most farmer organizations were also involved in tank rehabilitation in labor, machinery supply, and, to a lesser extent, decision making.

C.4 Administrative Offices

MOPA 24 administrative buildings and equipment


Many contractors were over-committed on other contracts, and labor was scarce, which drastically slowed their work. Payment schedules were delayed. Contractors suffered because there was no provision in contracts for price escalation. Provincial building department (acting as construction supervision consultants) had problems with contractors’ payments that nearly led to uncompleted buildings). Payment processes for contractors created significant work for project implementation unit. Direct payment system improved payments process, and construction was completed by March 2014. All equipment was installed by October 2014.

D. Improved Legal Governance

D.1 Judicial Centers MOJ 3 court complexes and equipment

Satisfactory Contractors’ work was delayed by factors beyond their control (need to clear mines, increase in fuel price, and scarcity of suitable local labor). The contractor for furniture supply for one court complex failed to meet terms; the contract was re-tendered, but the new contractor did not supply according to the inventory. Local contractors for procurement found the ADB procedures cumbersome. All construction and procurement completed by July 2014.

ADB = Asian Development Bank, CEB = Ceylon Electricity Board, CP =Contract Package, IA = Implementing Agency, km = kilometer, LG = local government, MOJ = Ministry of Justice, MOPA = Ministry of Public Administration, NCP = North Central Province, NCPID = North Central Province Irrigation Department, NCPRDA = North Central Province Road Development Authority, NP = Northern Province, NPID = Northern Province Irrigation Department, NPRDD = Northern Province Road Development Department, NWSDB = National Water Supply and Drainage Board, PCQAU = Project Coordination and Quality Assurance Unit, PL/PS = provincial roads, RDA = Road Development Authority. Sources: Government of Sri Lanka. 2014. Conflict-Affected Region Emergency Project – Borrower’s Project Completion Reports: A.1 Ministry of Highways, Ports, and Shipping, Colombo; A.2 Northern Province Road Development Department, Jaffna; A.3 North Central Provincial Council, Roads Development Authority, Anuradhapura; B.1 Ministry of Water Supplies and Drainage, Colombo; B.2 Ceylon Electricity Board, Colombo; C.1 Northern Province Irrigation Department, Jaffna; C.2 Provincial Irrigation Department, NCP, Anuradhapura; C.3 Ministry of Economic Development, Colombo; C.4 Ministry of Public Administration and Home Affairs, Colombo; and D.1 Ministry of Justice, Colombo.

Appendix 11 75

ECONOMIC ANALYSIS

I. BACKGROUND

1. This appendix provides an economic impact assessment of the outputs for the Conflict-Affected Region Emergency Project. At appraisal, the project’s emergency nature presented difficulties in undertaking a rigorous economic analysis, and an internal rate of return was estimated only for the power sub-output. A unified economic internal rate of return (EIRR) for the project, at appraisal and in the project completion report, is also not possible because of the outputs’ diverse nature and because most of the benefits are non-quantifiable.

2. This appendix presents the economic analysis of the outputs, described in Appendix 2, in the following order:

Output A – Reestablished Connectivity A1: Rehabilitation of National Roads in Northern Province A2: Rehabilitation of Provincial, Municipal, and Urban Roads in Northern Province A3: Rehabilitation of Pradeshiya Sabha Roads in North Central Province (NCP)

Output B – Restored Utilities B1: Power Sub-Output B2: Water Supply Sub-Output

Output C – Improved Basic Social Services C1: Rehabilitation of Small and Medium Irrigation Tanks in Northern Province C2: Rehabilitation of Small and Medium Irrigation Tanks in NCP C3: Rehabilitation of Small Tank and Cascade Systems C4: Reconstruction of Administrative Offices

Output D – Improved Legal Infrastructure D1: Reconstruction of Judicial Centers

II. METHODOLOGY AND DATA AVAILABILITY

3. The economic analysis is based mainly on data provided in the respective borrower’s completion reports (BCRs). A total of 10 BCRs were prepared, eight of which included impact assessment survey results.1 Data availability details are in Table A11.1.

4. In addition to the sources listed in Table A11.1, the Asian Development Bank commissioned a comprehensive socioeconomic survey to provide primary data for this project completion report (PCR) impact assessment. This emphasized the sociological aspects of impact and is based on many interviews with stakeholders. The results are in Appendix 5.

5. For this report, EIRR estimates are made for output A: Reestablished Connectivity and sub-output B1: Power. The other outputs’ economic impacts are estimated using quantitative data as available, and qualitative assessments are made where applicable.

1 Government of Sri Lanka. 2014. Conflict-Affected Region Emergency Project – Borrower’s Project Completion

Reports: A.1 Ministry of Highways, Ports, and Shipping, Colombo; A.2 Northern Province Road Development Department, Jaffna; A.3 North Central Provincial Council, Roads Development Authority, Anuradhapura; B.1 Ministry of Water Supplies and Drainage, Colombo; B.2 Ceylon Electricity Board, Colombo; C.1 Northern Province Irrigation Department, Jaffna; C.2 Provincial Irrigation Department, NCP, Anuradhapura; C.3 Ministry of Economic Development, Colombo; C.4 Ministry of Public Administration and Home Affairs, Colombo; D.1 Ministry of Justice, Colombo.

76 Appendix 11

Table A11.1: Conflict-Affected Region Emergency Project Borrower’s Completion Reports, Summary of Data Availability

Output or Sub-Output Borrower’s Completion

Report Available

Field Survey Impact Assessment Available

Northern Province Roads Yes Yes – PPMS North Central Province – Pradeshiya Sabha Roads

Yes Yes – PPMS

National Roads Yes Yes Power Sector Yes No Water Supply Yes Yes Northern Province Irrigation Yes Yes North Central Province Irrigation Yes No Minor Irrigation Yes Yes Public Administration Yes Yes Legal Yes Yes PPMS = Performance Monitoring System. Source: Borrower’s Completion Reports

III. OUTPUT A: REESTABLISHED CONNECTIVITY

A. Introduction

6. The economic analysis compares the economic costs and benefits that occur in ‘with-project’ and ‘without-project’ scenarios. In the without-project scenario, road users are assumed to experience higher vehicle operating costs (VOCs) and travel time costs than the with-project scenario.

