Financial Times

Sri Lanka's first super highway
Only for motor vehicles; no bicycles/pedestrians
The current design for the controversial Upper Kotmale power project is the best one taking into account environmental considerations and doesn't require any further change, according to a Japanese official involved in its funding.

Shinya Ejima, Chief Representative of the Japan Bank for International Cooperation (JBIC), said some modifications have been suggested to give some consideration to waterfalls. "The government doesn't want to suspend the project and wants to go ahead with its implementation. In the plan consideration has been made to preserve waterfalls. If someone is asking for reasonable changes, we can be flexible. But so far we think the existing plan is the best one," he told The Sunday Times FT in an interview.

This crucial power plant has been delayed for several months due to environmental concerns surrounding its impact on the waterfalls and objections by the Ceylon Workers Congress over families being dislocated. The project is funded by Japan.

Any cost overruns due to delays in the project getting off the ground? "Nobody knows the bid price until we see the bid. Since our loan is denominated in Japanese Yen we can absorb any rise in costs within the projected amount," Ejima said.

He said they had met officials from the CEB and Ministry of Power and Energy and agreed to continue to work on this project. "We think the current plan is the best and doesn't need change," he reiterated. "Upper Kotmale takes four years to complete. If we start right now completion will be by end 2008."

He said the new UPFA government hadn't sent any new proposals for funding but added that whichever government in power, the issues remain the same. Ejima said unlike some other international lending agencies, Japanese assistance is not directly linked to the budget. "This was not a surprising (government) budget for us. More or less this kind of budget was expected with various new policies already expressed in the (UPFA) election manifesto."

Lack of progress in the resumption of peace talks means the Japanese government cannot start any large-scale investment in the north and east. "We are doing small, urgent rehabilitation. We are preparing relatively large-scale reconstruction projects but the official commitment and commencement of those projects is subject to the recommencement of the peace talks," he added.

Another project with Japanese funding that hasn't got off the ground is the southern highway with some problems on land acquisition and adequate compensation still to be sorted out. While the Asian Development Bank (ADB) is funding half the section to Matara from midway of the southern highway, Japan is handling the balance portion to Colombo.

While in the ADB part construction work has begun, the Japanese-funded section is yet to begin. The northern part funded by Japan, which has a bigger loan component, is dense and there are more residents to worry about.

"The problem is with compensation claims. The Road Development Authority is accelerating compensation procedures. The government has increased the budget on compensation and I hope we can start work soon. RDA says they hope to clear all hurdles by the first quarter of next year," Ejima said.

Are these delays frustrating? "This is inevitable. There are so many affected families and this is the first highway project in Sri Lanka. This is a highway only for motor vehicles. Bicycles or pedestrians wouldn't be allowed. There will be interchanges. No houses or shops would be allowed on the highway."

Ejima said though highways are popular in other countries, this is the first highway being built since independence in Sri Lanka. "This is a totally new project. It takes time to be understood by people affected by the project and to be accepted by the people. We have had many similar issues in projects in developing countries. In those cases we have told governments to minimise the impact for affected families."

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