Technical Assistance Consultant’s Report

Project Number: 36173

Democratic Socialist Republic of : Greater Wastewater Project Financed by the Japan Special Fund

Prepared by:

WS Atkins International Ltd (Water)

United Kingdom In association with Nippon Koei Co. Ltd, Japan and Ceywater Consultants (Pvt) Ltd

Sri Lanka

For Ministry of Urban Development and Water Supply (Executing agency) National Water Supply and Drainage Board (Implementing agency)

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Greater Colombo Wastewater Management Project Sri Lanka

PPTA 4531 - SRI

For Asian Development Bank

National Water Supply & Drainage Board Colombo Municipal Council

Government of Sri Lanka

VOLUME 1 Strategic Overview of the Project

October 2007

(in association with)

and

Client: Asian Development Bank

Project: Greater Colombo Wastewater Management Project

Title: PPTA TA 4531-SRI

Strategic Overview of the Project

Job No: 5039498 Copy No:

Reference: 5039498/60/DG/030

Copy No:

00 Master (unbound) file 60

Final TF RN RN October 2007 D2 Draft Final TF TF TF, AH RN 01/06/2007 1-D1 Interim Draft TF TF TF, AH RN 01/04/2007 Revision Purpose Originated Checked Reviewed Authorised Date

TA 4531: Greater Colombo Wastewater Management Project Atkins International, Nippon Koei UK, Ceywater Volume 1 - Strategic Overview of the Project

Abbreviations

Term Meaning / Definitions ADB Asian Development Bank AMP Asset Management Plan BoI Board of Investment BoQ Bill of Quantities CCA Colombo Core Area CEA Central Environmental Authority CMC Colombo Municipal Council CSS Colombo Sewerage System DFID Department for International Development (UK Government) DMMC /Mt. Lavinia Municipal Council GCSP Greater Colombo Sewerage Project GoSL Government of Sri Lanka GCWP Greater Colombo Wastewater Project IFI(s) International Funding Institution(s) JICA Japan International Cooperation Agency KMPS -Mulleriyawa Pradesiya Sabah KPI(s) Key Performance Indicators(s) KPS Kaduwela Pradesiya Sabah KUC Sri-Jayawardhenapura-Kotte Urban Council LA(s) Local Authority(ies) MIS Management Information System MUC Urban Council NGO Non-Government Organisation NWSDB National Water Supply and Drainage Board O&M Operation and Maintenance PPTA Project Preparation Technical Assistance PRMC Performance Related Management Contract PUC Public Utilities Commission QAS Quality Assurance System SSTA Small Scale Technical Assistance ToR Terms of Reference UDA Urban Development Authority WRSP Western Region Structure Plan

Note: (i) For area of land: 1 Perch is equivalent to approximately 25 m2

(ii) Currency exchange rate used: 1 USD (US$) = 111 SLRS

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Definitions

Except where explicitly stated otherwise, throughout the Final Report the following definitions apply:

“Asset Management” “Asset Management” is the business system that encapsulates all activities of the NWSDB and the Operators, associated with the management, creation, operation, maintenance and rehabilitation of the NWSDB’s sewers, pumping stations and other assets used for the delivery of the wastewater service.

“Board” The use of the word “Board” refers to the Board of the NWSDB.

“Drainage” Within the context of Colombo, the word “drainage” has two meanings. The title: “National Water Supply and Drainage Board”, refers to foul wastewater, or sewerage drainage; within the Municipal Ordinance for Colombo Municipal Council, the word refers to surface water drainage.

Within the Final Report, the internationally accepted terms “foul wastewater” and “surface wastewater” shall be used instead of drainage, except where the term “drainage” is explicitly required, as in talking about the National Water Supply and Drainage Board.

The terms “foul wastewater” and “sewage” are synonymous as are the terms “sewerage” and “sewer system” or “sewer network”. The terms “sewerage infrastructure” or “sewerage network” are taken to include the pumping stations, also.

“DMMC Unit” The term “DMMC Unit” refers to the operating unit of the NWSDB within the DMMC area.

“Greater Colombo Wastewater Management Project” The term “Project” refers to the Greater Colombo Wastewater Management Project.

“On-site”, “Underserved Areas” and “First-time Sewerage” The term “on-site” refers to the area within Greater Colombo but outside the Colombo Sewer System area where there are no public sewers and wastewater disposal is by private facilities within the boundary of households or by local communal means. The term “underserved” refers to the areas within the Colombo sewerage system area without sewers. Within the “underserved areas” where sewers are to be provided, the provision of the sewerage may be referred to as “first-time sewerage”.

“Operators” The CMC drainage department and the DMMC Unit are referred to as the “Operator” or “Operators”. Within the on-site areas, the “operators” are the local authorities or contractors to the local authorities.

“Non-Fixed Operational Plant” Non-fixed operational plant refers to plant and used by the Operators but which is not fixed at a site but taken to a working site by the Operators from their depot. Examples are sewer cleaning equipment, trench de-watering pumps, excavators and the like.

“Performance Partnership Agreement” “Performance Partnership Agreement” and the “Agreement” refer to the Agreement between the NWSDB and the CMC and the DMMC unit for the delivery of the O&M of the wastewater assets.

“Scheme” The term “scheme” refers to a works component of the Greater Colombo Wastewater Management Project.

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“Wastewater Management Unit” The recommended NWSDB Wastewater Management Unit may also be referred to as the “Wastewater Management Unit” or the “Management Unit”.