7. The analysis was initially conducted for each individual project road section. These were then combined to assess the economic viability of the overall investment for output A. Table A11.2 illustrates output A in terms of lengths and number of packages rehabilitated by different project road categories.

Table A11.2: Details of Project Roads

Category Number of Packages

Length (km)

National Roads 2 65.71 Municipal & Urban Roads 14 90.54 Provincial Roads 19 72.08 Pradeshiya Sabha Roads 4 17.87 Total 39 246.20 km = kilometer. Source: Borrower’s Project Completion Reports, Output A.

B. Analytical Approach

1. General

8. The approach adopted to evaluate output A’s economic feasibility follows the analytical framework of the Highway Development and Management (HDM) model, which is based on the pavement life cycle analysis concept.2 An assumption is that road pavements deteriorate as

2 World Road Association or Permanent International Association of Road Congresses (PIARC). 2002. HDM-4

Version 2. Paris.

Appendix 11 77

a result of several factors, including traffic loading, climatic conditions, and maintenance regimes. Impacts of the road condition and design standards on road users are measured to predict economic resource consumption, reflected in economic costs. Such road user costs comprise (i) vehicle operating costs (fuel, tires, oil, spare parts, depreciation, and capacity use), (ii) costs of travel time for both passengers and freight, (iii) capital costs involved in the vehicle fleets, and (iv) costs to the economy of road accidents. The model ensures that traffic volumes would reach the road’s capacity (either in the without- or with-project situation), while not allowing it to grow beyond the ceiling during the period under review. The primary inputs to the model include road characteristics and sectioning, proposed works interventions, vehicle fleet, VOC, and value of passenger travel time (VOTT), updated to the current year.

9. The conversion factors used in the economic evaluation are based on the world market price numeraire. As such, a standard conversion factor applies to the costs of skilled and unskilled labor and of local resources (such as construction materials and transport), as well as to project outputs in terms of VOCs and VOTTs. Unless otherwise stated, a standard conversion factor of 0.85 is used to convert financial prices (costs) into economic prices (costs).

10. The construction period varied across packages. In general, most packages started construction either in the fourth quarter of 2011 or the first quarter of 2012. Construction works on these packages continued until late 2013 or early 2014, except packages for the urban roads in Mannar district and Pradeshiya Sabha roads in Anuradhapura district. For the analysis, it was assumed that the generation of benefits for all road types started immediately after construction completion and continued for 20 years with appropriate routine maintenance interventions.

2. Traffic Analysis

11. The base year traffic volume expressed in average annual daily traffic (AADT), its composition, and future growth rates are inputs to the economic analysis. AADT in the base year (considered as 2010) had been suppressed because the conflict had ended just one year before. As such, the base year traffic is back calculated using traffic counts in 2014.

12. Table A11.3 shows estimated AADT as a range for the base year by road category.

13. The composition of motorized traffic is shown in Table A11.4. Pedal cycles are the only mode of transport considered as non-motorized for this analysis.

Table A11.3: Base Year Traffic on Project Roads

Road Category AADT

Motorized Non-Motorized

National 1,687–1,890 750–800

Municipal & Urban 136–8,452 121–7,516

Provincial 190–2,700 168–1,500

Pradeshiya Sabha 250–350 125–300

AADT = average annual daily traffic. Source: Borrower’s Completion Report, Northern Provincial Roads.

Table A11.4: Composition of Average Annual Daily Traffic on Project Roads

Road Category Composition, %

MC 3W Car Van Bus LGV MGV HGV Tractor

National 41 5 10 4 10 9 17 3 1

78 Appendix 11

Municipal & 50 14 8 6 10 5 5 1 1

Provincial 40 15 12 8 10 7 6 1 1

Pradeshiya

64 16 3 3 1 4 5 1 3

3W = three wheeler, HGV = heavy goods vehicle, LGV = large goods vehicle, MC = motorcycle, MGV = medium goods vehicle. Source: Consultant estimates based on the results of traffic surveys.

14. Road improvements would motivate road users to shift from non-motorized to motorized modes, such as two and three wheelers. Such modal shifts were considered in estimating traffic growth rates for private vehicles and, hence, are not considered as generated traffic, to avoid double counting. Following improvements, there would be a diversion of vehicles from roads in competition. It is presumed that such diversions would increase project roads’ traffic by 10%. A 10% increase of generated traffic for freight vehicles is also assumed, considering the agriculture sector’s productivity growth in the project-influenced area.

15. The Road Development Authority has produced traffic growth rates for the national roads in Northern Province by using the System Traffic Demand Analysis traffic-forecasting model, which was developed using the four-step demand forecasting method (trip generation, trip distribution, and model choice and traffic assignment) in traffic theories. These growth rates were also adopted for provincial, municipal, and urban roads, as their functionality is similar to the national roads. Table A11.5 presents traffic growth rates used for all project road types in Northern Province.

Table A11.5: Traffic Growth Rates for Project Roads in Northern Province

Vehicle Type 2010–2012 2012–2017 2017–2022 2022–2027 2027–2034

Motorcycles 9.3% 10.1% 6.4% 4.8% 4.0%

Three Wheelers 8.2% 7.4% 3.9% 2.5% 1.9%

Passenger Cars 7.3% 8.8% 6.6% 4.6% 3.6%

Passenger Buses 3.4% 4.1% 3.0% 2.7% 2.6%

Goods Vehicles 7.3% 8.9% 8.5% 4.9% 4.8%

Source: Planning Division, Road Development Authority.

16. Traffic growth rates for Pradeshiya Sabha roads in NCP are derived by relating provincial growth in population, per capita income, and agriculture gross domestic product to the growth of buses, private vehicles, and goods vehicles.. Growth rates were estimated at 5.7% for buses, 6.6% for private vehicles, and 4.0% for goods vehicles for 2015–2025, and 4.2% for buses, 3.7% for private vehicles, and 2.7% for goods vehicles for 2025–2034.

