Sri Lanka incurs massive economic loss by suspending flood control projects

Sri Lanka is facing the disastrous consequences of the previous regime’s failure to continue the implementation of strategic city development projects and river diversion irrigation and flood control schemes initiated during 2015 and 2019 periods.

Policy decisions taken to suspend such projects without any valid reasons have resulted in a massive loss of billions of rupees for the Treasury, a Finance Ministry report revealed.

The economic loss caused by Sri Lanka's landslides and floods will be between US$1.5 billion and US$2 billion, provisional data show.

The then Ministry of Megapolis and Western Development had devised a plan in 2019-2020 to upgrade the existing pumping stations and build new stations under a US $320 million project aimed at setting up an efficient flood protection system for the Colombo city while improving roads and solid waste disposal.

Denmark-based Grundfos stepped in to introduce a ‘smart’ water grid that integrates existing technologies such as sensors, rainfall measurements, automation technologies, intelligent pumping systems, data analytics and industrial Internet among other things at that time, officials of the company disclosed.

But this ambitious plan is yet to be implanted and no action has been taken up to now to control floods in Colombo.

The Matara city strategic development project was launched in 2019 with foreign assistance of US$ 65 million.

The project is aimed at the improvement of solid waste management and flood control in Matara taking into account the broader needs of the villagers, upgrading the city’s flood protection measures, adopting nature-based solutions where possible and the improvement of the storm water drainage infrastructure in the city.

The Ministry of Megapolis and Western Development initiated this Matara strategic city development project with the technical assistance of Cities Development

Initiative for Asia (CDIA) which is a multidonor trust fund managed by the Asian Development Bank (ADB).

The AFD-European Union funded window of CDIA has pledged to provide a EUR 520,000 grant for the preliminary study of the project.

Matara was the first among 12 cities to be assisted by CDIA to develop infrastructure projects with climate co-benefits under the AFD-CDIA partnership.

But the Gotabaya Rajapaksa regime bungled this important project due to their own reasons causing an immense economic loss to the country, former Minister of Megapolis and Western Development, Patalee Champika Ranawake told the Business Times.

The country also lost over Rs. 4 billion of public funds paid to China CAMC Engineering Company Ltd as the mobilisation advance for the Gin Nilwala Diversion Project (GNDP).

According to a special audit report of the Auditor General’s department on the implementation of the Gin-Nilwala Diversion Project the then Government has made a payment of a total of around Rs. 4 billion to this company during the 2015 Presidential Election period.

Up to now no action has been taken to trace the missing money or take any action against the perpetrators of financial misappropriation.