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Contents of the Final Report

This Volume is one document within a suite of documents that comprises the Final Report for the PPTA4531: Greater Colombo Wastewater Management Project. The Final Report comprises:

Volume 1: Strategic Overview of the Greater Colombo Wastewater Management Project; Volume 2: Capital Investment Schemes: Part A – Colombo Sewer System; Part B – Underserved Areas. Volume 3: On-Site Areas: Part A – Main Report; Part B – Sub-Report for the Kotte Pilot Study Part C - Sub-Report for the Maharagama Town Pilot Study Part D - Sub-Report for the Kaduwela Pilot Study. Volume 4: Procurement. Volume 5: Management Documentation Volume 6: Part A: Operational Management Plan; Part B: Partnership Performance Agreement; Part C: O&M Plan. Volume 7: Economic Assessment. Part A: Economic Analysis Part B: Project Costs Volume 8: Financial Management Assessment Volume 9: Social and Poverty Analysis. Volume 10: Part A - Re-Settlement Framework; Part B - Re-Settlement Plan for Colombo sewer system area Part C - Re-Settlement Plan for On-Site Areas Part D - Public Awareness Campaign Volume 11: Environmental Reports

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Table of Contents of this Volume

Section Page

Acknowledgements ix Foreword x Executive Summary xi 1. Sociological, Economic and Physical Characteristics of Project Area 1 1.1 Country Information 1 1.2 Economy 1 1.3 Administrative Areas 2 1.4 Project Area 4 1.5 Climate 4 1.6 Geology 4 1.7 Topography and Soils 5 1.8 Watercourses and Water Space 6 1.9 Land Use 6 1.10 Colombo Development Plans 8 2. Project Preparatory Technical Assistance. 11 2.1 Project Preparatory Technical Assistance Objectives 11 2.2 Past Studies 12 2.3 Need for a Strategy 13 3. Legal Framework and Government Policy towards the Sector 17 3.1 Institutional Structure 17 3.2 Relevant Laws 20 3.3 Government Policy for Wastewater Management 21 3.4 External Assistance to the Sector in Sri Lanka 22 3.5 Ownership of the Colombo Wastewater Assets 23 4. Strategy for the Main Sewer Area 25 4.1 Wastewater Infrastructure 25 4.2 Specific Concerns with the Existing Infrastructure 25 4.3 Current Projects 27 4.4 PPTA Proposals for the Main Sewer Area 27 4.5 Sea Outfalls 28 4.6 Fine Screens 29 4.7 Screenings Conditioning 34 4.8 Pumping Stations 35 4.9 Sewers 35 5. Strategy for Under-Served Areas 36 5.1 Existing Sewerage 36

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6. Strategy for Sewage Disposal 39 6.1 Current Position 39 6.2 International Context and Obligations 39 6.3 Options for Treatment at the Sea Outfalls 40 6.4 Wastewater Treatment Options 42 7. Strategy for the On-Site Areas 45 7.1 Capital Investment within On-Site Sanitation 47 7.2 Charges for Industrial Effluent Discharges 48 8. Institutional 50 8.1 General 50 8.2 National Water Supply and Drainage Board 51 8.3 Operators 52 8.4 SSTA Recommended Institutional Changes 52 8.5 Operator Performance 53 8.6 NWSDB Sewerage and Drainage Unit 55 8.7 Roles of the NWSDB and the Operators 55 8.8 Operator Organisation 56 8.9 Customer Service 57 8.10 Management Information System 58 8.11 Documentation 59 8.12 Institutional Arrangements for the On-Site Areas 60 9. Wastewater Service Charges 61 9.1 Introduction 61 9.2 Tariff Determination 61 9.3 On-Site Service Charges 63 9.4 New Service Connection Charges 64 9.5 Procedure for Under-served Areas 64 10. Project Implementation 66 10.1 Executing and Implementing Agencies 66 10.2 Project Management Unit 66 10.3 Disbursement Procedures 67 10.4 Reporting Requirement 67 10.5 Accounting 68 10.6 Auditing 68 10.7 Project Reviews 68 10.8 Design and Monitoring Framework 68 11. Procurement of the Greater Colombo Wastewater Management Project 73 11.1 Prioritisation of Schemes within Funding Limit 73 11.2 Summary of Loan Components 74 11.3 Loan Value 74

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11.4 Schemes for Inclusion in Funding Load 75 11.5 Method of Procurement 76 12. Economic and Financial Analysis 78 12.1 Introduction & Scope to Economic Analysis 78 12.2 Context of the Project 78 12.3 Present Situation in the Project Areas 79 12.4 Demand Forecast for Waste Water Services 80 12.5 Project Interventions 81 12.6 Project Economic Analysis 82 12.7 Project Benefits 82 12.8 Rehabilitation of the Sewerage Network 84 12.9 On Site Development Areas 84 12.10 Risks 85 12.11 Financial Analysis – Beneficiary Households 85 12.12 Project Beneficiaries 86 12.13 Poverty Impact 87 12.14 Cost Estimates 87 12.15 Financing Plan 88 13. Financial Management 91 13.1 Financial Sustainability 91 13.2 National Water Supply and Drainage Board 91 13.3 Colombo Municipal Council 92 14. Scope of Land Acquisition & Resettlement 95 15. Public Awareness Campaign 96 16. Environmental 98 16.1 Introduction 98 16.2 Environmental Reporting Required 98 16.3 Environmental Impacts and Mitigation Measures 98

