Private sector participation in rehabilitation of irrigation projects in Sri Lanka

Abstract

The functioning of irrigation schemes at optimum efficiency levels will contribute immensely towards the economic development of Sri Lanka. The efficiency of irrigation schemes can be improved by effective designing, planning and construction and equally important proper operation and maintenance (0 & M). At present, the investments to build, operate and maintain irrigation schemes are borne by the public sector organizations in Sri Lanka. Since the Government of Sri Lanka (GOSL) faces financial difficulties for improving infrastructure facilities, even 0 & M works cannot be executed properly due to the lack of funds. The main objectives of this study are to explore the viability of private sector participation (PSP) in rehabilitating irrigation schemes and to explore feasibility of recovery of O&M costs as Irrigation Service Fees (ISF) and the possibility of recovery of rehabilitation cost as Cost Recovery Fees (CRF) from the beneficiaries. The study utilises two case studies to analyse rehabilitation of a major and a medium scale irrigation schemes in Badulla District through PSP. The case studies are analysed from the point of view of farmers, investors and national economy. The viability of implementation of project from the point of view of farmers and investors depend on the financial analysis and implementation of project by the GOSL is based on the economic analysis. This study shows that viability of PSP and the possible recovery ofISF due to improved benefits in rehabilitating irrigation schemes. The national economy can benefit through PSP in the rehabilitation of existing irrigation projects in Sri Lanka.