CABINET MEMORANDUM

APPROVAL FOR THE DEVELOPEMNT OF ZONE 6
OF MAHAWELI SYSTEM B – MADURU OYA RIGHT BANK
UNDER NAGENAHIRA NAVODAYA PROGRAMME

1. INTRODUCTION

Several efforts made since the commencement of the Mahaweli Development Programme to implement the development plans of Maduru Oya Right Bank had fallen in abeyance due to the insecurity conditions that had been prevailing in the area.

As a consequence of the clearing of the area by the Sri Lankan security forces by flushing out terrorists in July 2007, Maduru Oya Right Bank became conducive to implement development plans. Accordingly, the Government of Sri Lanka (GOSL) directed Mahaweli Authority of Sri Lanka (MASL) to commence the implementation of the development works, in Zone 6, of Mahaweli System B, immediately.

2. BACKGROUND

Since the commencement of the project formulation of the Mahaweli Ganga Development Programme various agencies under taken survey of the irrigation potential of the Mahaweli System B – Maduruoya Right Bank Project and found that the project is economically and technically feasible and several funding agencies pledged their support for the development efforts. But, the terrorist activities prevailed in the area prevented the commencement of development activities.

3. PROPOSED DEVELOPEMNT UNDER NEGENAHIRA NAVODAYA PROGRAMME

Immediately after the liberation of the Eastern Province by the security forces from the jaws of the LTTE Tiger terrorists, the GOSL decided to embark on a great humanitarian mission. Development of the East of Sri Lanka in every possible sphere is the main objective. Resettlement and development are vital components of this mission. The GOSL, set up a special programme named "Negenahira Navodaya' to achieve this task under the Ministry of Nation Building. All the government organizations concerned were assigned to carryout specific functions. In this respect MASL was assigned to implement the development of the Zone 6 of Mahaweli System B, Maduru Oya Right Bank, immediately, in order to commence cultivation in the new lands under medium size commercial farms through funding by the private sector investors. The investors are to be provided with a 20 ha. Farm-Plot with an access to water for cultivation and a motor able access to the farm plot. Until, the completion of the construction and commissioning of the necessary downstream irrigation infrastructure, prospective farmers can utilize ground water as well as stream flow as water for cultivation and livestock development. At present there is a demand from the investors for land for commercial production of crops, livestock etc. to cater the needs of the local and export markets. The Proposed project would attract the private sector to develop the area as a production base. The participation of the Private Sector in the development process will reduce the financial burden on the GOSL.

Land Capacity of the project area is as follows.

Gross Area 10,800 ha
Irrigable Area suitable for Paddy 4,497 ha & Upland 501 ha
Horticulture 1,807 ha

4. OBJECTIVES

Present development scenario for immediate development needs of Zone 6 of Mahaweli System B-RB will comprise following specific objectives.

• Economic development through commercial farming with the participation of private sector investors
• Utilization of available arable land and water resources

5. PROJECT ACTIVITIES

Following are the identified project activities

• Preparation of blocking out plans of 20 ha. lots (250 Nos.) for commercial farming
• Erection of 2 Nos. Bailey bridges
• Construction of access roads of 60 km
• Staking out of commercial farm lots
• Selection of Investors for commercial farming
• Alienation of commercial farms
• Monitoring and follow up

8. PROPOSED DEVELOPMENT CRITERIA

According to the development plans formulated by the MASL, 14,000 ha. of new lands in Zones 6,7 & 8 of Mahaweli System B-RB can be provided with water for irrigation through the Irrigation Infrastructure that were already constructed and planned to be constructed. Thus the development of Zone 6 will be implemented as an exigency while keeping the parameters of the irrigation canals and structures as planned to provide irrigation facilities to 14,000 ha. of new lands. The irrigable area of Zone 6 will be alienated among the private sector investors for development by commercial cultivation of crops, livestock and forestry, etc. Land will be allocated on a long-term lease basis to private sector for development and establishment of commercial farms. The size of a farm will be around 20 ha. Each farm will be provided with a motorable access and access to water for irrigation. Available water from Maduru Oya drainage could be utilized by the investors through lift irrigation and agro wells, constructed in their respective farmland. This system would be replaced by the proposed irrigation network, which will be constructed at a later stage by the Mahaweli Authority of Sri Lanka (MASL). More-or-less the construction of preliminary facilities will be done by the Sri Lanka Army with the assistance of the Survey Department and the Roads Development Authority coordinated through MASL. Land will be allocated in the present condition and the investor is expected to do the land clearing, on-farm development and the internal irrigation network. The total extent of land available for large farms is 4,700 ha. Number of Large Farms of 20 ha available is 250.

8.1 Procedure of Allocation of Land

Lands for commercial agricultural, livestock, and forestry projects will be allocated by calling Project Proposals from the potential investors after giving wide publicity through mass media. the project proposals will be evaluated by a committee representing relevant Ministries, and institutions such as BOI, EDB, MASL and will be forwarded for approval by the relevant authorities.

8.2 Lease Terms and Conditions

In addition to the general terms and conditions applicable to the lease document following Lease terms and Conditions will also be included.

1) Lands will be leased under the terms and conditions of the Crown Lands Ordinance. Lands will be leased for a minimum period of 30 years, actual period to be determined depending on the type of the project.

2) Lease rental will be based on the Government Chief Valuer's valuation. Four percent (4%) of the current market value of the land will be charged as the Annual Lease Rent

Annual Lease Rental will be revised every 5 years, which will not be less than 150% of the previous rental.

3) Investor should attend to all development activities of the land including land clearing, on –farm development, internal irrigation infrastructure etc. at his own cost.

4) Investor should develop the land according to project proposals and time frame given there in.
5) Investor should bear the cost of maintenance of irrigation infrastructure, land surveys and valuation.

9. POTENTIAL BENEFITS

The project would enable the development of currently unexploited and underutilized land resources in Zone 06 of Maduru Oya Right Bank in Mahaweli System B. Around 250 Nos. investors can be engaged on this development activity immediately, with a comparatively less capital investment by the state.

The project at full development would generate annually an estimated quantity of 25,000 tons. of grains, pulses, fruits, vegetables etc. In addition, there is an immense potential for livestock development and horticulture on commercial basis. Above all, expeditious implementation of the project will consolidate the great achievements made by the valiant soldiers in liberating the Eastern Province from the jaws of the LTTE entailing many indirect benefits, socially and economically.

10. CLIENT ORGANIZATION

Mahaweli Authority of Sri Lanka would be the client organization for this Project and it is responsible for overall execution of the Project, including project design, supervision, co-ordination, monitoring, technical audit etc. with the involvement of relevant line organizations.