3. Economic Benefits

17. The following benefits were included in the economic evaluation:

(i) Savings in travel time for passengers and goods in transit.

(ii) Savings in operating cost for all kinds of vehicles.

(iii) Savings in road maintenance costs . (iv) Reduction in the number, as well as severity, of accidents and the related costs.

(While this is likely to be a substantive benefit, it has not been included in the analysis because of a lack of reliable data).

(v) More prompt ambulance response times and increased safety.

Appendix 11 79

18. Project road improvements cause an increase in vehicles’ speeds and hence have time saving benefits for both passengers and freight transport. Table A11.6 compares estimated operating speeds before and after construction, and gives the travel time percentage reduction.

Table A11.6: Average Operating Speeds and Reduction in Travel Time

Category Average Operating Speed (km/hr)

Reduction in Travel Time

Before After National Roads 25 45 44% Municipal & Urban Council Roads 25 40 38% Provincial Roads 20 35 43% Pradeshiya Sabha Roads 15 25 40% km = kilometer. Source: Consultant’s estimates based on travel time surveys.

19. All passengers were assumed to accrue a monetary benefit from the travel time savings. VOTTs for passengers are based on the National Planning Department guidelines.3 The department’s manual defines different user types of public and private transport by linking them to particular income categories, identified as deciles of income-earning households. Work time has been valued at 1.2 times the hourly rate (allowing 20% for employers’ overheads), and non-work time at 0.2 times the hourly rate. Table A11.7 presents the estimated time values and occupancy rates for different passenger vehicle types.

Table A11.7: Value of Travel Time for Passengers and Occupancy Rates

Vehicle Type Value of Work Time (SLRs/hr)

Value of Non-Work Time (SLRs/hr)

Occupancy Rate

Two & Three Wheeler 107.5 92.2 1.5

Car orJeep 565.8 94.3 2.5

Van 373.4 62.2 4.5

Public Transport 44.4 7.3 25.0–40.0 Source: Consultant’s estimates.

20. The value of cargo delay was derived as the opportunity cost of capital tied up in delayed cargo (value of cargo multiplied by the interest rate). It was estimated at SLRs22 per hour for light commercial vehicles and SLRs66 per hour for trucks, assuming a cargo value of SLRs200,000–SLRs250,000 per ton for light commercial vehicles and trucks, an interest rate of 15%, and that two-thirds of cargo vehicles benefit.

21. The HDM-4 model is used to estimate the VOCs for motorized and non-motorized traffic on each selected road section under with- and without-project scenarios. It takes into account the speed, travel time, surface quality, road congestion, and vehicle characteristics (including fuel consumption rates), and presents the net reduction in VOC as the savings in routine and periodic maintenance costs. These are considered a benefit of road improvements and are therefore included in the analysis. Periodic maintenance interventions are scheduled every 10 years for both asphalt concrete and double bitumen surface-sealed pavements under the with-project scenario. No periodic maintenance was considered for the without-project scenario.

3 Government of Sri Lanka, National Planning Department. 2001. Assessing Public Investment in the Transport

Sector. Colombo.

80 Appendix 11

4. Construction Cost

22. Each project road’s economic cost was estimated, leaving out all taxes and duties from actual construction cost, by using a 0.85 conversion factor. Table A11.8 summarizes economic cost per kilometer (km) as a range for the project road categories.

Table A11.8: Economic Cost of Construction

Category Surface Type Economic Cost (SLRs

million/km) National Roads AC 55.0 Municipal & Urban Council Roads AC 15.2–23.4 Provincial Roads DBST 11.1–25.6 Pradeshiya Sabha Roads DBST 6.6–11.3 AC = asphalt concrete, DBST = double bitumen surface sealed, km = kilometer. Source: Borrower’s Project Completion Reports, Output A.

C. Results of Economic Analysis

23. The evaluation has demonstrated the project’s adequate economic viability, with an EIRR of 19.9% and net present value of SLRs4,640 million at a 12% discount rate (Annex A.11.14). The project’s economic analysis also indicates that savings in vehicle operating costs account for 55% of total benefits, whereas savings in travel time account for 42% and savings for non-motorized vehicles account for 3%, over the design life of 20 years. Overall, the project’s economic feasibility is robust and can tolerate adverse developments to the primary benefit, cost categories, and parameter changes.

24. When comparing VOC per vehicle-km before and after construction, there is a reduction of 28% for national roads, 21% for municipal councils and urban councils, 24% for provincial roads, and 30% for Pradeshiya Sabha roads. Similarly, an assessment on travel time cost per vehicle km revealed a reduction of 44% for national roads, 26% for municipal councils & urban council , 29% for provincial roads, and 37% for Pradeshiya Sabha roads.

IV. OUTPUT B: RESTORED UTILITIES

A. B1: Power Sub-Output

1. Expectations at Appraisal

25. During Sri Lanka’s conflict period, most of the Northern Province’s electricity infrastructure was destroyed. An unreliable and sporadic supply of electricity was available from two small thermal generators that provided electricity at a very high unit cost. Partial and total blackouts were a common occurrence. The project supported restoring a reliable supply to the Northern Province by construction of a grid station at Chunnakam and a new transmission line from Kilinochchi to Chunnakam. These two investments would connect the entire Jaffna peninsula to the national grid, thereby enabling a reliable and high-quality power supply.

2. Methodology

26. The power sub-output was subjected to a quantitative economic analysis at appraisal, providing an EIRR of 24.4%. This assessment recalculates the EIRR, using actual costs and expected benefits. Data for the assessment were obtained from Ceylon Electricity Board (CEB) sources, at the regional office in Jaffna and from CEB’s published data.

Appendix 11 81

3. Economic Analysis

27. The analysis is based on only measurable benefits. The analysis uses economic border prices, using the world price numeraire. The actual costs incurred during implementation are divided into traded, non-traded, and labor outputs, with further categorization into civil works, general material, training, and recurrent expenses. A standard conversion factor of 0.85 is used to derive general economic prices. Other conversion factors are derived for each of the cost categories, based on the weight of traded and non-traded goods in each category. The estimate follows the same basic assumptions as at appraisal, with a 25-year project life and a 2% allocation of capital costs for operation and maintenance. Estimated line losses are based on appraisal assumptions because CEB does not have new project investment-related estimates.