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List of Tables Table 1.1 - Institutional Recommendations within Strategic Theme Areas xiii Table 1.1 - Key Economic Indicators 2 Table 1.2 - Landscape Distribution in Core Areas 5 Table 1.3 - Extent of Land Usage (Agricultural land showing key crop) 7 Table 1.4 - Land Usage by DS Division 7 Table 1.5 - Population Growth in the Western Region 8 Table 1.6 - Projected Populations in 9 Table 1.7 - Land Usage within Pumping Station Catchment 9 Table 1.8 - Estimates of Future Population in Project Area 10 Table 2.1 - Best International Practice 15 Table 3.1 - National Government Ministries 17 Table 3.2 - Regulators 18 Table 3.3 - Investment Projects 22 Table 4.1 - Summary of Sewer Materials 25 Table 5.1 - Prioritisation of Underserved Areas 37 Table 5.2 - Areas to be Included within Project 37 Table 10.1 - Design and Monitoring Framework 69 Table 11.1 - Costs by Project Component 75 Table 11.2 - Analysis of Contingencies, Taxes & Financing Costs 75 Table 12.1 - Connections to the Sewer System 80 Table 12.2 - Willingness to Pay for Sewerage Services (SRLs/month) 82 Table 12.3 - Willingness to Pay by Type of Organisation 82 Table 12.4 - WTP in Unsewered and On-site Areas 83 Table 12.5 - Impact of the Project on Property Values 84 Table 12.6 - Rehabilitation of Sewerage Network – Sensitivity Analysis (EIRR %) 84 Table 12.7 - On-Site Pilot Projects – Economic Assessments 85 Table 12.8 - Financial Impact on Households (SLRs/year) 86 Table 12.9 - Project Cost Summary 89 Table 12.10 - Financing of Project Components (US$) 90 Table 12.11 - Financing Plan (OCR funding only) (US$) 90

List of Figures Figure 1.1 - Colombo Core Area – Showing City Plan Zoning 3 Figure 4.1 - Schematic Arrangement for Fine Screening of Discharge 31 Figure 4.2 - Schematic Arrangement for Fine Screening of Mutwall Discharge 33

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Acknowledgements

1. In the preparation of the Final Report, the help and guidance provided by Mr A Peiris, Secretary for the MWSD and Mr A N R Amarathunga, Secretary of the Ministry of Urban Development and Water Supply; Mr C Amarasinghe, Chairman of the NWSDB, Mr M Wickramage and Mr K L L Premanath, General Managers together with Mr R Warusamana, the NWSDB Project Director and Deputy General Managers: Mr D Thotawatte (Finance), Mr K T Karunadasa (IT) and Mr R S C George (Corporate Planning) and Mr H G Thilakaratne, Additional General Manager is acknowledged.

2. We acknowledge the assistance and time willingly provided by Dr Jayantha Liyanage, Municipal Commissioner for Colombo and by Mr M NM Sham Nawaz, Chief Co-ordinating Officer to his Worship the Mayor.

3. For operational matters, we record the assistance of Mr S G V D H Gunesekara, Director of Drainage within the CMC and Mr S G J Rajkumar, Assistant General Manager within the NWSDB drainage unit, together with their staff. Guidance was also provided by officers of both the NWSDB and the CMC who, unfortunately, are too many to mention by name.

4. We appreciate the time and help given by the members and staff of the local authorities and government departments within the on-site areas. The assistance of the staff of the Central Environmental Authority and of the Urban Development Authority is noted.

5. The guidance and help provided by Ms. T. Gallego-Lizon, Urban Development Specialist with the Asian Development Bank together with Mr M Thiruchelvam and Ms Manjula Amerasinghe, Project Implementation Officers at the ADB Mission within Colombo is duly noted and appreciated as is the guidance of Ricardo V Carlos Barba, consultant with the ADB and Hannelli B Austria, Assistant Project Analyst with the ADB in Manila.

6. The valuable assistance provided by the local Sri Lankan project team members cannot go unmentioned. The invaluable assistance of the support staff to the team is appreciated.

7. Several of the points discussed, and upon which we make recommendations, are continuations of the findings of the “Sewerage Rehabilitation Proposals for Colombo” produced in April 1999 within the Greater Colombo Sewerage Project by W S Atkins and of SSTA4184: “Greater Colombo Wastewater Management Sector Review” produced by Nippon Koei UK and Ceywater Consultants in August 2004. The origin of some of our recommendations is duly recognized.

8. The very nature of a study such as this, require us to record and, if appropriate, comment upon weaknesses and short-comings. As the authors of the Final Report, we strongly iterate that any criticisms are not directed at the Board, the CMC or their staff but are stated merely as necessary to demonstrate the future actions that need to be taken to ensure the sustainability of an efficient wastewater service in Colombo. We appreciate that these circumstances have arisen due to historic reasons outside the control of current members and staff. Indeed, we admire the achievements that have been affected, under the circumstances that have prevailed.

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Foreword

9. This Project Preparatory Technical Assistance Project Preparatory Technical Assistance (PPTA), a component of the Greater Colombo Wastewater Management Project (GWWMP), has the objective to produce a Feasibility Study Report to support a loan to the Government of Sri Lanka (GoSL) for the rehabilitation and improvement of Colombo’s existing sewerage network; for some modifications and extensions to provide essential sewerage services to un- sewered areas; for institutional and capacity building within the National Water Supply and Drainage Board (NWSDB) and within the Colombo Municipal Council (CMC) Drainage Department and for three pilot studies for the on-site areas of Greater Colombo. The PPTA follows on from previous work by Atkins on the Greater Colombo Sewerage Project1 (GCSP) in 1999 for the rehabilitation of the Colombo Sewer System, and by Nippon Koei UK and Ceywater on the 2004 Small Scale Technical Assistance2 (SSTA) which prepared performance, investment and financial strategies for the sewage collection and disposal service delivery in Greater Colombo.

