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The Asian Development Bank (ADB) and the Government of Sri Lanka yesterday signed agreements for two loan projects - the Distance Education Modernisation Project and the Secondary Towns Rural Community-Based Water Supply and Sanitation Project - amounting to US$ 105.3 million.

Secretary to the Treasury, J. Charitha Ratwatte, and ADB's Country Director in Sri Lanka, John R. Cooney, signed the agreements. A Project Agreement was also signed between ADB and the National Water Supply and Drainage Board.

The Distance Education Modernisation Project will help upgrade the country's post-secondary education system through a $45 million equivalent loan. The project aims to increase access to distance and online learning programs, and will also support the promotion of public-private partnerships to reduce pressure on public sector enrolment.

Public and private educational institutes will have opportunities for staff development, and will benefit from access to funds to provide local in-service training and curriculum development for academic programs online. The project will support the key thrusts of Government policy to make Sri Lanka computer literate, and it will stimulate value added services such as electronic government, small business connectivity and community development.

The Secondary Towns Rural Community-Based Water Supply and Sanitation Project will target five towns in the dry zones - Batticaloa, Hambantota, Mutur, Matara and Polonnaruwa - as well as rural areas of the North-Central Province.

The loan amounting to US$ 60.3 million will provide clean water to nearly one million people and improved sanitation to more than 170,000. The project will support the Government's efforts to devolve rural water supply and sanitation to the Provincial Councils and Pradeshiya Sabhas.

It will also support sector reforms, including achievement of full cost recovery, independent regulation of the water sector and increased participation of the private sector. Assistance will be provided to the National Water Supply and Drainage Board to strengthen and adapt to the ongoing sector reforms by improving its operational efficiency and its financial management.

"These projects support the Government's water supply and human resource strategies outlined in the policy document "Regaining Sri Lanka," and reflect ADB's strategy of ensuring that the assistance it provides is distributed equitably throughout the country," Cooney said.

"The Secondary Towns Rural Community-Based Water Supply and Sanitation Project will assist Sri Lanka's reconstruction efforts, including improving the access to water and sanitation in areas, such as Batticaloa and Mutur, where no investment in basic infrastructure has taken place in the last 20 years.

Similarly, the Distance Education Modernisation project will increase educational opportunities for the urban and rural students in all parts of the country who are unable to enter the conventional university system." Both project loans will be funded from ADB's concessionary window, the Asian Development Fund, and will have a 32-year term, including a grace period of eight years, with interest charged at 1.0% per year during the grace period and 1.5% per annum subsequently.

The Ministry of Policy Development and Implementation will be the executing agency for the Distance Education Modernisation Project while the National Water Supply and Drainage Board under the Ministry of Housing and Plantation Infrastructure will be the executing agency for the Secondary Towns Rural Community-Based Water Supply and Sanitation Project.

Secretary to the Housing Ministry W.D. Aillapperuma said the Government is committed to improve the quality of life and economic prosperity of providing access to safe drinking water and adequate sanitation facilities. Goals have been set to provide to safe drinking water to 85% of the population by year 2010 and to 100% by year 2025 and access to adequate sanitation by 70% of the population by year 2010 and 100% by year 2025.

The ADB funded fourth project called secondary towns and rural community based water supply and sanitation project aims to provide safe water to 969,000 people and sanitation to 171,500 people in six districts of Sri Lanka, namely, Batticaloa, Polonnaruwa, Anuradhapura, Trincomalee, Hambantota and Matara. The special features of this project are targeting the poor, support to peace process, ethnic diversity, support to decentralisation, policy reforms and sector development. Water supply schemes will be set up in Batticaloa, Mutur as well as water starved Hambantota.

The project component comprises five urban water schemes, rural water supply and sanitation system in the North Central Province and strengthening of water sector institutions. The total project cost amounts to USD 86.4 million of which ADB share is 70%, Government share is 26.6% and the community share is 3.4%. The project will be implemented in five years.

The ADB has been supporting the Government by funding several sectors for a long time.

There is already another ongoing ADB funded rural water supply and sanitation project through which about one million people will benefit. This project is implemented with the active participation of the community and a 50% physical progress has been already achieved and hoping to complete by mid year 2005. The achievement of the annual disbursement target passed 100% every year. Most of the pilot projects implemented through the Pradeshiya Sabha and every Provincial Council have also commenced in the North Central Province.

The Asian Development Bank's support to the Government in various sectors is a major share of the donor support to this country. This project will be carried out with due diligence, efficiency and in conformity with sound management, financial, engineering, environmental and public utility practices, he said.

He thanked the Asian Development Bank and the external Resources Department for promoting this project thereby increasing the access to safe drinking water and sanitation to the poor.

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