28. The benefits from the project are as follows:

(i) Improved access to electricity for all households in the Jaffna peninsula.4

(ii) Reduced electricity costs. Electricity supply is provided at a substantially lower unit cost because of connection to the national grid. This enables energy from a generation mix that includes hydro and coal power, thereby reducing dependency on oil-based thermal power generation, which was produced at a very high unit cost from Jaffna’s two small oil-fired thermal generators.

(iii) Improved access to non-household categories, such as industries, commercial establishments, and hotels.

(iv) Reduced blackouts. Despite Jaffna peninsula’s aged distribution network, blackouts due to distribution faults are minimized because of the new substation, which has been provided with additional feeders that allow only small network sections to be affected by a power outage.

Table A11.9: Jaffna Peninsula Electricity Connections by Category

Category 2009 2012 2014

Domestic 85,566 110,292 128,289

Industrial 1 1,462 2,346 2,949

Industrial 2 286 306 115

General Purpose 1 9,275 11,936 14,179

General Purpose 2 8 - -

General Purpose 3 or 4 - - 526

Religious 2,076 2,408 2,679

Hotels - - 2

Total 98,673 127,288 148,739 Source: Electrical Engineer, Ceylon Electricity Board – Jaffna Area.

29. As shown in Table A11.9, at the time of the PCR mission, the Jaffna peninsula had about 149,000 electricity connections, of which 86% were for domestic consumers. In total, the peninsula has about 185,000 families in an estimated 160,000 households. About 50% of domestic consumers use less than 60 units per month, reflecting the prevalence of low-income consumers, while connections are given for free to internally displaced persons (IDPs). Low-income consumers also benefit from a cross-subsidy from higher-consumption consumers, while those under the government’s Samurdhi welfare scheme, who are not IDPs, receive a

4 The operational area under the CEB’s Jaffna Area Office covers Jaffna City, Jaffna suburbs, Chunnakam, Point

Pedro, Chavakachcheri, Vaddukodai, and Velanai.

82 Appendix 11

loan for electricity connection. To reach total connectivity to the grid, about 40,000 new connections are expected to be required. This includes new housing schemes being built with foreign assistance. New domestic connections had been given at the rate of about 15,000 per year during 2011–2012, with the return of IDPs to the peninsula and restoration of dwellings.

30. The non-domestic categories have showed strong signs of growth, and this trend is expected to continue. Irrigation users have increased with the revival of farming, and a revival of fisheries has increased energy use by ice plants. Newly restored hospitals are also major non-domestic users.

31. Project costs for the two investments (transmission line and substation) were obtained from CEB’s borrower’s completion report (BCR).

4. Results of Economic Analysis

32. Using the actual data at the time of the mission and the assumptions, an EIRR of 28.6% was obtained, indicating that the sub-output is economically viable. The recalculated EIRR (28.6%) is higher than that estimated at appraisal (24.4%). Cost–benefit streams are given in Annex A.11.15.

33. Several factors contributed to this improvement. The cost per unit of electricity at the point of use is lower than that assumed at appraisal, mainly because of contributions to the national grid since 2013 by low-cost, 900-megawatt (MW) coal-powered thermal generators at Norachcholai. There was a substantial reduction (33%) in average cost per unit of electricity in 2013 compared to 2012. Furthermore, the capital costs at appraisal (estimated at SLRs3,545 million) were considerably higher than the actual costs of SLRs1,730 million, for both the transmission line and substation.

34. Indirect benefits of the power sub-output will also be the increased confidence of investors in the peninsula. More investments are expected in industries, hotels, and apartment complexes. Overall, indirect benefits to people on the peninsula arise from enhanced productivity, convenience, and uninterrupted use of appliances for improved quality of life.

B. B2: Water Supply Sub-Output

1. Expectations at Appraisal

35. The water supply schemes at Point Pedro (Jaffna peninsula) and Eachchalampattu (east coast) were intended to serve areas where the population depended mainly on dug wells with poor water quality. The interventions also targeted returning IDPs.

2. Methodology

36. This assessment uses the results of a comprehensive socioeconomic survey conducted by the implementing agency, National Water Supply and Drainage Board, as part of the BCR. The survey covered a sample of about 125 households at both locations, and included three focus group discussions at each location. In addition, the mission visited both locations and had discussions with officials engaged in implementation and beneficiaries.

37. An EIRR estimate had not been attempted at appraisal. Both project-funded water schemes had not been fully commissioned at the time of PCR mission, with the connections issue at Point Pedro having commenced a month prior. Potential consumers at both locations are interested in obtaining new connections. However, ambiguity remains regarding the actual amount of water that will be used, because residents appear to prefer ‘free’ well water for non-critical uses, such as washing, and the project-provided water for drinking and cooking. For this

Appendix 11 83

reason, an exact estimate of project-derived benefits cannot be made until both schemes are in full operation.

3. Economic Benefits

38. The economic benefits of water are wide ranging and include poverty reduction, health improvements, and women’s empowerment. Water scarcity leads to loss in productive time, and the productive time is one of the most important factor in measuring economic benefits. In some locations, the need for safe drinking water means households pay high prices for water, diverting earnings from other household priorities.

39. Figure A11.1 illustrates the time households take to collect water at the two project sites. The time taken was longer at Point Pedro than at Eachchalampattu. However, about 25%–30% of households at each location had to devote 3–4 hours per week. A gainfully employed person who spends about 3.5 hours per week for water procurement will forego an income of about SLRs2,000 per month, or about 10% of the average income for a low-income household.

40. Despite the general perception that women play a primary role in fetching water, men have the main responsibility for this at both locations, with a high of 82% of men at Point Pedro. This has an adverse impact on household finances, as men, who are the primary household providers, lose employment time.

Figure A11.1: Time Taken to Collect Water (hours per week)

Source: Impact Assessment Survey – Borrowers Completion Report, National Water Supply and Drainage

Board.