10. The PPTA was approved by ADB in December 2004. The consultant’s offer of services was submitted in May 2005, and the award made in August 2005.

11. The Terms of Reference for the PPTA recognised there was a need to critically review the conclusions and recommendations of the GCSP in light of changes since 1991, particularly to appraise the consequences of the land development that have occurred in Colombo and to reflect the actions taken as a result of the GCSP recommendations.

12. The PPTA commenced late 2006 with an Inception Report submitted in January 2007; the Interim Report in April, 2007 and a Draft Final Report in June 2007. Following the submission of the Draft Final Report, various issues were raised and these have been addressed within the Final Report.

1 Greater Colombo Sewerage Project: Sewerage Rehabilitation Proposals for Colombo, April 1999 funded by Department for International Development, UK. 2 ADB SSTA4184

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Executive Summary

13. Within this Volume we have set out a recommended strategy for the National Water Supply and Drainage Board (NWSDB) which will enable the Board to deliver a high quality sewerage service to its customers in Colombo that can be bench-marked against best international practices.

14. We have made recommendations for the rehabilitation of the Colombo sewer system; the expansion of the network into the under-served areas and for three pilot projects within the on-site areas.

15. Within the Project Preparatory Technical Assistance, we have made recommendations for the institutional improvement and capacity building of the NWSDB head office function and for the Colombo Municipal Council (CMC) as operator of the Colombo sewer system and of the NWSDB’s operational unit within the Dehiwala/Mt. Lavinia Municipal Council (DMMC) area.

16. This Volume also contains our recommendations related to the economic and financial analysis we undertook, and on environmental issues.

17. Within subsequent Sections of this Volume, we describe first the performance of the current sewerage service provided by the NWSDB and the CMC within strategic theme areas and then we have suggested policies and strategies that the NWSDB may wish to consider as a part of their drive towards the provision of a first-class sewerage service within Colombo.

18. We believe that, when successfully implemented, our recommendations for the Greater Colombo Wastewater Management Project meet stakeholder expectations of the outputs from the PPTA:

(i) Within the Colombo sewer system area, we have included schemes for: the rehabilitation of the sea outfalls; the fine screening of all flows discharged through the sea outfalls to meet Sri Lanka water quality standards requirements for floating solids; the rehabilitation of the sewer network and pumping stations; new pumping stations where needed due to insurmountable design problems with the existing stations and to meet increased capacity; new sewers to meet increased flows and for expansion of the network into currently un-sewered areas;

(ii) We have made realistic proposals for the on-site areas which will significantly improve the quality of life for people within the pilot project areas and which can considered by the Government of Sri Lanka, Local Authorities and by the NWSDB for expansion throughout the on-site area, if not Sri Lanka;

(iii) We have made a number of proposals relating to institutional and capacity building within the NWSDB, the CMC Drainage Department and the operational department of the NWSDB and also relevant to the provision of services within the on-site areas. These will enable the organizations to continue their on-going development within an accountable business environment.

19. In particular, we propose:

(i) The cleaning of the sea outfalls at Mutwal and Wellawatte, the construction of a new diffuser for Mutwal and the replacement of the end cap of the Wellawatte outfall in order to improve the performance of the outfalls; (ii) The installation of 3mm fine screens at Wellawatte, and Harbour pumping stations to ensure that all wastewater discharged through the two sea outfalls meets Sri Lanka water quality standards for floating solids within wastewater discharged to a marine environment;

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(iii) Installation of plant to condition the screenings and grit from the fine screens and coarse screens at the upstream pumping stations such that they can be safely disposed; (iv) Construction of new pumping stations within the existing pumping station sites at , and Maligawatte to ensure the reliability of these stations and to provide adequate capacity for future (year 2030) peak flows; (v) Construction of a pumping station on a new site at to alleviate problems with the Fort siphon; (vi) Rehabilitation of six pumping stations – Harbour, Dehiwela, Mt Lavinia, Kollonnawa, Meetotamula and Wellampitiya - to include for new pumps and ancillary equipment to meet increased demand and to ensure service reliability as well as refurbishment of the buildings and grounds; (vii) Provision of adequate standby generation for the operation of the pumping stations during periods of power failure; (viii) Laying of 4.71kms of new pumping sewers and 5.16 kms of gravity sewers, within the range 300 to 600mm diameter to meet increased demand and for improved system efficiency; (ix) Cleaning of the inlet sewers to the pumping stations of accumulated grit, silt and other debris that adversely affects the capacity and performance of the sewers; (x) Separation of the foul (sewerage) and surface water drainage systems in order to both reduce the load on the sewerage system and to reduce the incidence of storm water and other overflows to the natural water courses through the cross-connections to the surface water system; (xi) Provision of first-time sewerage within nine of the twelve currently underserved areas; (xii) Institutional support and technical assistance to the NWSDB and the CMC for guidance, training, provision of new mobile (non-fixed) operational plant, an extension of the existing NWSDB’s Management Information System to include for wastewater and other business support systems. 20. The benefits that are anticipated to be gained include:

(i) Incidence of diarrhoeal diseases to drop below the 2003 level of 622.5 cases per 100,000 persons; (ii) The percentage of the population in the urbanised area of Colombo whose sewage will be collected will increase from a current 30% to 363% by 2012; (iii) Population of 645,000 current connected population and 150,000 first-time sewerage persons will benefit from a more reliable sewerage system in Colombo, by 2012; (iv) 150,000 people (approx. 35,000 households) predominantly, but not exclusively, poor people will be provided with first time piped sewerage facilities; (v) 100% of wastewater discharged to the marine environment will be fine screened; (vi) There will be an estimated reduction of 10 tonnes Biological Oxygen Demand and 1 tonne of suspended solids to inland waters as a result of the provision of first time sewerage facilities. 21. The required investment to procure the above improvements is costed at US$134m, of which US$100m will be within an ADB loan.

