Review of Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project in Sri Lanka

2018:30 Sida Decentralised Evaluation

Åke Nilsson Arumugham P.K. Nalin Wikramanayake Kusum Athukorala Review of Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project in Sri Lanka

Final Report Review of Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project in Sri Lanka

Final Report September 2018

Åke Nilsson Arumugham P.K. Nalin Wikramanayake Kusum Athukorala

Sida Decentralised Evaluation 2018:30 Sida Authors: Åke Nilsson, Arumugham P.K., Nalin Wikramanayake and Kusum Athukorala The views and interpretations expressed in this report are the authors’ and do not necessarily reflect those of the Swedish International Development Cooperation Agency, Sida. Sida Decentralised Evaluation 2018:30 Commissioned by Sida Copyright: Sida and the authors Date of final report: 2018-09-21 Published by Nordic Morning 2018 Art. no. Sida62185en urn:nbn:se:sida-62185en

This publication can be downloaded from: http://www.sida.se/publications

SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Address: SE-105 25 Stockholm, Sweden. Office: Valhallavägen 199, Stockholm Telephone: +46 (0)8-698 50 00. Telefax: +46 (0)8-20 88 64 E-mail: [email protected]. Homepage: http://www.sida.se

Table of contents

Abbreviations and Acronyms ...... 5 Preface ...... 6 Executive Summary ...... 7 1 Introduction ...... 14 1.1 Background and Purpose ...... 14 1.2 Evaluation object and scope ...... 15 1.3 Evaluation questions ...... 16 2 Methodology ...... 18 2.1 Overall approach ...... 18 2.2 Selection and application of evaluation criteria ...... 18 2.3 Instruments for data collection ...... 18 2.4 Limitations ...... 19 3 Findings ...... 20 3.1 Relevance ...... 20 3.2 Efficiency ...... 26 3.3 Effectiveness ...... 34 3.4 Impact ...... 48 3.5 Sustainability ...... 55 4 Conclusions and Lessons Learned ...... 61 5 Recommendations ...... 65 Annex 1 – Terms of Reference...... 68 Annex 2 - Questionnaires ...... 74 Annex 3 - Time line ...... 77 Annex 4 - Evaluation matrix ...... 79 Annex 5 - Persons interviewed ...... 85 Annex 6 – Documentation consulted ...... 88

Abbreviations and Acronyms

ADB Asian Development Bank BOD Biological Oxygen Demand CEA Central Environment Agency CEIP Colombo Environmental Improvement Project COD Chemical Oxygen Demand EIA Environmental Impact Assessment Eng. Asst. Engineering Assistant ERD External Resources Department GPOBA Global Partnership on Out-Put Based Aid GM General Manager GoSL Government of Sri Lanka IWMI International Water Management Institute LEICDP Lunawa Lagoon Environment Improvement and Community Development Project LFA Logical Framework Approach/Analysis LKR Sri Lanka Rupee LKR Sri Lankan Rupees MCPWS Ministry of City Planning and Water Supply Mech Eng Mechanical Engineer No./Nos. Numbers NPV Net Present Value NWSDB National Water Supply and Drainage Board O&M Operation and Maintenance OECD Organisation for Economic Co-operation and Development OECD-DAC OECD - Development Assistance Committee OIC Officer in-charge Plant Tech Plant Technician SCADA Supervisory Control and Data Acquisition SEK Swedish Kroner Sida Swedish International Development Cooperation Agency SLLRDC Sri Lanka Land Reclamation & Development Corporation ToR Terms of Reference UDA Urban Development Authority US$ United States Dollars WWTP Wastewater Treatment Plant

Preface

This evaluation was contracted by the Swedish International Development Cooperation Agency (Sida) through the Framework Agreement for Evaluation Services, and conducted by FCG Sweden.

The Evaluation Team consisted of the Team Leader Åke Nilsson, working with Arumugham P.K., Nalin Wikramanayake, Kusum Athukorala. The report was quality assured by Paul Balogun and Johanna Lindström.

Executive Summary

This report presents the findings, conclusions, lessons learned and recommendations of a review of the Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project, implemented by the National Water Supply and Drainage Board (NWSDB), Sri Lanka, supported by Swedish loan and grant financing through the Swedish International Development Cooperation Agency (Sida).

The project, which was implemented during 2008 – 2016, aimed at improving the environmental conditions in two areas on the outskirts of Colombo and mitigating pollution by providing a full-fledged wastewater system comprising of sewerage, pumping, treatment and safe disposal of treated effluent and sludge, which would enhance the living conditions of the people living in the areas as well as sustain industrial development. The technical details of the Project in the two areas are shown below.

FACILITY JA-ELA/EKALA RATMALANA/MORATUWA Gravity Sewers 7.87 km/160 mm to 800 mm 25.57 km/160 mm to 1500 mm Rider Sewers 2.57 km/160 mm 10.56 km/160 mm Pumping Stations 3 4 Force Mains 3.29 km 6.14 km Plant Capacity 14,500 m3/day in 2030 25,500 m3/day in 2030 BOD1 Removal 96% 96% Nitrogen removal 79% 76% Treated Effluent Into ocean, 1100 mm/1200 mm Into river, 710 mm pipe 2.23 km discharge gravity pipe 2.16 km

An amount of US$ 95.1 million was sanctioned by Sida as an interest-free concessionary credit to the Government of Sri Lanka for the implementation of the project. This was complemented with grant funding of SEK 56.2 million for the engineer/supervision input, an output-based grant of US$ 0.1 million, and funding from GPOBA2/World Bank to an amount of US$ 3 million, of which Sida contributed with the counter value of SEK 14 million.

1 Biological Oxygen Demand 2 Global Partnership on Out-Put Based Aid

EXECUTIVE SUMMARY

The objective of the review has been “to follow up on the results and effects achieved from the implementation of the Ratmalana-Moratuwa/Ja-Ela/Ekala Wastewater Disposal Project, and that conditions stated for the financing has been fulfilled”. The report shall also provide conclusions, lessons learned and recommendations that can be taken into consideration by stakeholders and Sida in future similar projects.

The main findings in relation to OECD/DAC criteria are provided below.

The relevance of the project is considered high with regard to current as well as earlier policies and strategies of key stakeholders. It is also considered a relevant response to addressing the environmental problems in the two project areas. With regard to gender and human rights aspects, there has been a lack of awareness and competence in the project to deal with such issues proactively.

There are several issues that have limited the efficiency of the project, including serious delays caused by deficiencies in planning, contractor’s inefficiency and bankruptcy, public protest and use of defective material by the contractor. There were also serious delays in publishing audit reports. Overall, the organisation of the project is considered adequate, with the exception of staff with social profiles largely missing, particularly in the early stages of project implementation.

The project has performed well in terms of effectiveness and has produced all agreed outputs and outcomes.

Due to lack of baselines and monitoring data, it has not been possible to provide a quantitative evaluation of environmental, social and economic impacts of the project. However, an assessment has been made of organic and nutrient load removed by the wastewater treatment plants and possible effects, most of them presumably positive, have been discussed.

The sustainability of the project results is evaluated as being good.

The following main conclusions and lessons learned are arrived at:

1) The project has been successful in achieving all its agreed results at output and outcome level. This is in spite of the project having experienced an unusual amount of problems during implementation: serious technical difficulties related to the physical conditions in the two areas; a contractor that was extremely difficult to cooperate with and who had financial difficulties that influenced the quality of their operations and eventually contributed to the contractor ending up in bankruptcy, and public protests related to disturbances for some groups living and working in the two areas.

EXECUTIVE SUMMARY

With regard to the foreseen environmental, health and economic results at impact level, there is neither any useful baseline information nor the comprehensive monitoring data that would be needed to make a realistic analysis of such effects. However, an estimate of the pollutant load that has been removed as an immediate result of the project has been made as part of the review, which constitutes an actual and quantitative environmental benefit of the project.

One important reason for the high level of effectiveness of the project has been a robust and relatively independent project organisation. With some exception, the staffing profile of the project organisation has been adequate, and the project director has had the delegation to take important independent decisions on project implementation. There has been supervision and support from a competent project consultant and donor monitoring has also been strong, through an external monitoring consultant and through active participation of Sida representatives throughout the implementation, including during annual meetings.

2) The level of sustainability of the project results is considered high. The operation of the wastewater treatment plants is managed well from a technical point of view, and an analysis of costs versus revenues shows that NWSDB is currently able to meet the operation and maintenance costs through user revenues generated by the services put in place by the project. The actual introduction of tariffs for wastewater management is in itself a result of the project, which may have positive implications for sustainability in the sector as such.

There are also good indications of institutional sustainability. The project has been a pioneering effort in the wastewater management sector and is followed by similar projects in other parts of the country. The first phase of the project financed by Sida, that has been the subject of this review, will be followed by a second phase with a similar organisational set-up and with new financing partners. The coverage will be expanded in the second phase and this should lead to a further consolidation of project results.

3) The specific agreement between Sweden and the Socialist Republic of Sri Lanka contains a list of conditions for the Swedish support. The extent to which these conditions have been met is as follows: a. To implement the project and to provide resources as specified in this Agreement and the Project Document dated January 2005, particularly provide resources for and cover the costs of VAT, custom duties, land cost and house connections, estimated to the amount of US$ 17,8 millions: Yes, done. b. The responsibility for the Swedish contribution being used efficiently for purposes specified in this agreement and in the Project Document only: Yes,

EXECUTIVE SUMMARY

although some results have changed in agreement with the parties, for instance the ecosan component was changed to a component of connecting low-income housing. c. To ensure that administration and internal control of project resources are carried out: Yes, this has been done, although with some initial flaws. d. The Ministry of Finance and Planning agrees to enter into an on-lending agreement on grant basis to NWSDB. It is the intention that NWSDB will be able to charge part of the investment cost from the industries: On-lending agreement on grant basis was signed and tariffs were introduced, bur NWSDB does not have the flexibility to differentiate between systems based on their capital or operating costs or differentiate between domestic, commercial and industrial users. e. To assure that people currently living in the areas affected by the project will be resettled timely and in a correct manner and that they will receive adequate compensation for new settlements as specified in the Project Document: Yes, this has been correctly implemented. f. To ensure disposal of sludge in an environmentally acceptable method such as a sanitary land fill or composting or waste for energy option: Yes, the sludge is currently used in composting, but there is a question mark for sustainability since the current disposal set-up depends on one single operator. g. To establish a funding-facility for financing of house connections on private property, and provide a comprehensive connection plan for the private properties: No, this has not been done and yet house connections to the interested parties were given at the construction stage itself. h. To include phase 2 of the project in the investment plan of the Government of Sri Lanka: Yes, Phase 2 is slotted for implementation starting in 2019. i. To follow the enclosed scheme specific Implementation Plan for tariffs for households and industry (annex 13): The project has been effective in implementing tariffs, but not as sophisticated and full-recovery oriented as the original implementation plan, it is a general tariff system applying to all and everywhere, and for the current project only operation and maintenance costs can be covered.

3 Refers to Annex 1 in the specific agreement (not annexed to this review report).

EXECUTIVE SUMMARY

4) There have been some weaknesses in the planning and implementation of the project. Much of this has related to technical issues, but some can be traced to limited pro-active attention to participatory aspects leading to a lack of sufficient initial engagement and communication with the communities in the two areas, and lack of implementation of conditions stipulated in the environmental impact assessments carried out before the project was taken up. These conditions are related to mitigation and monitoring of social and environmental impacts during project implementation.

The project has had positive effects for most people living in the serviced areas and on industries located there. Women and the elderly are seen as particularly benefitting from the project. However, there have also been negative effects for some sections of the population. There were protests from the fishermen community during implementation, based on claims that they suffered a loss of income caused by the construction activities. These were temporary effects and the persons have been compensated. The most important negative effect of the project has probably been the odour problem that has occurred in areas close to the wastewater treatment plants. The families occupying nearby houses claim that they were not aware that odour would occur to that extent. This is a problem that needs to be addressed by NWSDB and it has been indicated that this will be done during the implementation of Phase 2, using available effective technologies.

5) Due to the lack of attention to environmental conditions in the EIAs, there has been no follow-up of the plan for environmental monitoring that was included in the EIA. If that plan had been implemented, time series of values for a number of environmental indicators could have been available today. This was a missed opportunity to establish a useful baseline for the future, which could have been used in integrated catchment planning and assessment, which is essential to achieve the maximum benefit from interventions such as the one now under review. The following main recommendations are made to NWSDB: 1) Strengthen EIA capacity (as already planned in response to recommendations made through ADB Technical Assistance) and take institutional steps in order to ascertain that results of EIAs are used optimally in implementation of projects. 2) Identify and manage environmentally and socially critical issues such as odour pollution, stakeholder engagement and communication. Resolve the odour issue at the Ja-Ela/Ekala treatment plant, and senior staff from the sewage and sociology divisions should engage as trouble-shooters in defusing current community concerns. It is recommended that some of the funds carried over to Phase 2 from the bank bond payment be used to address the odour problem.

EXECUTIVE SUMMARY

3) Include non-technical staff in similar operations: Public Relations Officer, Gender and Participation Specialist, Commercial/Legal specialist. 4) Investigate alternative tariff regimes including: a) Measurement of discharge. b) Load-based tariffs to conform to proposed load-based standards by CEA. c) Tariffs designed to promote cleaner production. 5) Carry out a risk analysis and develop a contingency plan and emergency measures at treatment plant and critical industries.

The following main recommendations are made for Phase 2 of the project: 1) Develop more specific Terms of Reference for the EIA of Phase 2 based on the experience with Phase 1. 2) Develop a detailed results framework with useful indicators, engaging top international professional expertise on results-based management. 3) Baseline and monitoring data to be selected and justified according to future evaluation questions after an analysis of the different sources of pollution in the catchment and their impacts using a framework such as the Driver-Pressure-State- Impact-Response (DPSIR) framework. 4) Ensure prior and ongoing engagement and awareness creation with communities likely to be affected by construction and operations. 5) Include international best practices for odour control and measurement.

The following recommendation is made to the External Resources Department (ERD) and national planning institutions: ERD and other planning institutions to take the lead in improving integrated planning and implementation and monitoring at the catchment level. This should be used to identify current and emerging threats to coastal wetland ecosystems, after which the most important threats can be addressed by targeted interventions, such as the current project.

The following recommendations are made to the Central Environment Agency 1) Develop ambient standards for Hydrogen Sulphide. 2) Work with NWSDB to regularize and improve management of collection system. 3) Work with NWSDB, Ministry of Industrial Development and industries towards environmental certification of industries.

The following recommendations are made to the Swedish International Development Cooperation Agency (Sida)

EXECUTIVE SUMMARY

1) In similar projects in the future, strengthen the supervision and monitoring functions with competence in social and participatory areas. 2) Support the development of a detailed results framework with useful indicators, engaging top international professional expertise on results-based management.