41. Figure A11.2 shows the amount of money spent on water prior to the new schemes. Households demonstrate a high willingness to pay for water, with about 88% at both Point Pedro and Eachchalampattu incurring expenditure of SLRs100–SLRs1,000 per month prior to construction of the new systems. Point Pedro residents interviewed by the mission said they usually use the poor-quality well water for washing, and purchase water for drinking and cooking. Expenditure on food in low-income areas in the northeast is estimated at about SLRs12,000 per month (65% of total expenditure). Households that pay more than SLRs1,000 for water at Eachchalampattu (11% of households) will reduce this expenditure by about 90% after the scheme commissioning, enabling more expenditure on food and other essentials.

84 Appendix 11

Figure A11.2: Money Spent on Water ( SLRsper month)

Source: Impact Assessment Survey – Borrowers Completion Report, National Water Supply and Drainage Board.

42. Focus group discussions during the impact assessment survey revealed that many residents were concerned about a perceived inability to afford the initial water system connection. The connection charge per household varies from SLRs14,000 to SLRs16,000. Low-income families registered under the government’s Samurdhi welfare scheme qualify for an installment scheme, whereby the connection cost is added in installments to the monthly bill. At Point Pedro, 25% of new connections provided since September 2014 have been to Samurdhi beneficiaries. It is interesting to note that almost all such households preferred to pay outright for the connection, despite the availability of the concessionary payment method. The mission found that this was because of the tedious paperwork involved in applying for the concession. However, an important lesson is that even the poorest households give high priority to a water connection, despite charges equaling a low-income family’s average monthly household expenditure.

4. Health-Related Benefits

43. An improved supply of safe drinking water has wide-ranging health benefits, mainly in the reduction of water-borne diseases. Safe drinking water allows for (i) avoiding the short-term effect of water-borne disease, such as diarrhea; and (ii) avoiding the long-term, and potentially more serious, effects of drinking water polluted with agrochemicals. (North Central Province [NCP] has a 15% prevalence of chronic kidney disease, which is attributed to such pollution.) The impact assessment survey reveals an awareness of these aspects among the beneficiary population. At Point Pedro, 15% of beneficiaries expect improved school attendance because of a reduction in water-borne disease.

44. About 30% of households reported using water from an irrigation canal for cooking, using a cloth for filtration and subsequent boiling. These methods are ineffective for removing pollutants, which create a substantial health risk. The project schemes will eliminate this risk.

45. Kidney disease has not been reported as widely in the Jaffna peninsula as in NCP. This can be attributed to (i) reduced groundwater depletion because of the low population density during the 30-year conflict, and (ii) reduced pollution of groundwater from agrochemicals and

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fertilizer due to their non-availability during most of the conflict period. This scenario is changing rapidly with the return of the population and an increase in farming. Abstractions from the dune-sand aquifers at Point Pedro yield uncontaminated water, akin to rainwater harvesting, which does not have the salinity hazard of other groundwater sources in the peninsula. The Eachchalampattu water source uses a river, which minimizes the possibility of pollution at source.

46. The avoidance of chronic kidney disease, through reduced reliance on potentially polluted groundwater, yields substantial economic benefits both from foregone individual income and reduced expenditure by government health services. The government spent an estimated SLRs238 million in 2013 on chronic kidney disease-related drugs and supplies alone in NCP, and SLRs116 million on dialysis machine procurement. Reduced dependence on potentially contaminated groundwater as a drinking source is crucial for Jaffna peninsula residents’ health.

V. OUTPUT C: REHABILITATED IRRIGATION

A. Expectations at Appraisal

47. As farming was the main occupation in the conflict-affected areas, the project included an output to restore small- and medium-sized tank irrigation schemes, with a target of about 10 medium and small irrigation schemes. At project completion, the design had been substantially expanded to include the following:

(i) C.1: Northern Province: Rehabilitation of 17 medium and large tanks in Mullaitivu, Vavuniya, and Kilinochchi districts, 7 saltwater exclusion schemes, 11 small tank irrigation systems in Weli Oya (Mullaitivu district), 38 other small tank irrigation systems, and 109 agricultural roads.

(ii) C.2: NCP: Rehabilitation of 62 minor tank irrigation schemes.

(iii) C.3: Northern Province, NCP, and Eastern Province: Rehabilitation of 151 small tank and cascade systems and 129 agricultural roads. (Added in 2013 as a new sub-output.)

B. Methodology

48. The provincial irrigation departments of Northern and North Central provinces undertook the irrigation rehabilitation. The Project Coordination and Quality Assurance Unit, directly with the Department of Agrarian Development (DAD), supervised the added small tanks output. Each implementation agency prepared an impact assessment report, which provided feedback on farmers’ responses to the interventions, changes in their agricultural productivity, and impact on their livelihoods. However, the assessment period coincided with a drought that affected the project areas, and any immediate impact on crop output was difficult to measure. The primary data collected by the implementing agencies was supplemented by the mission’s own field visits that included visiting several small and medium tanks. The mission interviewed farmer organization representatives and irrigation officials involved with rehabilitation.

49. To supplement the BCR’s earlier findings, the PCR mission did a field assessment in October–November 2015 to assess the output’s impact. Data collection was undertaken at the regional offices of the agriculture or agrarian services provincial-level departments. Guidance was obtained from the DAD water management director on survey design. A survey team visited several agrarian services offices in the project districts with sufficient advance notice and obtained the latest available data pertaining to cultivation seasons in 2014–2015. Data was

86 Appendix 11

obtained for 98 tanks under the purview of the DAD. The information obtained from the survey was tabulated and analyzed on a district basis, and the results are presented in para 50.

C. Economic Benefits

1. Changes in Cultivated Area

50. Table A11.10 provides details of the changes in cultivated area of the tanks surveyed.

Table A11.10: Changes in Cultivated Area (Sample of Tanks)

Changes in Cultivated Area (in Acres) by District

Before After % Change Anuradhapura 1,073 1,142 6% Trincomalee 1,365 1,443 6% Vavuniya 1,333 1,573 18% Killinochchi 85 85 0% Jaffna 696 1,475 112% Total for Sample 4,552 5,718 26% Source: Project Completion Report Mission: Survey of Rehabilitated Tanks October–November 2015.