22. The EIRR for the project is 19.6% and the NPV is Sri Lanka Rupees 1,314 million. The economic indicators for the project are most sensitive to changes in investment costs and to the increase in property values generated by project implementation.

3 645,000 and 795,000 and 2.2m

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23. As the investment costs will be financed fully by the government through grant, the sustainability of the project will depend on whether or not the NWSDB commences the collection of a sewerage tariff. Assuming that the sewerage tariff will be collected starting 2008, the financial projections for both the CMC and the NWSDB show that the sewerage O&M costs, as estimated under the project, should be recovered fully with the imposition of the proposed sewerage tariff.

24. The sewerage operations will not be a financial burden to the other operations of the CMC and the NWSDB. As such, the project is considered financially sustainable.

25. In addition to the works proposed within the capital programme, we have made a series of institutional recommendations for consideration by the NWSDB and other stakeholders, as shown in Table 0-1:

Table 1.1 - Institutional Recommendations within Strategic Theme Areas

Strategic Theme Area Recommendation

Legal and Regulatory 1. Whilst the legal framework is in place both for the Colombo sewer Framework system and the on-site areas, institutional capacity building is required for monitoring and enforcement.

2. An environmental and financial regulatory framework is in place and following completion of ADB’s TA4049-SRI4 a Customer Service Code will be available for adoption. The continuing need will be for monitoring, performance reporting and enforcement.

Ownership of the CSS 3. Transfer of the Colombo sewer system to the NWSDB to be assets completed.

4. Separation of the ownership and the operation of wastewater assets, in line with Government policy

O&M of the CSS assets 5. The NWSDB to enter into a Performance Partnership Agreement with the CMC for the operation and maintenance of the Colombo sewer system within the Colombo Municipal area, and the NWSDB’s own operating unit for the Dehiwala/Mt. Lavinia Municipal Council (DMMC) area.

6. The Agreement to contain Key Performance Indicators by which the performance of the operators can be monitored against desired levels of operational performance and customer service.

7. The ADB loan to include for the purchase of necessary non-fixed operational plant for the operators.

8. The ADB loan to include for the purchase of a computerised work planning system for preventative maintenance, inclusive of a stores management function to ensure adequate spare parts for both the maintenance of the assets and for non-fixed operational plant and equipment.

9. A stores replenishment policy to be adopted based upon need and delivery times.

10. A sewer cleaning program is introduced within GCWMP and continued.

Institutional organization of 11. Formation within the NWSDB of a Wastewater Management Unit the NWSDB and CMC and, within each of the two operators, a small work planning unit.

12. The ADB loan to include for the purchase of necessary business and computer support systems.

4 The current TA - ADB TA 4049 - aims to develop and disseminate customer service regulations for the water sector within the framework of the Public Utilities Commission.

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Strategic Theme Area Recommendation

13. Training to be provided within the NWSDB and the operators for the management, operation and maintenance of the NWSDB’s sewerage assets in order to ensure that the investment made within GCWMP is sustained.

Management Systems 14. The potable water Management Information System currently being purchased by the NWSDB is enhanced to include for the wastewater function.

15. NWSDB to produce a full suite of Business Documentation including business, operational and customer service procedures to ensure a correct and consistent application of Board policy by staff within their work and, where applicable, by the Board’s operators.

Customer Service 16. The NWSDB to be the first point of contact for all customer sewerage enquiries, including requests for new service connections, albeit that the request for service will be transferred to the operators for action.

17. All customer contacts to be monitored within the NWSDB’s Management Information System.

18. Good customer service to be endorsed by the existence of a Customer Service Manual and by the adoption of Customer Levels of Service to be achieved by the NWSDB and operators.

Asset Management 19. The NWSDB to adopt an Asset Management Planning approach to the maintenance and replacement of its sewerage assets; for the planning for growth in demand for its services and for the expansion of the network into currently un-sewered areas.

20. The existing cross-connections between the surface water and sewerage systems be located and disconnected.

Disposal of wastewater 21. The current requirement that no floatable solid of size greater than 3mm is present within the wastewater discharged to the sea is reconsidered by the CEA as the requirement is more stringent than normally required (e.g.6 mm within Europe).

22. The NWSDB updates the Colombo Wastewater Master Plan to review the options for sewage disposal within Colombo, including sludge disposal.

23. Within the on-site areas, the effectiveness of the pilot projects is monitored and a Wastewater Master Plan is produced for the Greater Colombo on-site areas. .

24. The Local Authorities to own and operate small communal schemes within the on-site area with technical support from NWSDB. Charges to be paid direct to the service provider at the time and place of the service being provided.

Industrial discharges 25. The NWSDB becomes more proactive with regard to the monitoring and control of the effluent discharged to its sewers by industry through the maintenance of a Trade Effluent Register and by regular sampling and analysis of industrial effluents.

26. The NWSDB considers the introduction of a tariff structure that includes the pollutant loading of effluent discharged to the sewers, as well as the volume of the flow.