1 Introduction

This is the report of an end-of-project review of the Ratmalana/Moratuwa and Ja- Ela/Ekala Wastewater Disposal Project, implemented by the National Water Supply and Drainage Board (NWSDB), Sri Lanka. The review has been commissioned by the bilateral financing partner, the Swedish International Development Cooperation Agency (Sida).

The review has been carried out by a team of international and national experts who carried out data collection in Colombo and at the project sites during two periods covering a total of 4 weeks in December 2017 and February-March 2018.

Three thematic working papers presenting preliminary findings on wastewater management systems, environmental aspects, and gender, human rights and participation were prepared after the data collection phase. This review report builds substantially on the working papers, and takes into account comments received on the working papers from the main stakeholders of the review. 1.1 BACKGROUND AND PURPOSE

The evaluated project was implemented under a specific agreement between the Governments of the Democratic Socialist Republic of Sri Lanka and Sweden, signed on 2 March 2006. The agreement stipulated that an in-depth review or evaluation was to be made one year after commissioning of the projects financed by Sida. Accordingly, the parties developed and agreed on the terms of reference and procedures for the review, with an expected start by the end of 2017. The terms of reference for the review are appended in Annex 1.

According to the terms of reference, the objective of the review is “to follow up on the results and effects achieved from the implementation of the Ratmalana- Moratuwa/Ja-Ela/Ekala Wastewater Disposal Project, and that conditions stated for the financing has been fulfilled”. This objective specifies the summative part of the review, which intends to verify the effective implementation of the project.

However, it is stated in the terms of reference that the report shall also provide conclusions, lessons learned and recommendations that can be taken into consideration by stakeholders and Sida in future similar projects. This second purpose, the importance of which has been clearly emphasized in meetings with the NWSDB, is of particular importance considering that the second phase of the project is now at an advanced stage of planning and financing. 14

1 INTRODUCTION

1.2 EVALUATION OBJECT AND SCOPE The project has been implemented in the Moratuwa-Ratmalana and Ja-Ela/Ekala – which lie to the south and north of Colombo respectively. Industries have been encouraged to locate to these areas from the 1960s, due to the then low housing density, availability of land and proximity of wetlands into which waste and wastewater could be disposed. The Ekala Industrial Zone was one of the first in the country and included a central wastewater treatment plant. Industrial development accelerated after the introduction of the open economy in 1978 but at the same time the demand for housing also grew – particularly in Moratuwa-Ratmalana.

Complaints about industrial pollution increased due to the proximity of housing, pollution of streams and rivers and a general increase in environmental awareness. The first environmental law was enacted in 1980 and pollution control regulations were introduced in the following years. These regulations were not applied strictly in the two areas due to resistance from the established industries and the lack of collection and treatment facilities. Centralized sewerage was proposed, and detailed feasibility studies and Environmental Impact Assessments (EIA) were conducted in the mid 1990s under the World Bank-funded Colombo Environmental Improvement Project (CEIP). The first implementation of the projects was cancelled in the early 2000s and the projects were later selected for funding by Sida in 2003.

An amount of US$ 95.1 million was sanctioned by Sida as an interest-free concessionary credit to the Government of Sri Lanka for the implementation of the Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project. This was complemented with grant funding of SEK 56.2 million for the Engineer/Supervision input, an output-based grant of US$ 0.1 million, and funding from GPOBA4/World Bank to an amount of US$ 3 million, of which Sida contributed with the countervalue of SEK 14 million. The project, which was implemented during 2008 – 2016, aimed at improving the environmental conditions in the two areas and mitigating pollution by providing a full-fledged wastewater system comprising of sewerage, pumping, treatment and safe disposal of treated effluent and sludge, which would enhance the living conditions of the people living in the areas as well as sustain industrial development. The technical details of the Project in the two areas are shown in Table 1, and a timeline of its implementation is provided in Annex 3.

4 Global Partnership on Out-Put Based Aid

1 INTRODUCTION

Table 1 Technical details of the Project

FACILITY JA-ELA/EKALA RATMALANA/MORATUWA Gravity Sewers 7.87 km/160 mm to 800 mm 25.57 km/160 mm to 1500 mm Rider Sewers 2.57 km/160 mm 10.56 km/160 mm Pumping Stations 3 4 Force Mains 3.29 km 6.14 km Plant Capacity 14,500 m3/day in 2030 25,500 m3/day in 2030 BOD5 Removal 96% 96% Nitrogen removal 79% 76% Treated Effluent Into ocean, 1100 mm/1200 mm Into river, 710 mm pipe 2.23 km discharge gravity pipe 2.16 km

1.3 EVALUATION QUESTIONS The 24 specific evaluation questions to be answered by the review, as specified in the Terms of Reference, are listed and grouped under the respective OECD/DAC evaluation criteria in Table 2. This structure is used for the presentation of findings in Section 4. A full evaluation matrix is provided in Annex 4.

5 Biological Oxygen Demand

1 INTRODUCTION

Table 2. Evaluation questions Evaluation questions Relevance 1: Was the intervention a relevant response to address the environmental problem in its specific context? Relevance 2: Was the intervention relevant in relation to existing policies and strategies of main stakeholders? Relevance 3: Have gender and human rights aspects been duly considered in accordance with the national gender action plan and human rights policy? Efficiency 1: Has the administration and internal control of the project been satisfactory? Are the assets duly accounted for and balanced in the books of the National Water Supply and Drainage Board? Efficiency 2: Has the financing been used in an effective way? Can it be considered that Sri Lanka has got value for money? Efficiency 3: Was the organisational set-up efficient? Effectiveness 1: How has the process of increased independence for NWS&DB from the government office developed since the start of the project implementation. What are the effects of the answer to this question – positive and/or negative? Effectiveness 2: Can knowledge transfer to the executing agency be confirmed, and to what extent? Are the staff able to care for maintenance and operation of the plants and the network to guarantee the sustainability of the investment? Effectiveness 3: How many connections to the system have been established? What is the plan for future connections in phase 1 and phase 2 and when will it happen? Effectiveness 4: Which is the development of the volume of treated wastewater per year and plant since operations started? What is the planned volume for the future? Effectiveness 5: What features in the design and management of the intervention, as well as in the context, have contributed to, or mitigated against, expected good results? What could possibly have been done differently to achieve better results? Effectiveness 6: Of special interest is the follow up how the process of claiming the bonds from the bank has developed and the utilization of the amount disbursed by the bank. How has the process been handled and will the disbursed amounts be used in favour of the financed project? What are the obstacles? Effectiveness 7: To what extent have the objectives and targets of the project been met. Impact 1: What have been the effects in terms of improving the environment in the nearby coastal wetlands, Muthurajawela Marsh and Negambo Lagoon, with sensitive ecosystem of national importance? Impact 2: What have been the effects in terms of improving the health conditions for people living in areas with effects from the project? Impact 3: What have been the effects in terms of economic impact i.e. industrial-, tourist- and fishing development? Impact 4: What positive or negative effects beyond the stated objectives have there been from the project? Impact 5: Has the project had any implication for the poorer in the area? Positive and/or negative? Impact 6: Has the compensation to affected landowners been reasonable and fair? Sustainability 1: How likely is it that positive results will be sustained over time? Sustainability 2: Is a sanitary landfill established in order to handle the sludge from the treatment plants? Is it arranged in an environmentally acceptable standard? If not how will this issue be solved? Sustainability 3: Are part of the investment costs being covered from charge of tariffs from the industry? Sustainability 4: Is the project specific tariff system implemented, and are they also used in other areas, how will the tariffs be developed for the future? Sustainability 5: The development and realisation of phase 2 of the project, what is the time schedule and how far has the phase 2 proceeded?

2 Methodology

2.1 OVERALL APPROACH The review has been carried out as an objective evaluation following OECD-DAC6 criteria and guidelines. The approach has centred around the key evaluation questions specified in the Terms of Reference, complemented with questions emanating from the original project logframe and from the team’s own interpretation of what questions needed to be answered in order to evaluate the project by applying the OECD-DAC evaluation criteria.

The approach and methodology of the review has included applying evidence from several sources to draw well-founded conclusions, and specifying concrete recommendations and lessons useful for the second phase of the project that is currently underway, and for similar future projects in the country. 2.2 SELECTION AND APPLICATION OF EVALUATION CRITERIA The evaluation is based on the OECD-DAC evaluation criteria of relevance, efficiency, effectiveness, impact and sustainability, under which the evaluation questions posed in the terms of reference have been grouped. This report is structured accordingly. 2.3 INSTRUMENTS FOR DATA COLLECTION The following instruments have been used for data collection: − Desk review of documentation (see Annex 6) − Collection of technical and environmental data − Semi-structured interviews with stakeholders in Sri Lanka and Sweden − Focus group meetings − Questionnaires to persons trained under the project

6 Organisation for Economic Co-operation and Development/Development Assistance Committee

2 METHODOLOGY

− Field visits to wastewater treatment sites, industries, households and recipient areas − Inspection of technical facilities built by the project

The questionnaires that were used for the focus group meetings performed, meetings with industries, and evaluation of effects of on-the-job training events are provided in Annex 2. In total, the review contained consultation with 76 individuals representing government, civil society, private sector, industries and communities (see Annex 5). 2.4 LIMITATIONS There are limitations to being able to fully answer four of the evaluation questions.

Efficiency 2: Has the financing been used in an effective way? Can it be considered that Sri Lanka has got value for money?

It would not be possible within the time and cost frames of this review to carry out a regular value-for-money analysis since this would require a study of economy, efficiency and effectiveness for which sufficient monitoring data is not available. It was agreed during the inception phase, to assess the extent to which the project can be justified by its results, taking alternatives into account and comparing with similar projects in similar contexts. The review presents a detailed account of the effectiveness of the project, and a comparison has also been made with costs of similar projects in similar settings.

Impact 1: What have been the effects in terms of improving the environment in the nearby coastal wetlands, Muthurajawela Marsh and Negambo Lagoon, with sensitive ecosystem of national importance? Impact 2: What have been the effects in terms of improving the health conditions for people living in areas with effects from the project? Impact 3: What have been the effects in terms of: economic impact i.e. industrial-, tourist- and fishing development?

Due to the lack of baseline as well as monitoring data it was agreed during the inception phase that a quantitative evaluation would not be possible. Instead, an analysis of possible effects has been made, as was agreed. In addition, the team has estimated the organic and nutrient load removed as a result of the treatment of wastewater in the two treatment plants.

3 Findings

3.1 RELEVANCE Relevance 1: Was the intervention a relevant response to address the environmental problem in its specific context? The intervention was a relevant response to addressing the environmental problems in Ratmalana/Moratuwa and Ja-Ela/Ekala. When the entire network is completed and operational it should result in the complete cessation of all untreated and semi-treated wastewater discharges to the environment from the areas covered.

However, the intervention in isolation will not necessarily lead to an improvement of the state of the sensitive wetland ecosystems downstream of the project areas. This is because these ecosystems face many environmental threats other than wastewater disposal, such as reclamation of land and dumping of solid waste. Even when considering water pollution alone the catchment of these wetlands includes many other sources of pollution. For example, the Negombo lagoon is affected by fertilizer runoff from agricultural areas in the catchment as well as wastewater discharges from other urban areas.

Therefore, without an integrated river-basin and coastal assessment having been carried out to identify current and emerging threats to the coastal wetland ecosystems and important threats having been addressed by targeted interventions, such as the project under consideration, the extent to which the project is able to address the overall environmental problem is limited to the positive effects of reduced discharges from the actual areas covered.

Such an assessment has been done for the Negombo Lagoon and the Muthurajawela Marsh under projects under the Central Environment Agency (CEA), which included the development of a Conservation Management Plan.7 The discharge of untreated and semi-treated industrial effluent from the Ja-Ela/Ekala area was identified as a major threat to this eco-system, and this assessment was used to justify the current

7 CEA/Euroconsult, 1994: Muthurajawela Marsh and Negombo Lagoon: Conservation Management Plan, Wetland Conservation Project Report, 129 pp

3 FINDINGS

project. Projects such as sewerage of the Gampaha urban area are planned that will address some of the other threats to the eco-system.

However, once these projects are identified they are designed and implemented by individual institutions such as the NWSDB, with no coordination or monitoring at the catchment level – neither by the CEA nor by higher-level institutions such as the National Physical Planning Department.

The lack of catchment-level commitment and coordination at the highest levels also leads to contradictory development projects. For example, the expressway to the airport was routed through the Negombo Lagoon and the Muthurajawela Marsh and in violation of the CEA Conservation Management Plan, which while not having legal status was the result of high-level inter-ministerial consultations. Similarly, a skewed fertilizer subsidy policy in the late 1990’s, which has since been rectified, resulted in an increase of nutrient runoff to the lagoon.

Another example is the continued and expanded use of the uncontrolled solid waste dump at Karadiyana, in wetlands adjoining the Bolgoda River.8 The river pollution from leachate from this site would have increased continuously at the same time as the Moratuwa-Ratmanalana wastewater project was implemented to reduce the pollution caused by industrial wastewater.

Relevance 2: Was the intervention relevant in relation to existing policies and strategies of main stakeholders?

The conflict between the discharge of industrial wastewater, intakes for water supply and environmental degradation led to the adoption of two policies related to the siting of new high-polluting industries – restricting them to industrial zones with centralized wastewater collection and treatment, and not permitting any new industries upstream of existing river intakes for water supply. While the re-location of the industries in the

8 Mandakini L.L.U.; Mannapperuma N.; Bandara N.J.G.J; Silva K.D.C.C.J.;Perera M.T.C., 2016: Leachate Characterization and Assessment of Surface Water Quality near Karadiyana Solid Waste Dump Site.

3 FINDINGS

Moratuwa-Ratmalana and Ekala-Ja-Ela areas to new industrial zones was considered it was not economically viable.

The current project has in effect converted these areas into mixed industrial, residential and commercial zones with centralized wastewater collection and treatment. The project is also in accordance with the policy of developing centralized sewerage systems for densely settled urban areas. Furthermore, the location of the effluent discharge for the Ja-Ela/Ekala system has been selected so that it is downstream of the water supply intake at Raddolugama. The project is thus considered relevant in relation to all above policies of the government of Sri Lanka.

Policies related to cleaner production, such as reduction of water use, recycling of process water and re-use of wastewater, have also been adopted over the last few decades. However, the re-use of the treated effluent from the wastewater treatment plant by the industries is unlikely to be feasible due to the distances involved. Furthermore, the current system of wastewater tariffs – which is based only on an estimate of the quantity of water used by the industries – does not provide any incentive for industries to reduce the quantity of wastewater discharged or to reduce the total load of pollutants discharged.

The project was well in line with Swedish policies and strategies for development cooperation in general and with Sri Lanka in particular at the time of project conception. Relevant policy documents in this regard included the Sida country strategy for cooperation with Sri Lanka; the policy for use of credit financed development cooperation; the Swedish strategy for water supply, sanitation and hygiene; and poverty alleviation, health and environment policy directives provided in other policy and strategy documents. Issues of gender and beneficiary participation were less effectively addressed in the actual implementation of the project.

