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Nation Special


Greater Colombo water supply in danger

This is further to articles published in the newspapers, since May 2005, regarding the increased demand for water, within the Greater Colombo (GC) Area. According to facts and figures published in the previous articles, it has become necessary, to increase the extraction capacity of water from the Kelani river and the production capacity of the present left bank water treatment plants or, construction of a new water treatment plant on the right bank of the Kelani river, to cater to the increased water demand.
To initiate a development project in Sri Lanka, certain requirements have to be met such as, approvals from Local Authority and Central Environmental Authority, identify source of funds, etc. Among other things, the most difficult task is the consent from the general public, who tend to think that their present lifestyle may be adversely affected, due to the implementation of development projects. Two such examples are Norochcholai and Upper Kothmale power projects. Hence, it is the prime duty of project planners and decision makers, to explain and convince the public, the benefits the country will get, due to the implementation of such development projects. If there are any disadvantages to individuals or groups of people, then the public should be made aware of these, including measures to be adopted, to resolve such problems or, minimize the downside of the projects.
The decision makers, when appointed, have several responsibilities within their authority. They are;
1. Formulating projects to meet the present and future needs of approved development programmes,
2. Identifying and formulating infrastructure facilities needed for the sustainability of these executed development projects
3. Timely implementation of the projects already approved by their predecessors, without delay.
The above situation has changed with respect to the proposed Ambatale Salinity Intrusion Barrier Project. Some of the present planners and decision makers, without communicating with the public, who are affected due to non availability of adequate water supply in the GC area, decided to change the scope of the project already accepted and approved by their predecessors. According to available information, due to the change of scope of the project, at the final stage of awarding the contract, the Asian Development Bank (ADB) has withheld the funds agreed for the project.
This decision has not been conveyed to the public up to now. According to letters issued to certain investors constructing buildings in the GC area to cater to the increased demand for space, they have been promised with adequate water supply in 2009 by the NWSDB. As an Engineer instrumental in the initiation of the construction of the salinity barrier at Ambatale, as the most economical and effective solution to meet the increasing water demand in the GC area, I feel it is my responsibility to enlighten the public of the events, in sequence that they have occurred recently, to enable them judge as to who is responsible for the outcome of this project.
Background
In this regard, the author of this article and a retired Engineer of the NWS&DB R. Ranasinghe, published an article titled “Increased Water Demand in Greater Colombo Area” in the daily papers of May 2005. This writer also published another article in the Daily News of November 9 2005, titled “Improvement to Western Province Potable Water Supply”. In response to this article, former Director General, Irrigation Department, G.T. Dharmasena, published an article in the Daily News of December 5 2005. In his article, among other things, he had focused on the construction of an impounding reservoir at Nawatha in Yatiyantota. It is appropriate to reproduce important sections of those articles, for the benefit of the readers who did not have the opportunity to read it, to read it at the end of this article. In 1998, the NWS&DB acquired around 12 acres of selected land, for the construction of a new water treatment plant in Biyagama on the right bank of the Kelani River. Foreign funds required to construct a water treatment plant of 40 million gals/day capacity also obtained and the tender for the construction is under consideration too.
When this new treatment plant is operational, it would operate only during high flows of the Kelani River. During low flows, there is a possibility of early intrusion of Salinity to the two existing water intakes located at Ambatale on the left bank of the Kelani river, about 2km downstream from the proposed new water intake.
The NWS&DB Engineers had studied all these problems and identified the necessity of the construction of the permanent Salinity Barrier at Ambatale. They convinced the then decision makers at the highest political level, planning ministry, treasury, line ministry and the Directors of the Board of Management of NWS&DB, regarding this need. Funds required for the execution of the project were obtained from the ADB, technical studies carried out by competent qualified people, consultants selected according to government procedure and designs completed. On finalizing the tender documents, tenders were invited from contractors, according to government tender procedure, evaluation carried out and the contractor recommended by the CATB to award the contract for the construction.
Change of situation
The real drama started at this point, when a few senior professionals were employed by the line ministry, as Consultants/Advisors to advice the decision makers at the line ministry regarding technical matters. In the latter part of 2005, the decision makers at the line ministry, had appointed a special committee comprising five officials: two officers from NWS&DB, one from the Department of Irrigation, one from the Water Resources Secretariat and one consultant/advisor from the line ministry, to re-evaluate the salinity barrier project. I reliably understand that the report of the committee includes the following introductory statement:
The Greater Colombo has experienced interruption of water supply on several occasions since the early nineties, as a result of saline water intrusion up to the Ambatale water treatment plant. The plant has been able to protect water supply most of the time with a temporary sandbag barrier since 1992. However, in 2004, water supply was interrupted several times in a day between 20th January and 6th March due to extreme low water flow and high tidal action. This resulted in a financial loss of Rs. 11.78 million in revenue due to the loss of production of water supply amounting to 661,000 cubic meters. The water supply interruption in Colombo was a problematic issue for the Government during the period and speedy action was requested by the authority to implement the proposed structure across Kelani River. Since the barrage is to be financed under a loan from Asian Development Bank, the design and construction documentations were completed for international contracting.
I also understand that the Secretary of the line ministry had issued a TOR to this committee, to look into seven specific issues related to the proposed structure. As indicated earlier, the NWS&DB Engineers and their consultants had studied all these issues raised by the secretary of the line ministry from 1992 and found positive economical solutions to propose this project for funding, to the finance ministry and treasury, through the then secretary of the line ministry, and in this context only, the ADB had allocated funds for this project.
According to available information, the above committee had met on seven occasions and during the meetings, experts had been invited to consult on the subject of water availability, flooding, long-term solutions and on details of construction methodology and subsurface conditions. This committee finally agreed to consider four options of construction of the salinity barrier at Ambatale:
1) As already designed
2) Same as (1) without sheet piles
3) Only sheet piles, no pile foundation with the rubber dam supported on sand bed
4) Rubber dam supported on cylinders.
The timeframe indicated by the committee was as follows:
Option 1) & 2) could commence immediately, option 3) requires additional 2 years and option 4) requires additional 3 years. The committee recommended that options 1) to 4) be addressed, before making a decision on approving an alternative to the Kelani conservation barrage (salinity barrier).
In considering the urgency of a solution and the source of finance, changes to the project require careful planning to avoid further delay in the implementation of the proposal, which may result in losing the source of finance and increased cost of capital to NWS&DB. The estimated cost of construction of the proposed salinity barrier is about Rs.700 million, including the foreign component.
By Eng. W.A. Karunarathne, former General Manager
National Water Supply & Drainage Board (NWS&DB)
(To be continued next week)