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1. Sociological, Economic and Physical Characteristics of Project Area

1.1 Country Information

26. The Democratic Socialist Republic of Sri Lanka is a 65,610 square kilometre island country, located in the to the south of India. The principal city and commercial capital is Colombo with Sri Jayawardenepura, ten kilometres to the east, as the administrative centre. The international airport serving Colombo is the Bandaranaike International Airport at , 30km north of Colombo.

27. 80% (15.4m) of the 19.4m population are considered to live in rural areas and 20% (4m) in the urban areas.

28. The population comprises four ethnic groups:

Sinhalese 75% Tamil 18.1% Muslims 6.1% Burghers5 and others 0.8%

The main languages are Sinhala and Tamil. English is widely spoken within the urban areas but less in the rural areas.

29. The major religion is Buddhism (69%), followed by Hinduism (15%), and Christianity and Islam each with 7%.

30. The island comprises a central mountain region that rises to 2,000 metres above sea level surrounded by coastal plains. Sri Lanka is located 880 km north of the equator, off the southern tip of India.

31. Rivers flow from the central mountains to the coastal plains. Irrigation has been widely practiced in the dry zone for many years with extensive canal and storage systems, particularly in the North Central plains.

32. The Colombo Metropolitan Area6, referred to also as Greater Colombo, which comprises the city of Colombo together with semi-urban towns to the North, East and South of the city has an estimated population of 2.2m million7. The area has good transportation, medical facilities, communications and general facilities.

1.2 Economy

33. The monetary unit is the Sri Lanka rupee which is valued (August, 2007) at 112.65 to the US$.

34. The main exports of the country are clothing and textiles (44.8%), tea (12.8%), diamonds (4.5%), petrochemical products (2.7% and coconut products (1.8).

35. The GNI per capita is US $1,1608.

5 Descendants from Dutch and Portuguese colonists 6 See Definitions 7 2001 census 8 World Bank, 2006

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36. The Sri Lanka trade deficit9, on a balance-of-payments basis, widened from US$1.4bn in 2004 to US$1.6bn in 2005. In the latter year, exports increased to US$6.3bn and imports rose to US$8bn.

37. Key economic indicators10 for Sri Lanka are as in Table 1.1:

Table 1.1 - Key Economic Indicators

Key Indicators 2006 2007 2008 2009 2010 2011 Real GDP growth (%) 7.4 6.0 6.1 6.0 6.1 6.2 Consumer price inflation (average; %) 13.7 15.5 8.2 5.5 4.7 4.2 Budget balance (% of GDP) -7.2 -7.2 -7.0 -6.8 -6.5 -6.4 Current-account balance (% of GDP) -3.9 -3.7 -3.8 -3.6 -3.2 -3.1 Lending rate (average; %) 14.7 15.1 11.4 10.5 9.9 9.4 Exchange rate SLRs:US$ (average) 103.9 110.8 113.7 117.1 120.4 123.5

1.3 Administrative Areas

38. Colombo is situated within the Western Province of Sri Lanka.

39. The Western Region Structure Plan11, which sets out the long term development for the Western Province, divides the Province into three zones of which the Colombo Core Area12 is one such zone.

40. The Colombo Core Area, shown in Figure 3.1, encompasses seven Local Authorities. These include the three Municipalities of Colombo, Dehiwala-Mount Lavinia13 and Sri- Jayawardhenapura-Kotte; the two Urban Councils for and Maharagama together with Kaduwela and Kotikawatta-Mulleriyawa Pradesiya Sabahs.

41. Figure 1.1 shows also the Colombo Structure Plan designation for land usage.

9 IMF, August 2007 10 The Economist, August 2007 11 UDA’s Structure Plan, based on Western Region Structure Plan 2004 by CESMA Consultants of Singapore and also referred to as the CESMA Plan 12 See Definitions 13 Referred to as the CMC and DMMC areas, respectively

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Figure 1.1 - Colombo Core Area – Showing City Plan Zoning

42. The Colombo Core Area represents the economic and administrative hub of the country. The city is rapidly developing outwards south along the coast and eastwards. A key feature since GCSP is the construction in recent years of high-rise office and apartment blocks, particularly within the historic city centre area.

43. Greater Colombo, consists of three distinct sewage collection and disposal areas:

(i) The area served by the Colombo sewerage system (CSS) which covers most of the Colombo Municipality; small parts of Dehiwala-Mount Lavinia Municipality and the Kolonnawa Urban Council area;

(ii) Pockets of under-served areas within the boundary CSS that are not connected to the CSS, of which there are twelve. Predominantly, these contain residential and small scale commercial enterprises14;

(iii) An area, referred to as the “on-site” area, which lies outside of the current catchment area of the CSS. It encompasses the Sri-Jayawardhenapura-Kotte Municipal and areas; Kaduwela and Kotikawatta-Mulleriyawa Pradesiya Sabahs areas and the un-sewered areas of the Dehiwala-Mount Lavinia Municipal and

14 See Volume 2: Part B for expansion of the existing Colombo sewer system into these areas.

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Kolonnawa Urban Council areas. The area primarily depends on on-site arrangements for disposal of wastewater. A wide variety of properties are served by the on-site systems including residential properties, small and large government institutions and business establishments and industries of various sizes15.

1.4 Project Area

44. The Project Area is defined as the three areas described within Paragraph 43.

1.5 Climate

45. The project area is located within the Wet Zone, which experiences a rainy, humid, and hot climate. The mean annual rainfall is 2524 mm. The rainfall pattern is closely related to the monsoonal periods. Most of the rain (823 mm) is received in April - June, overlapping mostly with first inter-monsoonal period (March - April) and the south-west monsoon period (May - September). About 680 mm falls during the second inter-monsoonal period (October – November). During the north-east monsoon (Decembers - February) relatively little rainfall is received.