Relevance 3: Have gender and human rights aspects been duly considered in accordance with the national gender action plan and human rights policy?

Sri Lanka has a Women’s Charter (1993) which is operationalised through the Ministry of Women and Child Affairs through two arms, the Women’s Bureau and the National Council of Women. Since 2005, the Ministry has deployed Women’s Development Officers in all Divisional Secretariats to support women’s development

3 FINDINGS

activities at local level. The Sri Lankan Human Rights Commission has listed gender issues as one of its ten priority areas.

At inception, the project had received useful guidance from the Sida gender help desk9, emphasizing the overall benefits of the project for women and men in terms of improved living conditions, and promoting the involvement of women officers in the project management. It goes on to comment as follows:

“ It is however important to point out that sanitation projects cannot be viewed as gender neutral, as much research and evaluation reports show that management, technical approaches and design of facilities for water, clean or unclean, affects men and women differently “.

Though the Sida gender help desk report also flagged a series of important gender- related concerns related to the impacts on households and possible employment opportunities to be followed up by the project; it is clear from interviews with government stakeholders and beneficiaries and from project documentation study that these issues were not adequately acted upon, neither were separate assessments carried out on gendered impacts relating to the fishermen’s protest or on issues relating specifically to resettled women in Ratmalana communities. According to interviews carried out by the team, no requests were made to the Women’s Bureau or the National Council of Women for technical support for conducting gender sensitization programmes for project staff. Interviews with senior staff and study of pre-project planning and post start-up documentation also indicate a paucity of gender-centric planning sessions or social capacity building sessions held for NWSDB staff or PAPs.

As this was a pioneering activity at that time, the project monitoring systems were not designed to monitor gender, human rights or community issues, which may explain why the issues that arose related to the communities were not adequately flagged in internal project monitoring documentation.

The SWECO consultant sociologist had clearly indicated in the EIA report the possibility that livelihoods-related issues may arise among dragnet fishermen during construction, and underlined the need for continued interaction and communication of

9 Sida Gender Helpdesk, 2001: Sri Lanka Sanitet Final.

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a project social arm with the fishing community, improving their awareness of the project and monitoring their concerns as follows10:

“Discussions with the fishermen reveal that they are doubtful to the fact that no disturbances in the fishing activities can be expected, when operation of the new system has started. Therefore, further education activities for this group and possibly other groups should be performed, for instance during the construction phase of the project.”.

Nevertheless, the project team in the early stages lacked the requisite social/community development skills to address participation and communication issues in an effective way with affected communities. An interview by the review team with the EIA consultant sociologist underlined the early realization in the EIA of the possible negative impacts of non-engagement. Two subsequent interviews with the NWSDB Senior Sociologist also indicated that there had been need for specific community-related interventions for the project management. This aspect had not been addressed at inception through recruitment of professional staff with appropriate training and skills. Instead, the Project Director at that time had to spend much time in trying to resolve the fishermen issue reactively. The first written indication in project communications that there was an emerging awareness among project personnel of a strong need for a social or community specialist intervention is reflected in a letter of the Secretary, Ministry of Water Supply and Drainage, in 2010 specifically requesting the presence of a sociologist for a meeting. There was also a significant comment made by the Sida representative in an interagency committee meeting in February 2010 where she highlighted the need for a proactive approach on dialogue with the public instead of only reacting to complaints for disturbances already happening.

At the time of operationalising the project, the project did not ascertain that suitably qualified staff able to oversee gender, social and human rights concerns were recruited or made available from NWSDB. The Engineer eventually recruited a Public Relations Officer who was successful in negotiating compensation with PAPs in other affected communities, but this was in 2011, which was too late to intervene in the fishermen’s protests which were earlier in the project. When the affected fishermen first protested the construction, citing loss to the dragnet fishing, the community tensions developed beyond the control of the project. Former high-level

10 NWSDB/SWECO, 2003: Environmental Impact Assessment reports for Ratmalana/Moratuwa and Ja- Ela/Ekala (hard copies)

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NWSDB management staff and ministry professionals interviewed as part of the review (both serving and retired personnel) have stated in retrospect that the tensions created in this area could have been mitigated or even avoided had a social scientist or community development officer been deployed at the outset of the project. In February 2010, the Consultant Resident Engineer recognized the gap in project staff stating in an email communication that:

”I believe that many of these problems could be avoided if the Employer appointed somebody to facilitate the work and take care of the public in an early stage before it end with actual problems on the working Sites”

As the tensions relating to the fishermen community escalated, the Project Director strived hard to contain the issues and was finally advised by senior NWSDB staff to recruit a project level sociologist for this purpose. A junior sociologist was subsequently recruited late in the project, but it was too late to make much of a substantial change.

A strong human rights issue has been posed by odour-affected families in the Ja-Ela Nivasiepura community who were contacted several times for key informant interviews by the review team, and with whom a special focus group discussion was organised. The odour is reported as strong and pervasive, but variable in intensity11. According to key informants and the focus group interviewed, the worst affected are women and older persons who are at home all day. They complain that they have to suffer headaches, throat complaints and nausea with frequent visits to the doctor. When the odour issue started, families of communities complained to the officer-in- charge at the treatment plant without receiving any permanent redress. From then onwards several protest letters have been sent to various state officers and elected officials - the first letter was signed by 12 families in 2012; subsequently a petition signed by 600 families has been addressed to the President of Sri Lanka on the odour issue.

The project is still left with one on-going human rights case filed by fishermen with the Human Rights Commission of Sri Lanka, citing loss of livelihood. The focus group conducted at Nivasipura housing complex in Ja-Ela indicated that there is a strong possibility of another case being filed with the Human Rights Commission by the odour-affected community in Ja-Ela if the odour issue continues to persist.

11 See Effectiveness 5 for a technical discussion on the odour problem and how it was addressed in the project

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3.2 EFFICIENCY Efficiency 1: Has the administration and internal control of the project been satisfactory? Are the assets duly accounted for and balanced in the books of the National Water Supply and Drainage Board?

Has the administration and internal control of the project been satisfactory?

The specific organisation set up for the project is shown in Figure 1. The Project Director heading the project unit was delegated with power and authority for taking decisions connected with the project in accordance with general government protocols for delegation, including the day-to-day administration of the project. In addition, there was in this case also a delegation for managing procurement independently. NWSDB staff members as well as other stakeholders interviewed have underlined the importance of this relative independence for efficient handling of administrative matters, particularly procurement, as well as the fact that the project has benefitted from having competent director staying in their positions for a relatively long period of time.

Figure 1 Organisational chart for the project.

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This administrative set-up will be continued in Phase 2 with a few changes (see Sustainability 5), which is further evidence that it has been considered efficient by both the project owners and the new financing partner.

Has the Assets been duly accounted for and balanced in the books of National Water Supply and Drainage Board (NWSDB)?

Though the project was implemented by a separate project unit and dedicated book of accounts was maintained, there was no accounts team in the project organisation. An accountant stationed in the office of the Additional General Manager - Sewerage was entrusted to maintain separate book of accounts.

However, the separate book of accounts was set up only by 2010, a fact that delayed the submission of financial records for audit in the initial stages12. Fixed asset registers were opened for Ja-El/Ekala on completion of the project in 2012, and for Ratmalana/Moratuwa in 2014. It is concluded from studying the documentation available in the project office and from performing interviews with the concerned staff, that the assets have been duly accounted and balanced in NWSDB records.

Audit-Report Vs Time Taken

1000 867 800 705 556 631 607 600 485 370 400

NO OF DAYS 200 0 YEAR

2008-2009 2010 2011 2012 2013 2014 2015

Figure 2. Time taken to receive Audit reports – Years 2008 to 2015

12 As stated in the “Final Report for Financial & Management Review of Ratmalana/Moratuwa and Ja- Ela/Ekala Wastewater Disposal Project, dated 03 July 2013”

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As per documents available with NWSDB it was verified that the Auditor General has audited the financial records from 2008 to 2015. The first audit observations pertaining to the financial year 2008-2009 were reported only on 07.12.2011, that is almost two years after the year of audit. Similar delays in reporting on the annual audits occurred in the years that followed13. This is captured in Figure 2, which also shows that there is a clear trend towards shorter periods of delay towards the end of the project.

Important observations pointed out in the audit reports related to procedural flaws in accounting assets, expenses accounted under wrong headings, lack of safe disposal of sludge, non-adherence to procurement guidelines, inefficient fund management and inefficient contract management. Other issues included omission of salary paid to project staff; VAT paid and depreciation of vehicles written off as government grants; legal fees paid under work in progress; costs spent on land purchase for the project should have been accounted for under fixed assets but was accounted under a different head; and amounts payable to the Consultant and the Contractor not accounted for FY 2011.

The above account is based on study of the audit reports, combined with interviews with higher officials of NWSDB and stud of the records available in the Project Director’s office. Most of the issues pointed out by the Auditor General were eventually addressed by NWSDB, although with delays due to the late submission of audit reports, which meant that it could take almost two years or even more before the comments were published.

The division of responsibilities within the project organization in the construction phase has not been conducive to effectively addressing the environmental and social issues raised in the EIA. Under the EIA regulations, the NWSDB was the Project Proponent and the Urban Development Authority (UDA) was the Project Approving Agency. The proper EIA process was followed, and a comprehensive assessment of the environmental and social impacts together with mitigatory measures and a

13 For the Financial period 01.02.2008 -31.12.2009 – Audit report published 07.12.2011, for the Financial period 01.01.2010 -31.12.2010 – Audit report published 10.08.2012, or the Financial period 01.01.2011 -31.12.2011 – Audit report published 17.05.2014, for the Financial period 01.01.2012 - 31.12.2012 – Audit report published 24.09.2014, for the Financial period 01.01.2013 -31.12.2013 – Audit report published 30.08.2015, for the Financial period 01.01.2014 -31.12.2014 – Audit report published 30.04.2016, for the Financial period 01.01.2015 -31.12.2015 – Audit report published 17.02.2017

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comprehensive monitoring programme with oversight by a multi-stakeholder committee was included in the EIA reports (a separate one for each area).

i) The NWSDB, as the Project Proponent, was bound to ensure that the mitigatory measures and monitoring programme in the EIA reports were implemented and to have full control over any third parties (i.e. the Contractor). ii) The NWSDB should submit the contract documents pertaining to the impacts, mitigation and monitoring covered in the EIA reports to UDA. iii) The NWSDB should convene the monitoring committee and submit a monitoring plan to the UDA.

However, there is no record that conditions ii) and iii) were fulfilled. Neither is there any record that UDA made any follow-up request regarding these conditions to the NWSDB. CEA had also requested that the UDA forward the monitoring plan received from the NWSDB. This plan was not forwarded and there is no record of the CEA making any follow-up request.

Efficiency 2: Has the financing been used in an effective way? Can it be considered that Sri Lanka has got value for money?

As agreed in the inception phase of the evaluation, it would not be possible within the time and cost frames of this evaluation to carry out a regular value-for-money analysis. Instead, data on similar projects in other countries in the region have been used in order to provide a reference to the cost levels of the current project. Table 3 shows the unit cost for wastewater treatment plants, sewerage system excluded, in Oman, India and the current project, based on costs and design capacity. The cost span is substantial, from 109 US$/m3/day in one the plants in India to 3,637 US$/m3/day in one of the plants in Oman. The unit cost for the Ratmalana and Ja- El/Ekala WWTPs lies in the lower part of the span, with 623 US$/m3 of design capacity/day for Ja-El/Ekala and 442 US$/m3 of design capacity/day. The plants are relatively small in comparison with the reference projects in India, which logically gives a higher unit cost. Considering that this is a pioneering project in Sri Lanka, it is assessed that the financing has been used in an effective way.

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Table 3. Unit cost of wastewater treatment plant investment in the region. CAPACITY COST UNIT COST COUNTRY YEAR (m3/day) (US$) (US$/m3/day) 2005 57,000 71,644,156 1,257 2008 60,000 214,020,779 3,567 OMAN 2011 37,500 96,153,247 2,564 2014 18,000 65,353,247 3,637 2015 68,000 81,270,130 1,195

2000 60,000 7,113,036 119 2001 54,000 6,895,825 128 INDIA 2001 110,000 11,956,980 109 2015 120,000 13,296,228 111

Ja-El/Ekala 2012 14,500 9,040,000 623 Ratmalana 2016 25,500 11,280,000 442 Based on project documentation from Oman and India, and on up-dated Project Document for 2015

Efficiency 3: Was the organisational set-up efficient?

In the normal set up, the decision making process follows a protocol from the Project Director to Chairman NWSDB and/or Board of Directors, Secretary to Line Ministry, Minister in-charge and the Cabinet depending upon the financial limits for procurement of goods and services. In the more independent set-up applied for the project, the Project Director was vested with powers for decision making with regard to procurement of goods and services, adhering to international practices as required for completion of the project. This provided for more efficient execution, avoiding delays for approvals at higher levels (see Efficiency 1).

An organisation chart showing the main structures of NWSDB and the Project is shown in Figure 3.

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Figure 3 Organisational chart NWSDB

In spite of the flaws related to audit and EIA procedures mentioned earlier, most interviewees - NWSDB staff as well as other stakeholders - are of the opinion that with some exceptions, the staffing profile of the project organisation has been adequate. The fact that the project director has had the delegation to take important independent decisions on project implementation has added to efficiency. Supervision has been exercised by a competent project Consultant and donor monitoring has also been strong, by means of an external monitoring consultant as well as through active participation of Sida.

The disbursement of loan and grant amounts has proceeded efficiently, as shown in Figures 4 and 5. The values were taken from the Auditor’s report for the financial year ending 2015 and hence 100% values are not reflected.

Loan % Disbursed over the Years 100 95 90 90 82 85 80 68 70 60 50 50 40 32 30 20 10 0 2009 2010 2011 2012 2013 2014 2015

PERCENTAGE OF LOAN DISBURSED YEAR Figure 4 Cumulative disbursement of loan amount (in % of total loan amount) 31

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Yearwise % of Grant Disbursed 100 89 90 90

80 69 70 59 60 50 41 40 30 25 20 14 10 0 Perentahe of Grant Disbursed 2009 2010 2011 2012 2013 2014 2015 YEAR

Figure 5 Cumulative disbursement of grant amount (%)

The implementation of the project suffered delays for mainly the following reasons:

 Project planning deficiency

 Contractor’s inefficiency

 Fishermen protest

 Public protest

 Defective pipe materials used by the contractor

 Land acquisition

 Contract termination and new contract

Project Planning

The work plan was not sufficiently detailed to effectively guide the phasing of the different tasks and decisions and actions that had to be taken for execution. Limitations in reconnaissance surveys and analysis of field conditions, and permission requirements added to the delays.

Contractor’s inefficiency

The contractor underestimated the difficulties and resources needed for constructing the deep sewers under high groundwater and narrow street conditions, and had to make frequent revisions of the work program, leading to compounded delays.

