ADB keen on more aid utilisation

Sri Lanka's aid utilisation is slightly above the Asian Development Bank average but we would like to see more utilisation of the aid we provide to the country, said Director General ADB South Asia Department Kunio Senga. He together with a five-member delegation were in Sri Lanka on a two- day visit to meet high ranking government officials to assess Sri Lanka's loan portfolio.

Treasury Secretary Dr. P. B. Jayasundera said that they requested the ADB for a full delegation so that each project, loan and grant could be evaluated to ensure that we have an active portfolio in the medium term with an improved utilisation rate. Senga said that in response to a government request the ADB and the government jointly identified nearly US$ 70 million of ADB projects to be immediately cancelled or reallocated to improve the ADB portfolio. This will result in savings to the government in commitment charges.

He said that this is a significant move because it will allow funds to be reallocated for priority areas such as water supply expansion projects in Polonnaruwa, Batticaloa and eventually in Mutur. Senga said that there is no co-relationship between the current situation in the country and the change in the portfolio. None of the ongoing projects in the North and East has been put on hold. We will be cautious when we start new projects but we will go ahead.

"We had discussions on measures to reduce bottlenecks in policy implementation and ways to focus on key sectors as identified by the government," he said. "We will respond to changing priorities set by the government for its people.

The ADB will provide additional resources to sectors which are recognised as key areas by the government." The government and ADB also discussed the agreement to expand the Colombo South Port. The ADB has already committed to finance $200 million of the total cost of $500 million for the project, which is seen as critical to boost the domestic economy.

The ADB and the Sri Lankan government agreed on measures that will help put slow moving projects on track and to forego the second tranche loan under the Power Sector Reform Program. The ADB views increased power generation, institutional reforms, and restructuring of finances of the Ceylon Electricity Board (CEB) as the key to strengthen the domestic power sector and stands ready to help the government meet these objectives.

Senga said that the ADB was concerned over the recent intensified conflict in the north and eastern parts of the country. The ADB has a number of ongoing projects in the region, including reconstruction projects in tsunami-hit areas.

The ADB's active portfolio in Sri Lanka stands at 51 loans and grants totalling $1.6 billion. The total cumulative ADB lending to Sri Lanka is about $3.7 billion.

The ADB is firmly committed to helping Sri Lanka achieve its long-term development goals and is working closely with the government to improve the implementation of ongoing projects in the country. "In the absence of peace and a conducive environment, it is challenging to implement projects. We sincerely hope that the situation stabilises and we will continue to monitor the situation and work together with the Government and other development partners," he said.

Senga reiterated that the ADB was a long-term development partner in Sri Lanka and would continue to lend full support to the government to meet its development goals.

(SG)

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Top level delegation due here

ADB will send a top level delegation this month to decide whether Sri Lanka's first major expressway spanning 128 kms from Colombo to Matara will be two or four lanes.

Director South Asia Transport and Communication K. Higuchi said that intense discussions are going on at present to decide whether it will be two or four lanes. He said that if it is going to be built as four lanes from the present two lanes they will need additional funds.