46. The average number of rainy days is 145. The mean monthly rainy days vary from five in January and February to 17 days in October. The highest ever recorded rainfall per day was 493.8 mm on 4th June 1992, which caused serious flooding in the Colombo City and surrounding areas lasting for days.

47. The mean annual temperature is 27.4 0C, with mean maximum and mean minimum temperatures of 31.8 0C and 23.3 0C respectively. The warmest months are March and April, while the coldest months are October through February. Average annual morning and evening humidity are 82 % and 75 % respectively. The recorded daily wind speed in Colombo is 8.9 km/h, with an annual variation of between 6.9 km/h in March and November and 10.8 km/h in June.

1.6 Geology

48. With respect to solid geology, the core areas are in the Crystalline Zone with Vijayan Series. In the Vijayan Series, rocks are both igneous and metamorphic types, and include banded gneisses and magmatites, which contain relatively few minerals dominated by quartz, microcline, plagioclase, biotite and hornblende. Rocks are highly contorted and bedding is rare. Discontinued circular structural patterns are common with topographic features of hill- clusters, inselbergs, domes and the like, often rising above extensive lowlands.

49. Major geo-morphological elements include Holocene Beaches and Dunes in the coast, and Lateritic Hills, Rises and Terraces together with fluvial Deltaic Plains and associated water bodies in the mainland.

50. During the laying of the first sewers in Colombo, hard gneiss rock in the harbour area; high water tables almost everywhere; running sands at and near the lakes, and “liquid peat mud” at Madampitiya were all encountered.

51. Submarine valleys are formed at the points the rivers flow into the sea.

52. From Colombo southwards, crystalline bedrock outcrops intermittently at the shoreline and off shore.

53. The older beach deposits, which are extensive north of Colombo, dwindle due to coast recession. Raised beach deposits occur between 3 to 8 m above sea level. Between

15 See Volume 3 for wastewater disposal facilities within the on-site area.

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Colombo and Mt-Lavinia, shoreline is concave seawards, and terminates in headland at each end. The sandstone reef that commences at Face and extends offshore to Mt-Lavinia and beyond, keeps out sand that would nourish beaches. At Mt- Lavinia there is a break in the reef.

1.7 Topography and Soils

54. The principal coastal and shoreline form in the project area is a bay and headland, with beaches.

55. The meandering Kelani Ganga is the major river in this area. The Kelani Ganga lacks a delta of any significant size but at the outlet to the sea are irregular sand spits.

56. The historic Colombo Fort is built on a headland and the expansion of development onto the Kelani Ganga sediments comprises the Colombo Harbour area.

57. Beira Lake, an important coastal feature of Colombo, is an irregular saline water body discharging to the sea in the area of the Galle Face Green, an historic recreational area on the shore.

58. The Galle Road, a spine road within the Colombo sewer system area, from Bambalapitiya to Mount Lavinia lies on an old sand dune. At Mount Lavinia this old sand dune terminates with a prominent laterite hillock headland.

59. The reef of beach rock has been cut off from the shore in places and breached elsewhere, giving rise to coastal erosion. Crystalline rock comes closer to the sea, in the southerly part of the segment and finally meets it at Colombo. The coast and offshore zone, between Colombo (Galbokke) and Kelani Ganga, bear signs of vanishing beaches marked by reefs of beach rock.

60. The project area is within the lowest peneplain, which has resulted from millions of years of subaerial weathering of the ancient intensively folded landmasses of crystalline rocks. This peneplain can be divided into following three types of landscape facets:

(i) Flat or nearly level plain (0 - 2% gradient); (ii) Gently undulating to undulating plain (2 - 8% gradient); (iii) Rolling plain (8 - 16% gradient).

61. The landscape distribution of the area can be identified within the characteristics shown below in Table 1.2.

Table 1.2 - Landscape Distribution in Core Areas

Landscape (gradient) Percentage of the Core Area Flat or nearly level (0 - 2%) 30 -35 Gently undulating to undulating plain (2 - 8%) 50 -60 Rolling plain (0 - 16%) Less than 10

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62. In the upper reaches of the terrain there are high to medium slopes with the Red Yellow podzolic soils well-drained. The middle reaches with gentle slopes or flat terrain are imperfectly drained while the lower reaches are flat and poorly-drained.

1.8 Watercourses and Water Space16

63. There is an extensive system of drainage canals and basins17 in the Greater Colombo area. The main components of this hydraulic system comprise open-ended, shallow drainage canals and low-lying lands functioning as natural detention basins. The canal system, constructed initially by the Dutch for transport, is filled from surface waster run-off in the immediate vicinity of the canals.

64. The hydraulic gradient in the detention basins and the canals flowing towards the sea is almost zero and, as a consequence, the canals are often clogged by water-weeds are prone to silting.

65. In the rainy season, relatively high flow rates occur towards the sea but in dry periods flow is marginal or non-existing.

66. The major canals of the Colombo core area include Kolonnawa Ela and Diyawanna Oya, the latter is extensively used for recreational facilities and the surrounding area has been declared a sanctuary.

67. The southern system of canals begins at the Kotte Ela North covering an area of mainly densely population residential areas and drains to the sea through the Dehiwala and Wellawatte canals.

68. The Eastern system of canals drains an area including the area around parliament. The eastern catchment is predominantly rural with scattered residential settlements and because of lower urbanization it is the least polluted.