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Powdered milk price hike on the cards

59% of children under the age of one suffering from anemia

By Rathindra Kuruwita and Vindya Amaranayake
An astounding 59% of children under the age of one in Sri Lanka are suffering from anemia, a form of malnutrition.
The main contributory factor is that most mothers are using milk powder instead of breast feeding their children, said Health Ministry Nutrition Director Dr. Shanthi Gunawardene.
“Normally a family with just one child below five years of age would use at least 10 packets of milk powder a month. The price range of a packet of milk powder is between Rs. 140 to Rs. 170. Therefore, a family would have to spend around Rs. 1,400 to Rs. 1,700 a month on milk powder alone.
“Given the present economic situation where around two million families earn only Rs. 1,000 to Rs. 2,000 a month, they have no other option but to cut back. I wonder what these families would do once the proposed price hikes are implemented.”
Despite the alarming percentage of children suffering from malnutrition, Sri Lanka is once again bracing itself for yet another hike in milk powder prices. Dairy producers claim that a drought in Australia is pushing international dairy product prices to unprecedented heights.
“The severe drought in Australia, coupled with the removal of subsidies for milk in Europe have resulted in a rise in prices in the world market,” Fonterra Cooperative Group Corporate Affairs Director Chetiya Sri-Nammuni.
Fonterra is estimated to hold a 60 percent volume-based market share in Sri Lanka. In addition to its flagship Anchor brand, it also supplies milk powder to a number of other packers.
It is only natural for prices of products to increase; however, prices of all milk products in Sri Lanka have increased rapidly by large amounts and reached unbearable levels over the last three decades.
The price of a packet of milk powder weighing 400 grammes was only Rs. 6 in 1977. By 1994, it had increased to about Rs. 50.
When the People’s Alliance (PA) government came into power at that time, it levelled criticism at the United National Party (UNP) charging that 60 percent of the children below the age of five were malnourished and pledged to improve the situation.
However, the price of a 400 gramme packet increased to Rs. 100 in 2000. At present the price of a 400 gramme packet of milk powder is between Rs. 140 to Rs. 179.
The present situation
According to importers, the import price of whole milk powder which was around US$ 2,700 per metric tonne at the end of last year has now reached US$ 3,000 and they are of the opinion that the price would increase further. Importers assert it is difficult to continue production at current prices.
While a 400 gramme pack of milk powder is now retailed in Sri Lanka at prices ranging from Rs. 140 to Rs. 170, the first round of price increases is likely to see this increasing upto Rs. 165 to Rs. 185.
An industry source said that some suppliers have quoted them a two month forward price as high as US$ 3,500 a tonne. If this eventuality were to occur, it would push the price of a 400 gramme retail pack to around Rs. 200 to Rs. 225.
Trade, Marketing Development, Cooperatives and Consumer Services Minister Bandula Gunawardena told The Nation, “The main players in the industry met me and asked for a waiver of the existing nine percent import duty, at least until August. We receive appeals from every industry to increase prices every day. But that does not mean we are going to succumb to their whims without proper investigation into the cost of the product, exchange rate and other relevant factors.”
He further said, “Under Consumer Act No. 9/2003, if any company wants to increase the prices of an essential item, they must appeal to the Consumer Affairs Authority. After the proper protocol, we come to an agreement whether the prices should be increased or not. On the other hand, if the market prices demand that there is a need to increase prices, then we have no choice but to increase prices. I believe that what we need is a mechanism where prices can be adjusted both ways, up and down. I would want the importers to bring down the prices when international prices come down.”
Minister’s stance
However, the Minister is of the belief that an increase in powdered milk products would not affect a majority of the people, although that is the common belief.
“Although milk powder is listed as an essential item, not everybody in Sri Lanka drinks powdered milk. Most of the rural people prefer to have a plain tea,” he pointed out.