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Fishermen and other public protest

There was a specific protest from the fishermen community over a period of time obstructing project execution as their livelihood were at stake (see Relevance 3 and Effectiveness 5).

In Ratmalana area there was public protest due to the work execution in deep trenches, traffic disruption and alignment of pipelines falling in the living areas of the community.

Defective Pipe materials and replacement

Due to procurement of defective pipe material by the Contractor, the works already executed had to be re-done, thereby causing delays.

Land acquisition

There was delay in acquiring the land fit for construction of the sewage pumping station. This was resolved without prolonged delay.

Contract termination and new contract

Due to bankruptcy, the contractor suddenly abandoned the works and there was no significant delay in entering into new contract for continuing the work.

As a result of the above, there was an implementation delay of around 1.5 years in the case of Ja-ela/Ekala and around 2.5 years in the case of Ratmalana.

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Quote from the Sida Monitoring Consultant: “The Contractor, J/V Pihl/Läckeby-Purac provided a comprehensive technical proposal in their tender. The documentation included references to their experience from other difficult site conditions and their physical review of the actual conditions on project locations. The Contractor made it reasonable to expect a professional execution by the international firms of high international standard. Early during the contractor´s design phase and execution it became evident that the Contractor allocated insufficient own management and technical resources. Instead the sub-contractor (engaged by the Contractor) had to carry out design and physical work without proper guidance by the Contractor. This resulted in delays in detailed design and physical works, in particular in the most difficult work sections. The main partner of the contract, Phil & Sons, had what become increasingly evident during the execution, serious financial difficulties. An oversized commercial section manned with international quantity surveyors focused on a multitude of claims for extra payments in parallel to neglect of management of the physical works. Sub-quality materials, in particular pipes were introduced leading to failures during tests and need to relay significant length of sewers. This had a major impact on the delay.”

The organizational set-up was not the best when considering the need to implement the conditions for project approval arising from the EIA. NWSDB as the Project Proponent had the legal responsibility for the implementation of the mitigatory measures and the monitoring. However, the responsibility for overseeing the implementation of the mitigatory measures was given to the Consultant and there is no evidence of clear procedures that would ensure that the NWSDB was actively overseeing these measures 3.3 EFFECTIVENESS Effectiveness 1: How has the process of increased independence for NWS&DB from the government office developed since the start of the project implementation. What are the effects of the answer to this question – positive and/or negative?

During the project preparatory stages there were indications that an administrative reform that would provide more independence for NWSDB from the government was contemplated. Such a reform was apparently not implemented. However, as mentioned earlier, an innovation in the current project was to give extensive delegated authority to the Project Director in order to fast track the progress of the project. The Project Director had the independence to directly approach the involved industries when studying their activities, internal treatment of effluent and discharge to the NWSDB network and the revenue to be generated. Previously, as per existing functions, the approvals for sewer service connection to the consumers were managed by the Operation & Maintenance Section of NWSDB, and the monitoring and assessment of revenue generated was under the jurisdiction of the commercial 34

3 FINDINGS

department. In this project the service connections and monitoring and assessment of revenue generation responsibilities were vested with the Project Director14. As stated by several senior staff of NWSDB interviewed, current and retired, the independent procedures that were applied exclusively to this project led to more effective implementation and enhanced results.

The independence of the Project Director also meant that there was a mandatory requirement that a dedicated account exclusively for this project had to be maintained so as to avoid any misappropriation of funds. This allowed transparent monitoring of the flow of funds and expenses related to the project. Initial procedural flaws in maintaining this separate account were overcome as separate accounts were opened in Oct 2010. Before this period, NWSDB maintained accounts along with other projects as in practice before as per requirement of this project separate book of accounts were opened.

Effectiveness 2: Can knowledge transfer to the executing agency be confirmed, and to what extent? Are the staff able to care for maintenance and operation of the plants and the network to guarantee the sustainability of the investment?

Training programmes were conducted as part of the contract agreement and hence the Contractor was entrusted with the work. There was no obligation in the contract to conduct a training needs analysis beforehand. Neither did NWSDB’s training wing attempt to conduct a training needs analysis. It was then a natural choice to train the staff already attached to the WWTP and in the absence of defined curriculum, trainings were conducted on trouble-shooting tasks and mostly as on-the-job training.

Since the operation of the pumping stations and the treatment and process units in the wastewater treatment plants involves specialized equipment and machinery, the contractor was tasked with conducting on-the-job training courses for the technicians and mechanics working in the WWTPs. This knowledge transfer was aimed at sustaining the direct operation and maintenance as well as providing sustainability through sharing knowledge with other staff in NWSDB. Out of a total of 287 training courses conducted, 265 were carried out as on-the-job training. The individual courses were very short, commonly only half a day or one day. Three plant technicians and one electrician in the Ratmalana WWTP attended between 249 and

14 The tariff levied is not project based and is common for all consumers throughout the country. It is not intended to cover investment costs. The revenues generated by the wastewater services provided to the consumers have been at the disposal of NWSDB and meets part or all of the operation and maintenance costs.

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265 courses. Unfortunately, in the absence of feedback forms, the effectiveness of these training programmes could not be tracked and adjustments made. For example, the trainees interviewed suggested that the training would have been more effective if they had been taught in Sinhalese and the courses reinforced by refresher courses at regular intervals.

Training like SCADA was also attended by other staff from various departments of NWSDB. In the PURAC completion report, it is reported that 49 staff members attended the trainings. Out of these 49 staff members, 35 were from other departments.

Looking forward, the training department in NWSDB is planning to conduct courses on wastewater management using in-house resources with adequate knowledge and substantial experience in wastewater. The trainees selected for such courses will have sufficient number years of service remaining before retirement and should be deployed afterwards in the wastewater section. Details of the training are shown in Figure 6 and Figure 7.

NO. OF TRAINING COURSES CONDUCTED DURING THE PERIOD FEB-2014 TO FEB-2015

33 34 35 32 31 30 27 23 24 25 21 19 20 15 15 10 9 9 10 5 NO.OF COURSES 0

MONTHS

Figure 6 Time distribution of training at Ratmalana

Figure 6 shows only participants who have attended more than 10 training courses have been considered. As can be seen from the figure, it is the staff who will be handling the day-to-day operation and maintenance of the WWTP who have attended the highest numer of training events. Hence, the training programs conducted to staff attached to WWWTP can be exptected to enable sustainability of the plant and enable knowledge transfer to other staff in NWSDB for operating and maintaining the existing plants or those that may come up in future.

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TRAINEES AND THE NO.OF COURSES(> 10) ATTENDED 350 287 287 287 287 287 287 287 287 287 287 300 265 262 260 249 250 200 150 100 35 43 50 25 24 20 24 0 TOTAL NO.OF COURSE NO.OF TOTAL

DESIGNATION OF TRAINEES Courses Attended Total no. of courses conducted

Figure 7 Categories of staff given training

The on-the-job training programme was evaluated by means of a questionnaire given in hard-copy to the participants. On the question “what effect did the training have on your ability to perform your work”, the average score on a scale from 1 to 6 where 6 represented “very positive effect” was 4.6. On the question “how capable are you right now to carry out your work”, where 6 represented “fully capable”, the average score was 5.0. Finally, on the question “how do you rate the quality of the training by Purac in general”, where 6 represented “very good quality”, the average score was 4.2.

In addition to training programmes, for the purpose of supporting knowledge transfer, NWSDB also seconded some of their staff to the Consultant (see Organogram in Figure 1). The seconded staff were engineering assistants, 4 in Ja-Ela/Ekala and 5 - 8 in Ratmalana/Moratuwa. These staff in the project were given additional benefits in the form of project allowance in addition to their monthly remuneration. The secondment of staff is shown in Table 4. Through interviews with staff, it was confirmed that the seconded staff most importantly had gained knowledge in implementation of a project of this large scale, which they had not experienced earlier.

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Table 4 Secondment of staff

YEAR RATMALANA/MORATUWA JA ELA/EKALA NWSDB Staff seconded to TOTAL NWSDB Staff seconded to TOTAL staff at The Consultant staff at The Consultant Project Project Office Office 2008 8 5 13 5 4 9 2009 8 5 13 5 4 9 2010 8 5 13 5 4 9 2011 12 8 20 5 4 9 2012 12 8 20 5 4 9 2013 12 8 20 2014 12 8 20 2015 18 - 18 2016 18 - 18

Effectiveness 3: How many connections to the system have been established? What is the plan for future connections in phase 1 and phase 2 and when will it happen?

The Project has been conceived to be implemented in two phases. The specific agreement objective and what achieved on completion of the first phase of the project (May 2016) are tabulated in Table 5. In most cases, the performance has been lower than foreseen.

Table 5 Number of connections planned and achieved.(As extracted from Project Completion Report)

CATEGORY RATMALANA/MORATUWA JA-ELA/EKALA Specific Status at Specific Status at Completion Agreement Completion of the Agreement of the Project Objective Project Objective Industries 157 126 97 98 Commercial & 96 1315 42 30 Institutions Inhabitants 25,000 20,120 9000 9000 No. of households 4,200 3,350 1,500 1,500

15 The main reason for this relatively low number is that most of the premises would have to do modification to their internal system to effect connection to the network, which they were not able to do at the time of implementation of the project.

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The explanations provided by NWSDB staff interviewed is that (i) the absence of technical feasibility i.e., existing infrastructure within the premises did not allow for be connection to the system and (ii) consumers were not able to spend what it took to get connected, or both in some cases. The progress of connections implemented is shown in Figures 8 and 9 for Ratmalana/Moratuwa and in Figure 10 for Ja-Ela/Ekala.

PROGRESS OF INDUSTRIES + INSTITUTION

CONNECTIONS IN RATMALANA/MORATUWA 500 186 219 5 78 117 0 2013 2014 2015 2016 2017

YEAR NO.OF CONNECTIONS Industries + Institution

Figure 8 Progress of Industries + Institutions connections implemented

PROGRESS OF DOMESTIC CONNECTIONS IN

RATMALANA/MORATUWA

4000 2835 3062 2210 2398 2538 2000

0 2013 2014 2015 2016 2017 NO.OF CONNECTIONS YEAR Domestic

Figure 9 Progress of domestic connections implemented

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CONNECTIONS PROGRESS IN JA-ELA/EKALA NETWORK

164 165 180 145 149 160 135 140 140 109 99 101 104 120 86 92 95 100 64 80 60 40 20 0 2012 2013 2014 2015 2016 2017 2018 Number of Connections of Number

YEAR Domestic Industries & Institutions

Figure 10 Progress of Connections to Domestic and Industries+Institutions in Ja- Ela/Ekala

Phase 2 is envisaged to provide connections to the remaining industries, commercial establishments and domestic population in both the areas in addition to those that may come up in the coming years. The system is designed assuming loads for the population estimated for 2034. In the case of Ratmalana, an additional 488 industrial and commercial houses plus 21,300 domestic connections are estimated to discharge into the system. In Ja-Ela/Ekala, the target is 180 industries and 8,690 domestic connections for next phase. Engineering design and tender documents are under preparation for Phase 2 and construction works are expected to commence in 2019, with the commissioning of the system in 2021-22.

Effectiveness 4: Which is the development of the volume of treated wastewater per year and plant since operations started? What is the planned volume for the future?

The design capacity and actual and estimated future flows for the two WWTPs are shown in Table 6.

Table 6 WWTP design capacity and wastewater flows

Location Design Capacity Present flows Estimated flows Estimated flows in m3/day Y 2030 in m3/day in m3/day Y2025 in m3/day Y2030 Ratmalana/ 25,500 7,000 24,810 26,220 Moratuwa Ja-Ela/Ekala 14,500 3,500 5,440 8,850

The present volume of wastewater treated is 7,000 m3/d. In Ratmalana/Moratuwa WWTP, which is designed to treat a maximum flow of 25,500 m3/d estimated for 40

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2030, the average wastewater flow forecast for 2025 and 2030 is 24,810 m3/d and 26,220 m3/d respectively.

The present volume of wastewater treated is 3,500 m3/d in the Ja-Ela/Ekala WWTP. The plant is designed to treat flows of 14,500 m3/d estimated for 2030. The average wastewater flow expected in 2025 and 2030 is around 5,440 m3/d and 8,850 m3/d respectively.

In the Phase 2 proposal, no expansion of the two wastewater treatment plants is foreseen. If such will be required, it will be considered and taken up at the appropriate time.

WASTEWATER FLOWS FOR DIFFERENT YEARS IN 6000000 WWTP's 5001999 Ja-Ela Ratmalana

4000000 2757546

1373387 1594223 2000000 1092064 1326040 1279034 FLOW IN CUBIC METRE 0 2014 2015 2016 2017 YEAR

Figure 11 Year-wise development of flows to WWTPs (data from NWSDB)

Figure 11 shows how the flow to the two WWTPs have developed up to 2017.

Effectiveness 5: What features in the design and management of the intervention, as well as in the context, have contributed to, or mitigated against, expected good results? What could possibly have been done differently to achieve better results?

Based on interviews with key stakeholders and study of progress reports and documentation related to the EIA and its follow-up16, it is concluded that lack of capacity related to EIA at the NWSDB, inadequate arrangements between the

16 SWECO/NWSDB, 2003/04: Environmental Impact Assessment of Ratmalana / Moratuwa and Ja-Ela / Ekala Wastewater systems. Annual Project Progress Reports. Consultant’s Monthly Progress Reports. NWSDB/Sida Supervision Contract. NWSDB/SWECO Supervision Contract.

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NWSDB and the Consultant, and inadequate follow-up by CEA and UDA resulted in the non-fulfilment of conditions related to mitigation and monitoring of environmental and social impacts during project implementation. It is probable that the non-fulfilment of these conditions contributed to significant delays due to public protest, as described in Sections Relevance 3 and Efficiency 3.

The implementation of the EIA conditions could have been more effective if the NWSDB or the Consultant had hired a national consultant – ideally the same consultants who carried out the EIA – to prepare an Environmental and Social Management Plan and monitor its implementation by the Contractor.

Odours in the collection system and treatment plants are issues all over the world and concerns were expressed by nearby residents during the EIA. However, few and insufficient specific measures related to the monitoring and control of odours were included in project design and implementation17. No odour monitoring equipment was procured or installed with the exception of one gas detector, which is meant for use inside sewers rather than to measure ambient odours.

Baseline measurements of ambient noise at the locations of the pumping stations and treatment plants were made during the EIA, in order to provide a reference against which future complaints could be compared. However, no measurements of ambient air quality – using a relevant measure such as the concentration of hydrogen sulphide – were carried out. The NWSDB does not possess any equipment for the measurement of ambient concentrations of hydrogen sulphide.