Figure A11.3: Changes in Cultivated Area (Acres)

Source: Project Completion Report Mission: Survey of Rehabilitated Tanks October–November 2015.

51. One of the irrigation rehabilitation objectives was the expansion of cultivated area, especially of paddy, since project areas were adversely affected by the conflict. In some project areas, especially in the Northern Province, farmers could not cultivate their lands either because of being directly affected by the conflict or being displaced. The surveyed sample shows that there has been a 26% increase in the cultivated area after tank rehabilitation, with significant regional variation. In Jaffna district, the cultivated area at the project tanks has more than doubled, while the expansion in North Central and Eastern provinces has been much less.

2. Number of Farmer Beneficiaries

52. Table A11.11 and figure A11.11 show the changes in the number of farmer beneficiaries at the project tanks. As expected, the changes follow the trends of the cultivated areas, though at a slower pace. Overall, the number of farmers served by the rehabilitated tanks has grown by 29%, mainly driven by increases in Jaffna district.

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Table A11.11: Number of Farmer Beneficiaries (Sample of Tanks)

Number of Farmers by District Before

Project After Project % Change

Anuradhapura 641 685 7% Trincomalee 574 586 2% Vavuniya 558 647 16% Killinochchi 55 55 0% Jaffna 742 1,346 81% Total for sample 2,570 3,319 29% Source: Project Completion Report Mission: Survey of Rehabilitated Tanks October–November 2015.

Figure A11.4: Number of Farmer Beneficiaries


53. The increases in the North Central and Eastern provinces have been less than 10%.

3. Paddy Yields

54. Paddy yields provide the most significant indication of irrigation rehabilitation impact. The yields, expressed in bushels per acre in Sri Lanka’s agrarian system, showed an overall increase of 24% for the maha (or main) cultivation season.

Table A11.12: Changes in Paddy Yields (Sample of Tanks by District) (Bushels per Acre)

Paddy Yields (Maha) Before


Anuradhapura 60 67 11% Trincomalee 77 97 25% Vavuniya 88 106 21% Jaffna 39 55 40% Average for sample 66 81 24%

Paddy Yields (Yala) Before


Anuradhapura 35 40 16% Vavuniya 95 112 18%

88 Appendix 11

Average for sample 65 76 18% Note: Information for the yala season is available only for two districts. One bushel of paddy = 21 kilograms. Source: Project Completion Report Mission: Survey of Rehabilitated Tanks October–November 2015.

Figure A11.5: Changes in Paddy Yields (Bushels per Acre)


4. Cropping Intensities

55. Cropping intensity is the number of times a crop is planted per year, and is a measure of the efficiency of agricultural land use. Survey data on cropping intensity was available only for Vavuniya and Jaffna districts. Cropping intensities for paddy increased by 21% in Vavuniya and 25% in Jaffna. Overall, only about 5% of tanks had shown a cropping intensity above 100 prior to rehabilitation.

Table A11.13: Changes in Cropping Intensities (Sample of Tanks) (Bushels per Acre)

District Before After % Change Vavuniya 79 99 25% Jaffna 61 74 21% Average for sample 70 86 23% Source: Project Completion Report Mission: Survey of Rehabilitated Tanks October–November 2015.

Figure A11.6: Changes in Cropping Intensities

(Bushels per Acre)

Source: Project Completion Report Mission: Survey of Rehabilitated Tanks October– November 2015.

Appendix 11 89

56. Expectations for the rehabilitation period among farmers were about a 30% improvement in cropping intensities, as explained to the mission by a group of local farmers. The historical cropping intensity for paddy in Jaffna district has been about 110, which is lower than the national average, and the potential exists for further improvement. However, farmers in the district do not cultivate paddy during the minor yala season, primarily because of water constraints.

5. Other Benefits

57. During surveys conducted for the BCR, farmers also reported higher expectations in aspects besides crop cultivation. Of those surveyed at the rehabilitated tanks, 90% stated they expect an improvement in the water table and levels at their wells because of the higher tank water levels. This is crucial to farmers who have faced a lack of water for domestic use during past droughts. Among other potential benefits expressed by farmers are improved conditions for livestock rearing (90% of farmers) and, to a lesser extent, inland fisheries (26%). More important, the farmers expect a lowering of farming risks, leading to more regular incomes and a higher standard of living. Some farmers have reported increases in land values in areas around the rehabilitated tanks. Also, some of the tank bunds widened and strengthened under the project now serve as access roads to vehicles used by farmers, providing yet another economic benefit.

58. The rehabilitation of small tank schemes included the desilting of tank beds, in addition to improvements to tank bunds, sluices, and channels. The mission observed several instances where the silt was deposited in adjoining farmlands, and were informed by a Project Coordination and Quality Assurance Unit representative that this significantly increases soil fertility. Farmers repeatedly requested that silt be deposited on their lands.

59. Some of the construction contracts were awarded to farmer organizations, thereby improving farmers’ incomes at a time of severe drought in project areas and strengthening the rural economy. According to procurement guidelines, farmer organizations are eligible to undertake contracts below SLRs3.7 million. Farmer participation has been 100% in Jaffna and Trincomalee districts, as shown in Figure A11.7.

Figure A11.7: Farmers Participation in Construction (Tanks and Rural Roads)

Source: Impact Assessment Survey, Borrowers Completion Report, Ministry of Economic Development – Department of Agrarian Development.

90 Appendix 11

60. Rural access roads. It is well documented that the poorest segments of Sri Lanka’s rural population live at the extremes of road access, along undeveloped roads where a lack of demand for land improves land affordability. These roads allow communities to transport inputs to farms, market produce, and meet social needs. Under the irrigation outputs, 705 km of agricultural roads were rehabilitated: 307 km under C.1 (Jaffna, Vavuniya, and Mannar) and 398 km under C.3 (6 districts of North, North Central, and Eastern provinces), by June 2014.