He went on to highlight the items that are considered essential: “It is guaranteed that kitchens in every household in Sri Lanka would have potatoes, onions, chillies and sugar at any given time, but not all households have milk powder. Therefore, I believe that a price hike in powdered milk will not affect the general public as many claim.”
Manel Gunathilake, 34, mother of two children under five begs to differ.
“My younger child is 19-months-old and the other is four-and-a-half. We consume around 12-14 packets of Anchor each month and it costs us around Rs. 4,000. It’s about one fourth of the family income and for me the price of powdered milk is very important. I will certainly feel the impact if prices are increased.”
Furthermore, it is not only families that include infants and children that consider powdered milk as an essential item.
“There is no one under five in my family, which consists of four people. But we drink a lot of tea like many Sri Lankans,” said Rachitha Vithanage of Ratmalana.
Resort to stealing
“I don’t consider myself poor and I don’t consider Rs. 4,000 to Rs. 5,000 a large amount. However, if prices go up to Rs. 225, even I will have to cut down on consumption. I really cannot comprehend how those who are undergoing financial hardship will be able to afford powdered milk. It is the responsibility of the government to minimise price hikes because I do not think any man could listen to his baby cry in hunger. If they cannot afford to buy essential items, they will resort to stealing.”
Given that over two million families in the country earn the paltry sum of Rs. 1,000 to Rs. 2,000 per month, Vithanage’s prediction has every likelihood of coming true.
K.G Sunil, who works on a contract basis in the Biyagama Free Trade Zone, the father of an infant, said, “I have a 6-month-old child. I cannot afford to give him the milk powder I drank as a child; instead I give him a cheaper variety. I heard about the proposed price hikes and I don’t know how I can continue to buy even that. I cannot cut down on the amount he drinks, can? The government should do something about this. This is not what we expected from this government.”
One of the main reasons for the increase of prices is that Australia, one of the major milk powder producers, is suffering from a year long drought with forecasts of milk production dropping by 11 percent to nine billion litres during this year.
However, according to Kotmale Holdings CEO Trevine Gomez, the root of the problem dates back to the Iraq conflict when excess stocks were sent as aid.
“They used up their surplus milk by sending it as aid during the tsunami, this decreased the stocks. In addition, recently Europe took off the US$ 250 per tonne subsidy that was in place.”
Up to the government
Although the industry expects prices to go down after August when it’s spring in the Southern Hemisphere, which brings about a rise in production in Australia and New Zealand, “it may even take up to a year for the market to stabilize” Gomez pointed out.
“Therefore, it’s up to the government,” he added.
Asked what steps the government would take to tackle this issue, Minister Gunawardena said, “If there is going to be an increase, the government would consider giving a subsidy, especially taking into account the need for children’s milk food. As a government we cannot control the price of premium brands. I have asked them to introduce a budget pack with minimal packaging to protect the poor man. In the meantime, we are planning to popularise the use of liquid milk consumption among Sri Lankans.”
He further said the government is joining with the agricultural and animal farming bodies in the country to formulate a system to promote liquid milk consumption.
“This would not only prove to be a good health practice, but would also save a considerable amount of foreign exchange. We would be able to meet milk food needs in the country itself, without having to import,” he added.
Meanwhile, Kotmale Holdings expects to keep prices below that of multinational brands by streamlining its operations, while prices of its other dairy products which are produced using local milk would also be kept steady.
Improving local
dairy industry
The price of milk was used by many politicians in the opposition to criticise governments. But no matter which party governs, the price of powdered milk has risen by leaps and bounds.
The only way to avoid shocks of this nature in the future is to improve the local dairy industry. However, since this industry has been neglected by successive governments and is presently unable to meet the existing demand, one is hard pressed to see how the proposal to popularise the use of liquid milk consumption among Sri Lankans would be realised.

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