While there is no standard for hydrogen sulphide in the ambient air quality standards set out by the CEA, the ability to measure the concentration of hydrogen sulphide would provide quantitative information that can be used to evaluate the performance of odour control measures and to inform and reassure the public. Recognized best practices in odour monitoring and control could have been included in contract documents, and regular monitoring of ambient odours using appropriate

17 Major odour control measures made at the WWTPs and pumping stations included (SWECO, written communication): • Covering and installation of a polluted air suction discharge system from the inlet and preliminary treatment areas and equipment (sandwasher, screening, sludge storage tank) and the sludge treatment areas to biological odour treatment filters. • Extract ventilation fans complete with ducting and inlet and outlet louvers and provision for future odour control addition

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equipment could have been carried out in order to provide quantitative evidence with which to address public complaints.

While due to its strong technocentric focus the project was largely successful in achieving the hardware outputs of the project, it was less successful in addressing gender, participation and social issues, in spite of having guidance from a comprehensive EIA and receiving Sida guidance in these regards.

On the other hand, there was a major gap in thinking related to social, gender and human rights issues between the issues and conditions laid out in the EIA and the actual operationalization of the project, which hindered project effectiveness.

Several key stakeholders interviewed and participating in focus group meeting, representing both government and beneficiary communities, have stated that the inclusion in the project organisation of a social science arm (community development worker or sociologist) and pre-project training for project staff could have added sensitization to line staff who may have approached the community problems in a different way. They could have provided better communication with Project Affected Persons (PAPs) and functioned as an early warning system. Early deployment of community officers may have been instrumental in avoiding the crises related to construction and fishermen’s concerns.

Considering the problematic nature of community protests for the project management, it is surprising that even the readily accessible in-house social science capacity within the NWSDB was not engaged to provide understanding and counter problems. The fishermen’s issue led to unnecessary cost to the project in terms of finance, negative publicity and time. It may be possible that the fishermen’s issue was also exacerbated by interference by external political elements as was referred to in several key informant interviews, but the project laid itself open to such situations by not inducting personnel with the required skill set to deal with social and human rights issues from the outset.

Experience in this project tends to corroborate the finding of a recent ADB analysis of NWSDB18 that there are deep institutional divides in NWSDB, that were carried through into the project and that blocked the use of relevant skills in managing relations with stakeholders adversely affected by the investments.

18 ADB: Institutional development of the NWSDB

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Effectiveness 6: Of special interest is the follow up how the process of claiming the bonds from the bank has developed and the utilization of the amount disbursed by the bank. How has the process been handled, and will the disbursed amounts be used in favour of the financed project? What are the obstacles?

The process of claiming the performance bonds amount resulting from the abandoned contract has been cumbersome as the encashment was not honoured, and NWSDB had explored methods to retrieve money by legal means. As informed by NWSDB staff interviewed, on advice from high ranking government officials, NWSDB dropped any further attempt to advance by legal means, due to the reason that taking legal action is expensive and time consuming and the outcome is uncertain. Finally, an amicable settlement was found by diplomatic means, under which NWSDB received an amount of US$ 10.5 million from the bank against the original claim of US$ 19.72 million. From the amount recovered, NWSDB is planning to utilize US$ 2.397 million for unfinished work under Phase 1 of the project. The balance amount is intended to be provided for implementation of Phase 2.19 There are no further obstacles in this regard. It is assessed that this way of using the funds retrieved is appropriate since it will be in favour of finishing outstanding work under Phase 1 as well as supporting sustainability by providing additional funding to Phase 2, which is a continuation of the work done in Phase 1. Using some of the funds for addressing the odour problem has been suggested (see recommendation in Section 5).

Effectiveness 7: To what extent have the objectives and targets of the project been met.

The objective of the project was the improvement of the environment, human health and the economy in the project areas through the construction of a wastewater collection and treatment system that would discharge the treated effluent at suitable locations in accordance with the relevant standards. The primary target – the construction of a wastewater collection and treatment system – has been met. The discharge of untreated and semi-treated wastewater to the environment has ceased from all the areas covered by the project. Expansion of the coverage under Phase 2 of the project is expected to extend this benefit to a wider area.

19 Source: work plan and financial resource prepared for Phase2.

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The NWSDB has been able to implement the required discharge standards for industrial wastewater to the system and they monitor the discharges and take action against violators in conjunction with the CEA. Similarly, the NWSDB has been able to treat the collected wastewater to the required standard for discharge. The effluent quality is monitored regularly by the NWSDB and it is also monitored by the CEA for the purpose of granting the EPL to the NWSDB.

With reference to the results framework in Figure 1220, it can be concluded that Output 1.1 has been realized fully for industries and to a major extent for households, but not entirely since the connection of existing houses in the areas is not mandatory and there are limited numbers of households that have not been connected.

Outputs 1.2 and 1.3 have been achieved, although there is still a question mark for the sustainability of the current sludge management operation (see under Sustainability 1 and 2). Output 1.4 was cancelled as an output of the project in agreement with all stakeholders. These outputs, together with the fact that the final effluent meets the required standards, lead to the achievement of Outcome 1.

Water quality indicators for the effluent from the two project treatment plants and the corresponding standard values are shown in Table 7. The effluent values are well below permissible levels.

20 The Results Framework was prepared by the Review Team during the inception phase, based on a rudimentary LFA matrix that had been developed during project preparation, which did not show the causality between results at different levels. The Results Framework has been assessed as adequately describing the expected project results and their causality linkages by the Sida Monitoring Consultant (personal communication, 2018).

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Figure 12 Results framework

Table 7: Average effluent water quality of project treatment plants in 2017 compared to the current and proposed standards of CEA21 22 23

BOD5 (mg/l) TSS (mg/l) NH3-N (mg/l) Ratmalana (discharge to short sea outfall) 11 9 1.3 Standard for coastal waters 100 150 50 Draft proposed standard for coastal waters 50 75 50 (short outfall) Ekala (discharge to river) 8 19 1.6

Standard for inland waters 50 50 50

Draft proposed standard for inland waters 50 30 50

Source of data: weekly monitoring data on effluent water quality from Ratmalana and Ja-El/Ekala WWTPs

With regard to Output 2.1, data provided by NWSDB show that, when both systems are clubbed together, the average ratio between O&M costs and revenues from tariffs is 0.75 for 2017 (see Figures 13 - 15). This means that Output 2.1 as well as Outcome 2 has been achieved.

21 Regulation 1534-18 under the National Environmental Act No. 47 of 1980 22 Draft standards obtained from the Environment Protection Division of CEA 23 BOD5: Biological Oxygen Demand TSS: Total Suspended Sediments. NH3-N: Ammonia Nitrogen

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Revenue Generated Vs O&M Cost For RATMALANA/MORATAWA and JA-ELA/EKALA

146.04 200 109.34 69.58 88.97 87.49 92.67 100

Millions 0 2015 2016 2017 SRI LANKAN RUPEES inSRI YEAR Revenue Operation & Maintenance Cost

Fig 13: Revenue Generated vs O&M Costs for Ratmalana and Ja-ela WWTP

Revenue Generated Vs O&M Cost For RATMALANA/MORATAWA

86.65 100 61.96 55.11 44.58 53.47 48.28 35.34 50 14.57

0 Millions 2015 2016 2017 2018 (7 Months) SRI LANKAN RUPEES inSRI YEAR Revenue Operation & Maintenance Cost

Fig 14: Revenue Generated vs O&M Costs for Ratmalana / Moratuwa

Revenue Generated Vs O&M Cost For JA-ELA/EKALA

55.01 59.39 44.39 52.15 47.38 60 38.2134.43 39.2 31.94

40 18.48 20 0

Millions 2014 2015 2016 2017 2018 (5 Months) SRI LANKAN RUPEES inSRI YEAR Revenue Operation & Maintenance Cost

Fig 15: Revenue generated vs O&M Costs for Ja-ela/Ekala.

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Output 3.1 has been fully realized (for industries) and effective monitoring and prompt action has brought the number of notified violations to nearly zero in the past year, which leads to the achievement of Outcome 3.

With regard to the achievement of the intended impacts of the project, see Section 3.4 on Impact below. With regard to alternative ways of reaching the same results, such do not currently exist. 3.4 IMPACT

Impact 1: What have been the effects24 in terms of improving the environment in the nearby coastal wetlands, Muthurajawela Marsh and Negambo Lagoon, with sensitive ecosystem of national importance? Both project areas are in the catchment of important ecosystems consisting of wetlands and water bodies. The Ja-Ela/Ekala area drains to the northern end of the Muthurajawela Marsh and the southern end of the Negombo Lagoon. The Moratuwa- Ratmalana area drains to the Lunawa Lagoon to the west and the Bolgoda River and associated wetlands to the east.

The environmental quality of these ecosystems can be assessed using physical (water levels and hydrological regimes), chemical (water and sediment quality, pollutants in animals and plants) and biological (species abundance and diversity, ecological structure) indicators. Quantification of changes requires data before and after an intervention. If the extent of the ecosystem is large, sampling should be carried out at many locations to obtain robust indicator values. Seasonal variations have also to be considered.

Furthermore, as explained above, the state of coastal and wetland ecosystems is affected by many factors, both adjacent to the eco-system and in the catchment upstream. Linking the changes in one factor (for example wastewater discharge from the project areas) to changes in the quality of ecosystems requires quantification of all the relevant factors and at least a qualitative understanding of how all the factors affect the ecosystem in conjunction.

24 Wording has been adjusted from ”What have been the results and effects……” in the original question included in the ToR.

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When the ecosystems downstream of the project areas are considered it is found that there is little data for any indicator just before and after the project. Furthermore, the analysis of the relative importance of all the factors that affect the ecosystems has not been done in sufficient detail for any of these systems, which means that this question could not be answered even if sufficient data were available. It should be noted that while the feasibility studies and EIA reports stated as a fact that the discharge of wastewater from the project areas was affecting the ecosystems, no mention was made of other potential sources of pollution in the catchment. 25

The baseline environmental quality data presented in the reports is inadequate for any future assessment of changes. Water quality was measured just once (without considering seasonal variations) in only five locations for each of the two areas. Similarly, a list of fish species in the Bolgoda Lake is presented with no data on abundance. While groundwater pollution is expected to be reduced significantly in the project area, only a single well has been sampled. Heavy metals in sediment, which is a parameter that is relevant to industrial pollution, has not been measured.

The Lunawa Lagoon is the ecosystem for which this question can be best answered. It is relatively small and nearly the entire catchment is in the Moratuwa-Ratmalana project area. Solid waste is the only major source of pollution apart from wastewater. Detailed information on the lagoon and its catchment, including 4 years (2004 to 2008) of water quality and sediment monitoring at several locations, has been carried out under the Lunawa Lagoon Environment Improvement and Community Development Project (LEICDP). A well-planned monitoring programme before, during and after Phase 2 of the project would allow a quantification of changes in ecosystem quality.

While it is difficult to quantify the improvement of the ecosystems and then link these improvements to the project, it is possible to use the data from the treatment plant to estimate the pollutant load that is removed due to the project. This is a quantifiable environmental benefit of the project. These loads can also be compared to estimates of loads from other sources in the catchments to understand the relative significance of the intervention for the ecosystems. Table 8 shows the results of a WWTP load removal analysis for the year 2017, based on the average values of the influent and effluent flows and water quality parameters.

25 NWSDB/SWECO, 2003: Environmental Impact Assessment reports for Ratmalana/Moratuwa and Ja- Ela/Ekala (hard copies)

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Table 8 Estimates of organic and nutrient load removed by the wastewater treatment plants in 2017 (all values in metric tonnes)

Source of data: monitoring data from Ratmalana and Ja-El/Ekala wastewater treatment plants

Impact 2: What have been the effects in terms of improving the health conditions for people living in areas with effects from the project?

Prior to the project, domestic and in many cases also industrial wastewater was disposed of to the ground, and to the surface drains when ground conditions were inadequate. This would have contaminated groundwater and surface water with pathogens. The contamination would create a hazard due to direct consumption of polluted groundwater and contamination of food by various means. The project has eliminated this hazard in the areas served.

However, the actual incidence of disease is a combination (the product) of the hazard and the vulnerability. The vulnerability is dependent on factors such as the availability of alternative sources of drinking water, good hygienic practices, health status etc. A reduction of the hazard does not always result in a proportional reduction (or even any reduction) in the incidence of disease. Similarly, a reduction of disease incidence is not always due to a reduction in the hazard alone. There are also other hazards – such as poor hygiene among food preparers – that could result in the same diseases. Therefore, it is not possible to link the project to reduced disease burden without considering the changes in vulnerability even if data on the disease burden were available.

The Ministry of Health collects data on the occurrence of notifiable diseases, which include Dengue Fever, Cholera, etc. at the level of the Public Health Inspector divisions. However, data on less serious gastric diseases is not collected. It should be noted that while Cholera is a water-borne disease it has not been recorded in Sri Lanka for many years. Therefore, data to evaluate the changes in common water- borne diseases is not available.

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Example of wastewater disposal before and after the project

Before After

The two pictures above were taken at the same locality and show the situation outside the Camso Loadstar Tire Factory in Jaela Ekala before and after the project. Before the project, a total wastewater volume of 75 m3/day was discharged in open drains, causing serious health and safety risks. Neighbours were frequently complaining about bad smell coming from the drain. Today the wastewater is discharged safely in underground pipes to the wastewater treatment plant and the sidewalk is covered by concrete, addressing the issue of neighbour complaints as well as legal compliance. (Source: Fact sheet provided by the Camso Loadstar Tire Factory)

Impact 3: What have been the effects in terms of economic impact i.e. industrial-, tourist- and fishing development?

The project has had major positive economic impacts on the industries in the area. The continued functioning of many of these industries was in doubt before the implementation of the project as they were granted annual Environmental Protection Licenses on the condition that they treat their effluent to standards suitable for discharge to surface waters. Even industries that had invested in wastewater treatment faced the problem of not having suitable receiving water bodies adjacent to their premises.

In addition to improving their legal situation some industries have also benefited from reduced costs of wastewater treatment and disposal as well as the elimination of public protests and poor corporate image due to the previous haphazard disposal of wastewater. They now have the freedom to expand production, which was previously restricted due to the absence of proper wastewater treatment and disposal. The stabilization of the industries would have resulted in greater job security for their employees and an improvement of the local economy. However, it would be difficult

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to relate all these economic benefits to the project as there are many other factors involved – such as changes in the markets and the availability of labour.

The implementation of the project has also made it possible for many industries to compete at the international level through being able to obtain certification such as ISO 14001, and industry-specific standards such as Sustainable Garments (garment industry) and Responsible Care (chemical industry).

A good example is Sithro Garments, one of the largest contributors to the Ja- Ela/Ekala collection system. The company previously discharged treated wastewater to a small stream adjacent to their property. However, they had to face continuous protests from villagers downstream as well as pressure from the environmental auditors representing their international buyers. Even though their location was only scheduled to be covered under Phase 2, the company decided to construct a pipeline to connect to Phase 1 at their own expense. While this has solved their immediate problems, the certification auditors have now requested information on the eventual fate of the wastewater discharged to the collection system. The company has requested the NWSDB for the effluent quality data to pass on to the auditors.