61. While the roads’ economic benefits cannot be measured quantitatively, 75% of the improved roads had more than 100 families per km, while 44% had 300 families per km. This shows the roads were selected to maximize economic benefits. The roads are also expected to contribute to investment in bicycles, motorcycles, and three wheelers, thereby increasing access to markets and traders. As such, economic efficiency would improve, contributing to a higher standard of living. The mission also observed a tractor-trailer loaded with vegetables on one project road, and were informed that the road was new and built where no road had existed.

D. Conclusions

62. Beneficiaries could not benefit from the irrigation output because of the drought conditions that prevailed immediately after rehabilitation, when surveys revealed that conditions were worse than before rehabilitation. However, a survey conducted after favorable weather conditions in 2014–2015 showed that the farmers have received significant benefits from tank rehabilitation. The benefits are expected to further improve, once the conflict-affected population returns to normalcy.

VI. OUTPUT C4: RECONSTRUCTED ADMINISTRATIVE OFFICES


63. The prolonged conflict had destroyed or damaged most of the public administration infrastructure in conflict-affected areas. The government viewed restoring public administration services as an urgent priority, especially as the internally displaced persons (IDPs) had many issues to be resolved (e.g., loss of personal identification documents and land titles, and access to the IDP assistance programs).

64. To meet this need, the project constructed the following infrastructure:

(i) District secretariats at Kilinochchi and Mullaitivu;

(ii) Divisional secretariats at Jaffna, Mullaitivu, and Mannar;

(iii) Circuit bungalows at Mannar;

(iv) Officers’ quarters at Jaffna, Kilinochchi, Mullaitivu, Mannar, and Vavuniya;

(v) Assistant Government Agents’ (AGAs’) quarters at Kilinochchi and Mannar;

(vi) AGAs’ quarters at Jaffna and Mannar (reconstruction);

(vii) Divisional secretariats at Mannar (reconstruction);

(viii) Cultural center at Mannar;5

(ix) Divisional secretariats at Kilinochchi (repairs);

(x) AGAs’ quarters at Kilinochchi and Mannar (renovations);

(xi) District Secretary’s bungalow at Kilinochchi; and

(xii) Store and open garage for District Secretary’s office at Vavuniya.

5 The cultural center was added in 2012 but subsequently dropped by the government.

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B. Methodology

65. It is to be expected that an investment in public administration infrastructure would yield only indirect economic benefits. To evaluate benefits, the implementation agency conducted a survey of stakeholders. The survey covered about 50 respondents, including the general public, public administration staff, and project contractors and consultants. In addition, the PCR mission visited the following facilities and had discussions with staff: (i) Divisional Secretariat, Weli Oya; (ii) Divisional Secretariat, Velanai; and (iii) District Secretariat, Kilinochchi.


66. The main economic benefit for the general public was time saved in dealing with public officials. In discussions with some beneficiaries, who had visited the Kilinochchi District Secretariat constructed under the project, the mission found that the new, larger office space had allowed for the separation of various divisions, which enabled the public to resolve their problems more expeditiously. The actual time savings were not quantifiable, mainly because of the complexity and variety of issues faced by beneficiaries, and were not covered by the implementing agency’s survey. Work processes had become smoother for the public, with large and comfortable waiting areas compared to the congestion experienced earlier. Figure A11.8 illustrates the public perception of the service quality at the district and divisional secretariats. In both categories, the public perceived improvements that translated into time savings. The secretariats also had increased staff productivity, because of the project-provided furniture and equipment (such as computers) and staff accommodation quarters.

Figure A11.8: Public Perception of Administrative Office Service Quality (Before and After Project)

Source: Borrowers Completion Report: Ministry of Public Administration.

VII. OUTPUT D1: IMPROVED LEGAL INFRASTRUCTURE


67. The objective of the legal infrastructure output was to restore the perceived personal and communal security of conflict-affected communities and IDPs. The target was to rehabilitate and reconstruct courthouses at up to nine strategic locations in Northern Province. This was later revised to the construction of three courthouses, at Mallakam, Chavakachcheri, and Kayts.

92 Appendix 11

B. Methodology

68. The potential for providing a detailed economic analysis of legal infrastructure is limited. However, the mission visited all three sites in the Jaffna peninsula and Kayts island, meeting stakeholders such as judges, lawyers, and officials, as well as consultants who supervised construction. The implementing agency, the Ministry of Justice, engaged a consultant to prepare their BCR, which included an impact assessment survey of 120 persons. This assessment uses the survey’s findings.


69. The most striking change from the project interventions is the working environment of the courts. Prior to the project, the courts functioned in small houses that were inadequate in size and facilities. For example, the population of 254,246 under the Mallakam court jurisdiction was served through a rented three-bedroom house. As such, they could not have been expected to efficiently provide the legal services required. The project-constructed courthouses, by contrast, are large and purpose-built. An important indicator of economic efficiency is the average number of cases disposed per month. Data for 2014 are not available for all three courthouses; the post-project data are derived from statistics for the last three months of 2013. Figure A11.9 shows an improvement in the number of cases disposed at all three courthouses, with an average increase of 36%. This improvement saves for both litigants and officials. The mission was informed that there has been an increase in cases, and this is attributed partly to more litigants coming forward because they are aware of the more expeditious processes at the new courthouses.

70. Judges and lawyers interviewed by the mission stated that there has been an increase in land cases in the new courts. Being informed of the smoother case processing, landowners residing in southern Sri Lanka, as well as those abroad, have engaged lawyers in attempts to repossess land that had been occupied by others in their absence during the 30-year conflict. Restoration of legitimate land ownership provides an impetus to economic activities.

Figure A11.9: Average Court Cases Disposed Per Month (Before and After Project)

Source: Impact Assessment Survey, Borrowers Completion Report, Ministry of Justice. Averages for 2013 are derived from data for two months only.

71. Economic efficiency also results from the general public’s ease of access to the courthouses. Persons interviewed at the Mallakam courthouse stated that access was more difficult now compared to the house used earlier, mainly because fewer buses serve the location. However, this could be significantly mitigated by time saving from the faster disposal of cases.