Another example is Jefferson Garments. This company has rented the premises of a defunct company and installed its own machinery. The reason for doing so was primarily due to the ability to discharge partly treated wastewater into the collection system. If another location had been selected the cost of treatment to the required standard for discharge to inland waters would have been prohibitive.

The delays in implementation of the project has negatively impacted the most progressive companies because they invested heavily in proper wastewater treatment facilities that they do not use fully – or at all – since connecting to the system. They may be induced to resume the use of these systems if load-based standards and tariffs are implemented.

The tourism-based economy in these ecosystems is not very significant, and it is difficult to link any changes to the project. The Negombo Lagoon is reserved for small-scale fishery and no motorboats are permitted. Tourism in Negombo is primarily related to the coastal beaches north of the lagoon. The aesthetic value of the lagoon is significant for hotels along the edge. The algal blooms that occur during the rainy season affect the aesthetic values. However, these blooms are most likely linked to fertilizer runoff than any other source of pollution.

The only tourism in the Muthurujawela Marsh is the boat tours operated by the Visitor Centre and it is difficult to link any changes to the project. A far more significant change was the need to relocate the entire centre due to the construction of the highway to the airport. The Bolgoda Lake has some significance for tourism and 52

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recreation. However, these have not been quantified and will be difficult to link to the project. The Lunawa Lagoon on the other hand is likely to have increased recreational value after the LEICDP and these changes could be related to the project once post- project monitoring is done.

The Negombo Lagoon is considered to be of high value for fisheries because it supports about 3,000 small-scale fishermen as well as being the breeding ground of many species that support the coastal fishery. The major threat to the fishery is periodic algal blooms due to excess nutrients that choke the sea grass.

The fisheries in the Muthurajawela Marsh, Bolgoda Lake and Lunawa Lagoon are of lesser significance. Once again it is the Lunawa Lagoon that is most likely to yield a clear relationship between the project and the fishery once proper monitoring data is obtained.

Impact 4: What positive or negative effects beyond the stated objectives have there been from the project?

It is likely that the construction of the sewerage system has had a positive impact on land prices in the Moratuwa-Ratmalana area, which has a very high demand for housing due to the proximity to Colombo. The Local Authorities will now permit high-rise buildings because of the possibility of disposing of large quantities of wastewater to the system. Before the project, high-rise buildings were limited to the area covered by the Greater Colombo Sewerage System to the north.

The project has had a negative impact on the quality of life and property values of the housing projects immediately surrounding the treatment plant at Ja-Ela/Ekala. The residents complain that they were not informed of the possibility of a treatment plant being located in the area when they bought their houses. The unresolved odour issues at this treatment plant have aggravated this problem (see Relevance 3 and Effectiveness 5).

The living conditions of the relocated Ratmalana families in the new locations are considered far better than their original housing. Most new houses have tiled floor, ceilings and indoor bathrooms. The surroundings were less congested and not polluted. Clearly this is a positive effect of the project.

PAPs who did not relocate and who had been suffering from health issues due to unchecked release of industrial and domestic effluent prior to the project are recorded as appreciating the health benefit of the project. In particular, the women who took the brunt of care giving for children and the elderly, are seen as particularly benefitting from the project.

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Industries generally report that they are satisfied with the improved effluent discharge systems, which are more in agreement with the standards set by their overseas clients. They are also satisfied with the way NWSDB have communicated with them throughout the process of establishing the services. The average combined score on these two criteria from 8 industries in Ja-El/Ekala, randomly selected from lists of connected industries in the area, surveyed by questionnaire in connection with face- to-face interviews was 5.7 on a scale from 1 to 6, where 6 represents the highest level of satisfaction.

On the negative side, the fishermen protest posed major concerns to the project management, created negative publicity for the NWSDB and there is a case still pending with the Human Rights Commission. The odour issue experienced and protested against by the Nivasiepura community is an outstanding negative issue that remains to be settled (see Relevance 3).

Impact 5: Has the project had any implication for the poorer in the area? Positive and/or negative?

The impact on relocated families living in poverty that earlier suffered from marginalized and poor living conditions in Ratmalana due to negative environmental conditions has been financially positive and environmentally sustainable according to the TNS Lanka End-Line Evaluation Report26. Their compensation has been reasonable and fair. Families who remained in the location have benefited from the improved environment and by extension decreased health care costs.

Due to relocation to distant places, however, some families had lost access to sources of livelihood, such as through rental of rooms for boarders.

Impact 6: Has the compensation to affected landowners been reasonable and fair?

Financial compensation paid to resettled PAPs in Ratmalana is seen as satisfactory resolved by PAPs as reported in the TNS Lanka End-Line Evaluation Report. 27

26 TNS Lanka (Pvt )Ltd, 2008: Social Impact Assessment and Monitoring of the Resettlement of the families at Soysapura –End Line Evaluation Report. 27 TNS Lanka (Pvt )Ltd, 2008: Social Impact Assessment and Monitoring of the Resettlement of the families at Soysapura –End Line Evaluation Report

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The project’s original compensation plan for construction-affected landowner families in Ratmalana was first contested by the PAPs and then revised to more acceptable amounts. The key informant interviews and the TNS Lanka End-Line Evaluation report indicate that this has been fair and in keeping with the National Involuntary Resettlement Policy (NIRP)28. Most displaced families received more than LKR 1,000,000. The average amount was LKR 1,225,834. The valuation plan offered by the project was seen by the evaluators as being fair and in the PAPs best interests.

The fishermen have been compensated for loss of livelihood including the poorer fishermen who provide labour for the dragnets. Those fishermen who contested the payment still have a pending case in the HRCSL.

The Ja-Ela Nivasiepura group, both poor and rich, continues to complain about impacts due to odour with no redress or compensation. 3.5 SUSTAINABILITY

Sustainability 1: How likely is it that positive results will be sustained over time?

The wastewater collection systems and treatment plants have operated smoothly without any major breakdowns. Equipment that has failed has been replaced in a timely fashion. However, a comprehensive assessment of the equipment and clear plan for replacement under Phase 2 would improve the sustainability of the project. While the fact that tariffs are set at a national level and not project-specifically can be an impediment for financial sustainability in general (see Sustainability 3 below), the current data showing that the systems in Ratmalana and Ja-El/Ekala generate enough income to cover the O&M costs, is a good sign for the future.29 Costs for replacement, and eventually for serving of loans, should also be covered from income generated through tariffs in the long run (See discussion under Sustainability 3 below).

Staff turnover is a major problem with many projects in Sri Lanka, especially those of a technical nature. The NWSDB is aware that the knowledge base related to sewerage systems is limited when compared to that for water supply systems and has an

28 Democratic Socialist Republic of Sri Lanka, 2001: Sri Lanka National Involuntary Resettlement Policy 29 Data set with annual O&M costs and revenues up to July 2018 received from NWSDB on 22 Aug 2018

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informal policy of retaining personnel in that sector as much as possible. There are currently no formal requirements for the staff to document their knowledge and experience for the benefit of successors.

The success of the NWSDB staff in getting the industries to meet the discharge standards is largely due to the single portable Composite Sampler available at each treatment plant. Provision of an additional sampler would increase the resilience of the monitoring system. Another key element of the monitoring system is the real-time measurement of the pH of the incoming flow at the treatment plant. The monitoring would be more timely and geographically focused if the real-time measurement was extended into the collection system – for example at each pump station. This would serve the purpose of being able to provide a quick response in case the standard of the mixed sewage exceeds the standards.

The variation of inflow with time at the treatment plants show that infiltration from the surface is significant for the Moratuwa-Ratmalana system when the rainfall is very heavy. Assessment of the problem and implementation of control measures would lower costs and improve the sustainability of the system.

The wastewater treatment plant is vulnerable to sudden discharges of untreated wastewater from certain industries. While detailed information about all the industries, their processes and internal treatment has been collected during the project implementation, no comprehensive risk analysis has been done and there is no specific contingency plan for such discharges and also for pump station failures. The availability of a point of contact at the industries could also be improved in order to ensure prompt response to complaints from the NWSDB staff.

The NWSDB has decided to permit the discharge of wastewater and sludge from septic tanks – transported by truck - into the treatment plant up to 3% of the capacity of the plant. The objective is to improve the wastewater management and environment in areas not served by the sewerage system. However, according to information from staff of NWSDB, there have been instances of trucks bringing wastewater and sludge from non-domestic sources, some of which have been rejected as being unsuitable for disposal.

The sludge from the treatment plants is currently disposed of in an acceptable manner to a co-composting facility. However, the NWSDB is reliant on one single composting operator for the sludge disposal and does not have a formal contingency plan in case sludge is no longer accepted by the current receiver (see Sustainability 2).

Sustainability 2: Is a sanitary landfill established in order to handle the sludge from the treatment plants? Is it arranged in an environmentally acceptable

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standard? If not how will this issue be solved?

It was foreseen that a sanitary landfill would be established in order to handle the sludge from the treatment plants, but this has not been implemented. While the project document identified disposal to a sanitary landfill as the preferred option, the EIA identified disposal to the large scale composting facility run by Burns Environmental Technologies as the first option, with incineration in a proposed waste-to-energy plant as a second option. However, by the time the project implementation was under way, Burns Environmental Technologies had ceased operation due to equipment breakdown and the proposed sanitary landfill for the Greater Colombo area had also been cancelled.

The next option considered was disposal by incineration in the Holcim (now Insee) cement kilns. However, the water content of the sludge had to be reduced – for which solar drying facilities were constructed at both treatment plants. As the cost of disposal at the cement kilns was very high, other options – such as waste-to-energy and disposal to plantations – were investigated without success.

The NWSDB also designed a sanitary landfill, which was rejected by the CEA in 2016. By this time an official policy of co-composting as the preferred option for the disposal of sludge had been adopted and the NWSDB enlisted the help of the International Water Management Institute (IWMI) to analyse the sludge and determine the suitability of co-composting. The IWMI analysis show that the lead and zinc content is a little higher than the Sri Lanka standard (SLS 1246:2003) for compost, and therefore co-composting with organic waste in a 1:3 ratio was recommended. Further analysis of accumulation of heavy metals in plants has been recommended.

A composting operation (Green Force Agriculture) was found who were willing to accept the sludge for co-composting and disposal in this manner commenced in October 2017. Before October 2017, sludge from the Ja-Ela/Ekala treatment plant was disposed to a manufacturer of gardening compost and also disposed of on plantation lands. The sludge from the Ratmalana/Moratuwa plant was disposed to the uncontrolled solid waste dump of the Moratuwa Municipal Council. It should be noted that the classification of Hazardous Waste under Sri Lankan regulations (and international practice) is according to specific waste streams, and the sludge from these treatment plants does not fall into that category.

Sustainability 3: Are part of the investment costs being covered from charge of tariffs from the industry?

The NWSDB currently has a single tariff regime for all sewerage systems, regardless of scale and whether the discharge is domestic or industrial. This tariff was approved

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by the Government after a great deal of opposition from those who viewed it as an additional burden. However, the tariff does not give the NWSDB the flexibility to differentiate between systems based on their capital or operating costs or differentiate between domestic, commercial and industrial users.

The tariff is only dependent on the volume of wastewater discharged, which is estimated based on water use. There is no measurement of the discharge to the system. Some industries that use water for purposes that do not result in wastewater complain that their discharge is overestimated.

This method of estimating the quantity of discharge, coupled with the concentration- based effluent standards mean that industries have less incentive to move to more sustainable cleaner production methods, which are aimed at reducing both the quantity of wastewater discharged and the total load of pollutants per unit of production.

The revenue generated from the industries and households is currently not sufficient to cover investment costs. Tariffs should optimally be so developed that they are specific to a project and applicable to all beneficiaries of the project, then they could possible cover at least part of the investment costs. The current tariffs are those gazetted by GoSL and are common for all users throughout the country. They are based on national statistical data on how much a family can set aside for expenses on water and wastewater services. It has been assumed that consumers will be able to spend 5% of their income for paying utilities such as water, wastewater and electricity.

Sustainability 4: Is the project specific tariff system implemented, and are they also used in other areas, how will the tariffs be developed for the future?

While wastewater treatment had not implied any cost to users earlier, tariffs were decided on by the government and introduced during implementing the current project. The introduction of tariffs for wastewater treatment is by several NWSDB staff members and others interviewed seen as a direct result of the current project being implemented and thereby creating the possibility of tariff collection. Proposals to implement project-based tariffs have not been implemented. The tariffs now in force are common for all users irrespective of areas or projects and are approved by the Parliament and published in the Government Gazette. This governs also for the project areas of Ratmalana/Moratuwa and Ja-Ela/Ekala.

Differential tariffs based on effluent characteristics would potentially fetch more substantial revenues if adopted in future projects. It is for the publicly elected representatives to make recommendations for such project-specific tariffs to be approved by the Parliament and then implemented.

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Following document review and meetings with NWSDB staff, the following points can add to a discussion on relevant tariffs in relation to cost recovery for investment and operation and maintenance.

The following criteria and components should be considered for arriving at tariffs.

1. Based of quantity discharged 2. Based on COD30 load since industries are connected 3. Investment cost 4. O&M Costs – NPV31 5. Consumer willingness and ability to pay 6. Use of financial models with different options and scenarios.

Sustainability 5: The development and realisation of phase 2 of the project, what is the time schedule and how far has the phase 2 proceeded?

The planning of phase 2 of the project is advanced and the three-year project is expected to start in 2019 with financial and technical support from French Development Agency (AFD) . The project aims to extend the wastewater collection systems in Ratmalana and Moratuwa. It will include the construction of 95 km of sewage collection network; the construction of seven pumping stations and improvement of equipment at Moratuwa Treatment Plant; the construction of 11,000 household connections and 580 commercial and industrial connections; and campaigns to promote sanitation and hygiene awareness. The total cost is estimated at EUR 105.5 million.32

The project, which will be implemented by a project implementation unit at NWSDB, is expected to provide about 44,500 persons with access to communal sanitation service. It will increase the proportion of treated wastewater in the targeted areas and thus contribute to improving the sanitary conditions of the populations as well as preserving the coastal ecosystems. The organisational chart of the project implementation unit includes the post of a sociologist as well as an accounts section.

The project financing partner has shown an interest in addressing critical issues that were encountered in phase 1 of the project, including the odour issues and developing

30 COD = Chemical Oxygen Demand 31 NPV = Net Present Value 32 AFD, 2017: Ratmalana/Moratuwa Wastewater Disposal Project

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environmental and social baseline information for use in future monitoring and evaluation of impacts.33

AFD has shown their willingness to finance Ja-Ela/ Ekala - Phase II, provided NWSDB come up with detailed design and other requirements, such as EIA approval and land acquisition by end of 2019.

33 Martin Parent, AFD: Personal communication.

4 Conclusions and Lessons Learned

Based on the findings presented in the previous sections, the following main conclusions and lessons learned are arrived at:

1. The project has been successful in achieving all its agreed results at output and outcome level. This is in spite of the project having experienced an unusual amount of problems during implementation: serious technical difficulties related to the physical conditions in the two areas; a contractor that was extremely difficult to cooperate with and who had financial difficulties that influenced the quality of their operations and eventually led to bankruptcy, and public protests related to disturbances for some groups living and working in the two areas.

With regard to the foreseen environmental, health and economic results at impact level, there is neither any useful baseline information nor the comprehensive monitoring data that would be needed to make a realistic analysis of such effects. However, an estimate of the pollutant load that has been removed as an immediate result of the project has been made as part of the review, which constitutes a quantitative environmental benefit of the project.

One important reason for the high level of effectiveness of the project has been a robust and relatively independent project organisation. With some exception, the staffing profile of the project organisation has been adequate, and the project director has had the delegation to take important independent decisions on project implementation. There has been supervision and support from a competent project Consultant and donor monitoring has also been strong, through an external monitoring consultant and through active participation of Sida representatives throughout the implementation, including during annual meetings.

2. The level of sustainability of the project results is considered high. The operation of the wastewater treatment plants is managed well from a technical point of view, and an analysis of costs versus revenues shows that NWSDB is currently able to meet the operation and maintenance costs through user revenues generated by the services put in place by the project. The actual introduction of tariffs for wastewater management is in itself a result of the project, which may have positive implications for sustainability in the sector as such.

4 CONCLUSIONS AND LESSONS LEARNED

There are also good indications of institutional sustainability. The project has been a pioneering effort in the wastewater management sector and is followed by similar projects in other parts of the country. The phase of the project that has been the subject of this review will be followed by a second phase with a similar organisational set-up and with new financing partners. The coverage will be expanded in this phase and this should lead to a further consolidation of project results.

3. The specific agreement between Sweden and the Socialist Republic of Sri Lanka contains a list of conditions for the Swedish support. The extent to which these conditions have been met is as follows: a. To implement the project and to provide resources as specified in this Agreement and the Project Document dated January 2005, particularly provide resources for and cover the costs of VAT, custom duties, land cost and house connections, estimated to the amount of USD 17,8 millions: Yes, done. b. The responsibility for the Swedish contribution being used efficiently for purposes specified in this agreement and in the Project Document only: Yes, although some results have changed in agreement with the parties, for instance the ecosan component was changed to a component of connecting low-income housing. c. To ensure that administration and internal control of project resources are carried out: Yes, this has been done, although with some initial flaws. d. The Ministry of Finance and Planning agrees to enter into an on-lending agreement on grant basis to NWSDB. It is the intention that NWSDB will be able to charge part of the investment cost from the industries: On-lending agreement on grant basis was signed and tariffs were introduced, bur NWSDB does not have the flexibility to differentiate between systems based on their capital or operating costs or differentiate between domestic, commercial and industrial users. e. To assure that people currently living in the areas affected by the project will be resettled timely and in a correct manner and that they will receive adequate compensation for new settlements as specified in the Project Document: Yes, this has been correctly implemented. f. To ensure disposal of sludge in an environmentally acceptable method such as a sanitary land fil] or composting or waste for energy option: Yes, the sludge is currently used in composting, but there is a question mark for sustainability since the current disposal set-up depends on one single operator. g. To establish a funding-facility for financing of house connections on private property, and provide a comprehensive connection plan for the private

4 CONCLUSIONS AND LESSONS LEARNED

properties: No, the funding facility was not set up but house connections to the interested parties were given at the construction stage itself. h. To include phase 2 of the project in the investment plan of the Government of Sri Lanka: Yes, Phase 2 is slotted for implementation starting in 2019. i. To follow the enclosed scheme specific Implementation Plan for tariffs for households and industry (annex 134): The project has been effective in implementing tariffs, but not as sophisticated and full-recovery oriented as the original implementation plan, it is a general tariff system applying to all and everywhere, and for the current project only operation and maintenance costs can be covered.

4. There have been some weaknesses in the planning and implementation of the project. Much of this have related to technical issues, but some can be traced to limited pro-active attention to participatory aspects leading to a lack of sufficient initial engagement and communication with the communities in the two areas, and lack of implementation of conditions stipulated in the environmental impact assessments carried out before the project was taken up. These conditions are related to mitigation and monitoring of social and environmental impacts during project implementation.

5. Due to the lack of attention to environmental conditions in the EIAs, there has been no follow-up of the plan for environmental monitoring that was included in the EIA. If that plan had been implemented, time series of values for a number of

34 Refers to Annex 1 in the specific agreement (not included in this review report).

4 CONCLUSIONS AND LESSONS LEARNED

environmental indicators could have been available today. This was a missed opportunity to establish a useful baseline for the future, which could have been used in integrated catchment planning and assessment, which is essential to achieve the maximum benefit from interventions such as the one now under review.

5 Recommendations

Based on the findings of the current evaluation, the below recommendations are made.

For NWSDB

The following five main recommendations are made to NWSDB:

1) Strengthen EIA capacity (as already planned in response to recommendations made through ADB Technical Assistance) and take institutional steps in order to ascertain that results of EIAs are used optimally in implementation of projects. 2) Identify and manage environmentally and socially critical issues such as odour pollution, stakeholder engagement and communication. Resolve the odour issue at the Ja-Ela/Ekala treatment plant, and senior staff from the sewage and sociology divisions should engage as trouble-shooters in defusing current community concerns. It is recommended that some of the funds carried over to Phase 2 from the bank bond payment be used to address the odour problem. 3) Include non-technical staff in similar operations: Public Relations Officer, Gender and Participation Specialist, Commercial/Legal specialist. 4) Investigate alternative tariff regimes including: a) Measurement of discharge. b) Load-based tariffs to conform to proposed load-based standards by CEA. c) Tariffs designed to promote cleaner production. 5) Carry out a risk analysis and develop a contingency plan and emergency measures at treatment plant and critical industries.

In addition, it is recommended to:

6) Invest in odour measurement equipment (hydrogen sulphide and other parameters) 7) Require industries to maintain a 24-hour “hotline” to receive notifications about violations and identify designated persons to respond to notifications 8) Improve control over wastewater and sludge delivered by truck to the treatment plants 9) Work with industries and CEA to help industries achieve environmental certification

5 RECOMMENDATIONS

10) Plan for staff turnover and require staff to document their knowledge and experience 11) Involve academic and research institutions to support knowledge development and management

For Project Phase 2

The following five major recommendations are made for Phase 2:

1) Develop more specific Terms of Reference for the EIA of Phase 2 based on the experience with Phase 1. 2) Develop a detailed results framework with useful indicators, engaging top international professional expertise on results-based management. 3) Baseline and monitoring data to be selected and justified according to future evaluation questions after an analysis of the different sources of pollution in the catchment and their impacts using a framework such as the Driver-Pressure-State- Impact-Response (DPSIR) framework. 4) Ensure prior and ongoing engagement and awareness creation with communities likely to be affected by construction and operations. 5) Include international best practices for odour control and measurement.

In addition, it is recommended to:

6) Carry out a detailed outfall study including verification against current situation 7) Develop a detailed and specific implementation plan so as to guide and make it possible to adjust in the implementation plan(s) provided by Contractor/recommended by the Consultant. 8) Combine existing data with new measurements to evaluate the impact of the project on the Lunawa Lagoon (see Impact 1) 9) Review the performance of the collection and treatment systems and include upgrades as required 10) Enhance system monitoring by including real time sensors at pump stations and in the network

For the External Resources Department (ERD) and national planning institutions

1) ERD and other planning institutions to take the lead in improving integrated planning and implementation and monitoring at the catchment level. This should be used to identify current and emerging threats to coastal wetland ecosystems, after which the most important threats can be addressed by targeted interventions, such as the current project.

5 RECOMMENDATIONS

For the Central Environment Agency (CEA)

1) Develop ambient standards for Hydrogen Sulphide. 2) Work with NWSDB to regularize and improve management of collection system. 3) Work with NWSDB, Ministry of Industrial Development and industries towards environmental certification of industries.

For the Swedish International Development Cooperation Agency (Sida)

Annex 1 – Terms of Reference

ANNEX 1 – TERMS OF REFERENCE

Annex 2 - Questionnaires

Nivasipura focus group discussion 1/3/18 1. What is your name /address ? 2. When did you come in to residence? 3. Was the system operational then? 4. Did you anticipate a problem? 5. When did you begin to have a problem 6. Does it affect all or only those near the treatment plant? 7. When is the odour prevalent- all the time, sometime , when the gulley bowsers are offloading? 8. When and how did you start protesting to the NWSDB? What was their response? 9. Was the issue settled fully/partially / partially only for a period 10. When did you last have an issue? What was the issue? 11. Was there a solution ? 12. What would you suggest to the NWSDB in connecting/communicating with the NWSDB in future projects ?

Questionnaire for selected industries 1. How long have your company/industry existed? Has there been any change in ownership and management? 2. Any changes in processes and effluent discharges? 3. What was the wastewater disposal system before you were connected? 4. Did you have any problems with the community nearby? 5. Did you have problems with authorities before you were connected? 6. Have you had any problem with the sewerage not working? 7. Have you been notified of any violation? 8. How were you consulted in the planning and implementation of the system? 9. Is the fact that you are connected to the wastewater disposal system good for your business? 10. When was your last communication with the NWSDB and what was the topic? 11. How much are you paying for the wastewater services? 12. Whether your discharge is dependent on variations in your production line? 13. What sort of pre-treatment are you doing? 14. How often do you measure the COD and what are the variations in the COD values? 15. Do you have separate dedicated systems for industrial wastewater and for domestic wastewater? 74

ANNEX 2 – QUESTIONNAIRES

16. On a scale from 1 to 6, where 6 represents the highest appreciation, what is your appreciation of: - How NWSDB communicated with you? - The project as such?

Questionnaire on training Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project 01 March 2018

Issued by the Sida Project Review Team.

Responses are collected and processed in full confidentiality by the Review Team.

Place of work: Work position: Gender:

1) How many years have you worked with NWSDB?

Please tick

< 1 year 1 - 5 > 5 years years

2) How many training events organised by Purac did you participate in?

3) Did you ever repeat the same training? How many times for what trainings?

4) On what topic(s) did you receive training?

Topic Number of events

ANNEX 2 – QUESTIONNAIRES

5) On a scale from 1 to 6 where 1 is “no effect at all” and 6 is “very positive effect”, what effect did the training have on your ability to perform you work?

Please tick 1 2 3 4 5 6

6) On a scale from 1 to 6 where 1 is “not at all capable” and 6 is “fully capable”, how capable are you right now to carry out your work?

Please tick 1 2 3 4 5 6

7) On a scale from 1 to 6 where 1 is “very low quality” and 6 is “very good quality”, how do you rate the quality of the training by Purac in general?

Please tick 1 2 3 4 5 6

8) On what topic(s) do you think that NWSDB need to organise more trainings in order to improve the operations of the treatment plant or wastewater system in general?

9) What kind of training should it be

Type of training Please tick On-the-job training Lectures Lab training Theoretical training Other, please specify

Annex 3 - Time line

2018 Project Review Presentation Event

Project Review Main Mission Project Review Inception Mission 2017

2016

Ratmalana pipeline network completed. Ratmalana delayed by 2.5 years

2015

Ratmalana WTP completed

2014

New contract with Purac/New contract with CGC Contract terminated and disputed by both parties 2013 Wastewater released into Ratmalana plant

2012

Work in Ja-Ela/Ekala completed Ja-ela delayed by 1.5 years.

Anticipated Project completion 2011

ANNEX 3 – TIME LINE

2010

2009

2008 Sweco supervision contract starts Contractor starts work Credit agreement signed 2007 Contract award to Pihl/Läckeby-Purac

2006 Tendering process starts

2005 Internal Sida assessment

Project document ready

2004 EIA reports completed

2003 Sida appraisal mission

2002

Sida desk review of feasibility studies 2001 Enquiry for support from GoSL to Sida

Annex 4 - Evaluation matrix

Evaluation Evaluation questions Indicators Data collection Sources of Comments criteria instruments information Relevance R1 Was the intervention a relevant response to Perception of relevance among Documents Feasibility studies Documentation expected to be available address the environmental problem in its project owners, boundary partners EIAs specific context? and beneficiaries Wetland Site Reports & Management Plans MRST Interviews35 ERD CEA Ministry of Environment SLLRDC Ministry of Health, Nutrition and Indigenous Medicine Min Plan Implement Ministry of Urban Development R2 Was the intervention relevant in relation to Alignment with key national policy Documents MCPWS Documentation expected to be available

35 All interviews are semi-structured unless otherwise mentioned

ANNEX 4 – EVALUATION MATRIX

existing policies and strategies of main issues and priority strategic actions Interviews Ministry of stakeholders? Environment CEA R3 Have gender and human rights aspects been Alignment of project gender activities Documents MCPWS Information easily accessible duly considered in accordance with the national with the national gender action plan. Key informant Ministry of Women gender action plan and human rights policy? Alignment of project human rights interview and Child Affairs activities with existing government Focus group policy Efficiency EFC1 Has the administration and internal Number of critical audit issues. Documents NWSDB Available control of the project been satisfactory? Are the Number of critical audit issues assets duly accounted for and balanced in the repeated in successive audits. Interviews Sida/Monitoring books of the National Water Supply and Consultant Drainage Board? Focus group Audit reports EFC2 Has the financing been used in an Cost per number of customers Documents NWSDB effective way? Can it be considered that Sri served, analysed both for phase 1 and Sida/Monitoring Lanka has got value for money?36 for phase 1 + phase 2. Interviews Consultant Documentation from other projects EFC3 Was the organisational set-up efficient? - Number and extent of Documentation NWSDB implementation delays encountered Sida/Monitoring - Number of staff in implementing, Interviews Consultant supervising and monitoring Supervision organisations (periodic and special - Annual and final disbursement rates reports, annual review meeting minutes) Effectiveness EFT1 How has the process of increased By year of project implementation: Documents Minister &Secr Env Expected to be available, although subjective

36 The review will not be able to provide a full value-for-money analysis since this requires a study of economy, efficiency and effectiveness for which sufficient monitoring data is not available. The team will assess the extent to which the project can be justified by its results, taking alternatives into account and comparing with similar projects in similar contexts.