Appendix 11 93

The issue of location was not raised at either Kayts or Chavakachcheri, which are well served by public transport. An important feature of the new courthouse complexes is the inclusion of supporting facilities that were previously inadequate or not provided. Examples include (i) a family counseling office, (ii) a probation and childcare office, (iii) a community-based correction center, (iv) a legal aid center, (v) a lawyers’ restroom, (vi) judges’ and state counselors’ chambers, and (vii) judges’ and state counselors’ residences.

72. The availability of these facilities greatly contributes to time savings and, thereby, economic efficiency. Another project-provided benefit is the furniture and office equipment, which also contributes to more efficient services for the public.

VII. OVERALL CONCLUSIONS

73. The overall targets to rehabilitate the infrastructure in conflict-affected areas were achieved, although it is difficult to measure economic efficiency in quantitative terms for most of the outputs. Where this is possible, high economic internal rates of return (EIRRs) were recorded for the road (EIRR = 19.9%) and power (EIRR = 28.6%) outputs.

74. A more rigorous analysis of the irrigation outputs was restricted by the non-use of rehabilitated tanks because of a prevailing drought at the latter stages of project implementation. However, stakeholders have high expectations of future increased productivity. Most other outputs can demonstrate less exact indicators of economic efficiency. Despite these limitations, this assessment shows that project interventions have yielded significant overall economic benefits to the target population.

Appendix 11

94

Table A11.14: Cost–Benefit Stream for Investment under Output A (Roads)

Year Capital Costs, Recurrent Costs, Economic Benefits, Net Benefits in SLRs Million

Capital Costs

Recurrent Costs

VOC Savings

VOTT Savings

NMT Benefits

Net Benefits

Discounted Benefits

2011 606.6 (1.8) 0.0 0.0 0.0 (604.8) (604.8)

2012 2,625.8 (10.2) 50.5 1.6 11.5 (2,551.9) (2,278.5)

2013 2,218.5 (2.5) (121.9) 3.6 3.2 (2,331.1) (1,858.4)

2014 774.7 (2.2) (87.0) 7.7 14.2 (837.6) (596.2)

2015 (4.8) 13.7 618.3 559.4 61.0 1,229.6 781.4

2016 - 13.5 706.2 603.6 66.4 1,362.7 773.3

2017 (2.6) 13.8 795.8 645.2 72.8 1,532.5 776.4

2018 - 14.9 848.6 689.0 74.9 1,597.6 722.7

2019 (34.7) 18.7 945.5 735.4 78.5 1,775.5 717.1

2020 (35.0) 19.4 946.6 784.3 67.8 1,814.2 654.2

2021 - 20.8 1,013.6 835.0 64.6 1,892.4 609.3

2022 (32.6) 25.2 1,116.3 885.1 70.8 2,079.5 597.8

2023 - 24.3 1,142.2 936.9 71.8 2,126.6 545.9

2024 (34.7) 28.1 1,223.8 992.0 74.4 2,296.9 526.4

2025 3,672.1 36.7 1,105.1 1,048.9 58.5 (1,496.2) (306.1)

2026 30.2 20.1 1,493.8 1,115.1 75.9 2,634.5 481.3

2027 (32.6) 22.8 1,693.7 1,173.2 85.8 2,962.6 483.3

2028 - 24.4 1,744.3 1,231.2 87.2 3,038.2 442.5

2029 (34.7) 24.6 1,923.8 1,288.3 92.6 3,314.7 431.0

2030 (35.0) 25.2 1,830.4 1,340.8 76.6 3,257.6 378.2

2031 - 27.5 1,927.9 1,383.4 74.7 3,358.4 348.2

2032 (32.6) 29.0 2,094.1 1,433.7 82.1 3,613.6 334.5

2033 - 29.1 2,083.9 1,498.3 82.8 3,636.0 300.5

2034 (1,293.2) 33.4 2,230.8 1,572.0 87.8 5,150.4 380.0

TOTAL 8,325.6 448.6 27,326.4 20,763.8 1,536.0 40,852.1 4,640.0

NPV at 12% 4,640.0

EIRR 19.9%

( ) = negative, EIRR = economic internal rate of return, NMT = non-motorized traffic, NPV = net present value, VOC = vehicle operating costs, VOTT = value of travel time. Source: Consultant’s estimates.

Appendix 11 95

Table A11.15: Cost–Benefit Stream for Investment under Output B1 (Power)

Year Capital Costs O&M Costs Line Loss (Est.) Total Costs Benefits Net Benefits

2011 287.1 - - 287.1 - (287.1)

2012 932.9 - - 932.9 - (932.9)

2013 215.3 - - 215.3 - (215.3)

2014 24.4 28.7 53.1 593.2 540.1

2015 24.4 28.7 53.1 638.1 585.0

2016 24.4 43.1 67.5 638.1 570.6

2017 24.4 71.9 96.3 638.1 541.8

2018 24.4 100.6 125.0 638.1 513.1

2019 24.4 100.6 125.0 638.1 513.1

2020 24.4 100.6 125.0 638.1 513.1

2021 24.4 100.6 125.0 638.1 513.1

2022 24.4 100.6 125.0 638.1 513.1

2023 24.4 100.6 125.0 638.1 513.1

2024 24.4 100.6 125.0 638.1 513.1

2025 24.4 100.6 125.0 638.1 513.1

2026 24.4 100.6 125.0 638.1 513.1

2027 24.4 100.6 125.0 638.1 513.1

2028 24.4 100.6 125.0 638.1 513.1

2029 24.4 100.6 125.0 638.1 513.1

2030 24.4 100.6 125.0 638.1 513.1

2031 24.4 100.6 125.0 638.1 513.1

2032 24.4 100.6 125.0 638.1 513.1

2033 24.4 100.6 125.0 638.1 513.1

2034 24.4 100.6 125.0 638.1 513.1

2035 24.4 100.6 125.0 638.1 513.1

( ) = negative, O&M = operation and maintenance. Note: Economic internal rate of return = 28.6%. Source: Consultant’s estimates.

completion report - asian development bank · completion report project number: 44065-013 loan...

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