ANNEX 4 – EVALUATION MATRIX

independence for NWS&DB from the - Revenues collected Interviews GM/NWSDB government office developed since the start of - Revenues kept by NWSDB ERD the project implementation. What are the - Ratio of revenues kept by NWSDB NWSDB effects of the answer to this question – positive and current and projected Sida/Monitoring and/or negative? expenditures for Consultant # operation & maintenance Supervision # rehabilitation (periodic and special # servicing of loans reports, annual # reinvestment review meeting minutes) Min Plan Impl Min Urban Devt Urban Devt Authority

EFT2 Can knowledge transfer to the executing Level of appreciation with knowledge Documents NWSDB agency be confirmed, and to what extent? Are transfer among targeted staff and the staff able to care for maintenance and management Interviews Industries operation of the plants and the network to Amount of expertise and capacity for guarantee the sustainability of the investment? operation and maintenance engaged Focus group under external contracts Questionnaire survey

EFT3 How many connections to the system Number of connections established Documents NWSDB Readily available have been established? What is the plan for Number of additional connections Interviews future connections in phase 1 and phase 2 and planned to be established under when will it happen? Phase 2 Dates for commencement and finalisation of connections establishment under phase 2 EFT4 Which is the development of the volume Volume of wastewater treated for Documents NWSDB Readily available of treated wastewater per year and plant since each year of operation Interviews operations started? What is the planned Volume of wastewater planned to be volume for the future? treated in the future EFT5 What features in the design and Issue of critical comments made Documents NWSDB Expected to be available management of the intervention, as well as in during annual review meetings and in Interview ERD the context, have contributed to, or mitigated official communication between Sida Integrated in other Min Plan Impl against, expected good results? and GoSL/NWSDB, and by Focus Group Min Urban Devt What could possibly have been done differently beneficiaries Urban Devt to achieve better results? Appreciative comments made during Authority annual review meetings and in official

ANNEX 4 – EVALUATION MATRIX

communication between Sida and GoSL/NWSDB, and by beneficiaries EFT6 Of special interest is the follow up how the Total settlement amount transferred Documentation NWSDB process of claiming the bonds from the bank to NWSDB Interviews ERD has developed and the utilization of the Part of settlement amount that has amount disbursed by the bank. How has the been invested in Phase 1 of the process been handled and will the disbursed project amounts be used in favour of the financed Part of settlement amount that is project? What are the obstacles? planned to be invested in Phase 2 of the project Identified obstacles brought up during annual review meetings and in official communication between Sida and GoSL/NWSDB EFT7 To what extent have the objectives and Discharge values of BOD5, SS and Documentation NWSDB Information is largely available targets of the project been met. NH3-N Key informant Sida interviews Monitoring Percentage of O&M costs covered by Consultant revenue from user tariffs Number of non-compliance cases referred to CEA Impact I1 What have been the effects 37 in terms of Change in water quality parameters Water quality NWSDB Severely limited availability of improving the environment in the nearby at the specific locations sampled sampling and baselines and quantitative measurements of coastal wetlands, Muthurajawela Marsh and during EIAs constituent analysis environmental parameters Negambo Lagoon, with sensitive ecosystem of Values of environmental parameters national importance? measured by other institutions Difficult to assess attribution and contribution of project NARA results towards achieving environmental improvements Reports and internal DEA documents on water SLLRDC However, the working hypothesis for evaluation quality and ecology, Universities & Res questions I1, I2, I3 and I5 is that there exist some useful baselines and more current data that can be used to

37 Wording has been changed from ”What have been the results and effects……” in the original question included in the ToR.

ANNEX 4 – EVALUATION MATRIX

and visual Inst assess changes. If this is not the case, the report will Interviews discuss, based on the knowledge of the team members and inputs from interviews and documentation, what the effects can be expected to be, as clarified in Section 5 on limitations.

I2 What have been the effects in terms of Value of health parameters Reports and Min of Health Severely limited availability of information and difficult to improving the health conditions for people (See comment made under unpublished Universities & assess attribution and contribution of project results living in areas with effects from the project? evaluation questions I1) documents on water- Research Institutions towards achieving health benefits. borne diseases Interviews

I3 What have been the effects in terms of: Number of industrial/tourist/fishing Records Min Fisheries & Dept Severely limited availability of information and difficult to economic impact i.e. industrial-, tourist- and units over the time span of the Interviews Fisheries assess attribution and contribution of project results fishing development? project NARA towards achieving economic impact. See comment made under evaluation Focus group of NWSDB questions I1 industries SLTDA Min Industr Devt BOI Committee on siting high-polluting industries I4 What positive or negative effects beyond the Positive or negative comments on Documents Project documents Limited information available stated objectives have there been from the effects made in documentation, key Interviews PAPs project? informant interviews and beneficiary interaction I5 Has the project had any implication for the Mention of impact on poorer in the Project NWSCB Severely limited availability of information and difficult to poorer in the area? Positive and/or negative? area documentation Google Earth assess attribution and contribution of project results (See comment made under Census towards achieving impact for poorer in the area evaluation questions I1) I6 Has the compensation to affected Amounts of compensation provided Project NWSCB Data probably easily available landowners been reasonable and fair? to displaced households compared to documentation statutory regulations Amounts of other types of compensation provided by the Project Sustainability S1 How likely is it that positive results will be Extent of expected internal (NWSDB) Project NWSDB Information probably available but unsafe sustained over time? financing for Phase 2, over documentation & MCPWS implementation period internal reporting Extent of expected government Interviews budget financing for Phase 2, over

ANNEX 4 – EVALUATION MATRIX

implementation period Extent of expected external (donor/IFI) financing for Phase 2, over implementation period S2 Is a sanitary landfill established in order to Existence and standard of sanitary Project NWSDB Information easily available handle the sludge from the treatment plants? Is landfill, compared to standards set by documentation CEA it arranged in an environmentally acceptable CEA National standards Agriculture Dept standard? If not how will this issue be solved? Existence and standard of alternative Interviews methods, compared to standards set by CEA S3 Are part of the investment costs being Part of investment cost covered by Project NWSDB Information should be available covered from charge of tariffs from the tariffs from the industry documentation industry? S4 Is the project specific tariff system Level of tariff system implementation Project NWSDB Information probably available implemented, and are they also used in other in the 2 areas and elsewhere in the documentation MoE areas, how will the tariffs be developed for the country Interviews future? NWSDB plan for future development of tariff system

S5 The development and realisation of phase 2 Agreed level of financing Documentation NWSDB of the project, what is the time schedule and Current position of preparation in Interviews AFD how far has the phase 2 proceeded? relation to agreed road map

Annex 5 - Persons interviewed

Name Position Organisation Ministry of City Planning and Water Supply Mr. DGMV Hapuarachchi Secretary Ministry of City Planning and Water Supply Ms. D. Mangalika Additional Secretary (Technical) Ministry of City Planning and Water Supply Mr A. Abeygoonesekera Secretayr, retired Then Ministry of Water Supply and Drainage

DER Mr. Indika Premaratne Director Ministry of National Policies and Economic Affairs, Department of External Resources Mr. R. Nishantha Assistant Director Ministry of National Policies and Economic Affairs, Department of External Resources Mr. S. Karunadasa Assistant Director Ministry of National Policies and Economic Affairs, Department of External Resources

NWSDB Head Office Mr. D.U. Sumanasekera General Manager NWSDB, Head Office Mr. T. Wijetunga Add. General Manager (Policy and NWSDB, Head Office Planning) Mr. Nedurana Add. General Manager (Sewerage) NWSDB, Head Office Mr. R. Kulanatha Addl. GM South/East NWSDB, Head Office Mr. Danesh Gunathillake Sewerage Specialist NWSDB, Head Office Mr. DPM Chandana AGM (Manpower Development and NWSDB, Head Office Training), formerly in charge of GPOBA component Mr. D. Seneviratne AGM Sociology NWSDB, Head Office Mr. Ranga Dahanayake Chief Legal Officer NWSDB, Head Office Mr. G.D.N. Neville AGM (P&D – Sewerage) NWSDB, Head Office Mr. W.D.L. Chandrasiri AGM (Greater Colombo Sewerage) NWSDB, Head Office Ms. K. A. Wasantha Chief Accountant (Sewerage) NWSDB, Head Office Mr. G.K. Iddamalgoda Addl. GM (HRM) NWSDB, Head Office Mr. N.H.D.P. Dharmapala A.G.M. (Sewerage) NWSDB, Head Office Ms. M.M.S. Peiris D. G. M. (Finance) NWSDB, Head Office Mr. S.G.G. Rajkumar D. G. M. (Commercial) NWSDB, Head Office Mr. K.D.P.F. Siriwardene D.G.M. (Corporate Planning) NWSDB, Head Office Mr A.H.Gunapala AGM Sociology NWSDB Mr Lal Premnath GM, retired NWSDB Mr R. Balasuriya GM, retired NWSDB

ANNEX 5 – PERSONS INTERVIEWED

Central Environmental Authority Mr. Muthukudaarachchi Deputy Director General Central Environmental Authority (Environmental Pollution Control) Ms. Kanthi de Silva Director (EIA) Central Environmental Authority Ms. Nishani Environmental Officer Central Environmental Authority

RJWDP Project Office Mr. Ranawaka Project Director NWSDB, RJWDP Project Office Mr. Gamini Jayaratne Deputy Project Director NWSDB, RJWDP Project Office Mr. Mahesh Gunasinghe Chief Engineer NWSDB, RJWDP Project Office Ms. Sandhya Liyanaarachchi Engineer NWSDB, RJWDP Project Office Mr. Bandaranayake Engineering Assistant NWSDB, RJWDP Project Office Mr. R. Kulanatha Former Project Director, now Addl. GM NWSDB, RJWDP Project Office, formerly South/East Mrs. L. Senevirathne Former Project Director, now retired NWSDB, RJWDP Project Office, formerly Mr. Senaka Manamperi Former Accountant, currently AGM NWSDB, RJWDP Project Office (Costing) Mr. Diluka Kumara Sociologist NWSDB, RJWDP Project Office, formerly Mr. Rajapaksha Chief Engineer NWSDB, RJWDP Project Office, formerly Mr. Nalinda Roshan Engineering Assistant Mr. G.O.L.P. Bandara Manager (Dehiwala-Mt. Lavania) O&M Sewerage

Ratmalana-Moratuwa WWTP Mr. R.G.A. Ranatunga Officer in Charge NWSDB Ms. G.N. Ellawala Electrical Engineer NWSDB Ms. D.L.S. Dhanawardhana Chemist NWSDB Mr. Prasad Technician NWSDB Mr. Anuradha Technician NWSDB

Ja-Ela-Ekala WWTP Mr. Ariyadasa Hettiarachchi Officer in Charge NWSDB Mr. Suresh Devanarayana Engineering Assistant NWSDB Mr. Harshana Chemist NWSDB

Sida, Stockholm Mrs Elisabeth Ekelund Senior Programme Manager Loans and Guarantees, Sida Elena Sahlin Programme Manager Partnerships & Innovation, Sida

Swedish Embassy, Colombo Mr. K. Romeshun Programme Officer, retired Embassy of Sweden, previously Ms. S. Wijethillake Gender Officer, retired Embassy of Sweden, previously

Gender Experts Ms Leelangi Wanasundera Director Centre for Women’s Research Ms Swarna Sumanasekera Chair National Council of Women

AFD, Colombo 86

ANNEX 5 – PERSONS INTERVIEWED

Mr. Martin Parent Director AFD

PURAC Mr. Upul Perera Country Manager, Sri Lanka PURAC, Sri Lanka

China Geo Engineering Corporation – Sri Lanka Dr. Wu Zhiyong Assistant General Manager China Geo Engineering Corporation – Sri Lanka SWECO Guy Taylor Resident Representative Sweco, Sri Lanka Mr. K. Jinapala Sociologits, EIA Team Sweco, Sri Lanka

Colling Water AB Mr. Olle Colling Monitoring Adviser to Sida Colling Water AB Mr. K. Romeshun Resident Adviser to Sida Colling Water AB

Industries Ja-El/Ekala

Ms. D. Fernando Manager - Technical Sithro Garments Finishing

Mr. S. Muhandiram Manager - Human Resources Sithro Garments Finishing

Mr. R. Priyankara Manager – Maintenance Sithro Garments Finishing

Mr. WA Jayaweera Maintenance Engineer Brandix

Mr. W.K. Nissanka Facilities Management Exec. Keels Food

Mr. Nihal Jayaweera Plant Manager Union Chemicals

Mr. Priyanka Bernard Facility Manager Polytex

Mr. Asiri Camso - Loadstar

Int. Cosmetics Pvt. Ltd.

Supermet Mr. K.P. Daminda De Silva Civil Engineer Supermet

Nivasiepura Housing Project, Ekala

Ms. Dilka Fernando Household member

Mr. V. Nithanandan Household member

Mr. P.S. Welathanthri Household member

Mrs. E.S. Hassan Household member

Mrs. H.D.N. Thusari Household member

Mr. Logesh Household member

Annex 6 – Documentation consulted

AFD, 2017: RatmalanaMoratuwa Wastewater Disposal Project Audit reports, 2008 - 2015 CEA/Euroconsult, 1994: Muthurajawela Marsh and Negombo Lagoon: Conservation Management Plan, Wetland Conservation Project Report, 129 pp. Democratic Socialist Republic of Sri Lanka, 2001: Sri Lanka National Involuntary Resettlement Policy

DSR Sri Lanka/AB Svensk Exportkredit: Credit Agreement Mandakini L.L.U.; Mannapperuma N.1; Bandara N.J.G.J; Silva K.D.C.C.J; Perera M.T.C., 2016: Leachate Characterization and Assessment of Surface Water Quality near Karadiyana Solid Waste Dump Site. Proc. International Forestry and Environment Symposium 2016, Department of Forestry and Environmental Science, University of Sri Jayewardenepura, Sri Lanka. NWSDB/SWECO, 2005: Environmental Impact Assessment reports for Ratmalana/Moratuwa and Ja-Ela/Ekala (hard copies) Purac, 2015: Final Report RJWDP, 2006 - 2016: Project Document, with annual updates RJWDP, 2007-2016: Annual Progress Reports Sida, 2005: Assessment Memo – Concessionary Credit Sida, 2006: Specific agreement between Sweden and the Democratic Socialist Republic of Sri Lanka Sida, 2010: Bedömningspromemoria, Output based aid till avloppsrening, Sri Lanka Sida/NWSDB, 2006-2016: Agenda and minutes from Annual Meetings and Wrap-Up Meeting Notes Sweco, 2016: Project Completion Report and Monthly Reports 2010 - 2016 TNS Lanka (Pvt) Ltd, 2008: Social Impact Assessment and Monitoring of the Resettlement of the families at Soysapura – End-Line Evaluation Report

Review of Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project in Sri Lanka This report presents the findings, conclusions, lessons learned and recommendations of a review of the Ratmalana/Moratuwa and Ja-Ela/Ekala Wastewater Disposal Project, implemented by the National Water Supply and Drainage Board (NWSDB), Sri Lanka, supported by Swedish loan and grant financing through the Swedish International Development Cooperation Agency (Sida). The project, which was implemented during 2008 – 2016, aimed at improving the environmental conditions in two areas on the outskirts of Colombo and mitigating pollution by providing a full-fledged wastewater system comprising of sewerage, pumping, treatment and safe disposal of treated effluent and sludge, which would enhance the living conditions of the people living in the areas as well as sustain industrial development. The review finds that the project has been successful in achieving all its agreed results at output and outcome level and the sustainability of the project results is considered high. However, there are several issues that have limited the efficiency of the project, including serious delays caused by deficiencies in planning, contractor’s inefficiency and bankruptcy, public protest and use of defective material by the contractor.