69. All these inland waterways receive both industrial and domestic effluent, either directly from polluters or by spillage from the Colombo sewer system.

70. Extensive canal and drainage improvements have been undertaken over the past 12 years under the Greater Colombo Flood Control and Environmental Improvement Project. Much of this work was completed by the end of 2000 and since then regular maintenance has not been fully adopted. Consequently, the initial benefits have not been sustained and flows are often seriously impeded.

1.9 Land Use

71. Land use within the project area is mainly built-up areas and homesteads with home gardens. The data available in the land use maps prepared by the Department of Survey (DS) indicate the land use in Greater Colombo area is as summarised in Table 1.3.

16 For a fuller description of the surface waters, particularly their environmental condition, see Volume 11.

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Table 1.3 - Extent of Land Usage (Agricultural land showing key crop)

Land Use Category Extent (km2) Percentage of Total Area Urban areas 313.32 52.70 Homesteads 163.23 27.46 Paddy 77.84 13.09 Marsh 33.10 5.57 Coconut 3.93 0.66 Other crops 1.54 0.26 Water bodies 1.53 0.26

72. Based on information available at DS offices a more detailed breakdown by area is presented in Table 1.4 below. Note that there are some inconsistencies with Table 1.3, but these are not considered significant.

Table 1.4 - Land Usage by DS Division

DS Division Land Use Category Extent (ha) Percentage Colombo- North & Central Residential 2029 52.3 Commercial 287 7.4 Industrial 184 4.7 Institutions (Educational, Cultural, 284 7.3 Religious &Health) Transportation 81 2.1 Mixed residential, commercial and 42 1.1 administrative Open lands 368 9.5 Parks/Playgrounds/ 283 7.3 Cemeteries, etc Grasslands 152 3.9 Scrub-lands 10 0.3 House grounds 48 1.2 Partly cultivated 28 0.7 Under water 77 2.0 Barren Lands 7 0.2 Dehiwala Cultivated area 60 47.6 Uncultivated Area 54 42.8 Uncultivable area 12 9.5 Timbirigasyaya Residential 1207 54.8 Commercial 113 5.1 Industrial 85 3.9 Administrative 15 0.7 Transportation (bus-stands) 13 0.6 Residential & commercial mixed 92 4.2 Roads 290 13.2 Institutional (educational, cultural, 324 14.7 religious & health) Grasslands and marshes 62 2.8

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DS Division Land Use Category Extent (ha) Percentage Kolonnawa Houses Roads & Industries 2003 58.9 Cultivable lands 424 12.5 Uncultivable lands 274 8.1 Coconut 118 3.5 Rubber 4 0.1 Paddy 88 2.6 Vegetables & Fruits 178 5.2 Barren lands 32 0.9 Marshes 279 8.2

1.10 Colombo Development Plans

73. Increasing urbanisation18 needs to be catered for in any proposals relating to the sewerage system. At a high level the system capacity needs to broadly increase in line with the growth in population, together with any increases in per-capita consumption associated with increased wealth or economic activity. At a more detailed level it is necessary to investigate the expected spatial distribution of the population within economic categories in order to assess different unit water usage and return to sewer flows, in order to assess the sewer network capacity and requirements within catchments.

74. The Western Region Structure Plan has studied general population trends within Colombo and produced estimates of future growth within the region. It has also developed proposals for the future land-use plan for the Colombo Core Area19.

75. The following extracts, Table 1.5, from the WRSP indicate the historical population growth within Colombo.

Table 1.5 - Population Growth in the Western Region

District/ Census Survey Census Population Absolute Region (1981) (1994) (2001) Growth (%/yr) Increase of Population 1981- 2001 1994- 2001 1994- 2001 Colombo 1,699,241 2,057,354 2,234,146 1.35 1.21 176,792 Sri Lanka 14,846,750 N.A. 18,732,225 1.14 N.A. N.A.

76. It can be seen from the above that the population of the Colombo district has increased from 1.7 million in 1981 to 2.0 million in 1994 and to 2.2 million in 2001. Between 1981 and 2001, the annual rate of growth in Colombo has been 1.35% per annum, whereas the total population of Sri Lanka has experienced an average annual rate of growth of 1.14% per annum.

77. Although the WRSP states that the estimates of future population growth is indicative, this represents the best currently available information. Table 1.6, extracted from the WRSP, suggests whilst overall there is expected to be an increase of some 64% between 2001 and 2030, the Colombo Core area, is expected to experience a rise of only 30%, equivalent to an annual growth rate of a little under 1% per annum.

18 The information provided within the Final Report is only that necessary to explain the background to the Flow Calculation Report. Full details of the planning proposals for Colombo are to be found in the WRSP, updated as appropriate by the UDA’s latest reports. 19 See Definitions

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Table 1.6 - Projected Populations in Colombo District

Districts Population (Millions) 2001 2010 2020 2030 Colombo 2.23 2.70 3.30 3.65 Core 1.3 1.5 1.6 1.7 Inner Ring 0.68 0.90 1.3 1.45 Outer Ring 0.25 0.30 0.4 0.50

78. The WRSP indicates that inward migration will assert a significant influence on the population highlighting that overall, Sri Lanka has shown a relatively slow natural growth. The lifetime net migration rate of Colombo district has increased from 5.0% in 1981 to 11.2% in 1994.

79. Although net migration rates20 within various regions of Sri Lanka have been affected by military activities, especially in the north and east areas, Colombo and the satellite town of have experienced a net inward migration. Such a migration to the principal city of the country is to be expected and is typical of many Asian countries.

80. WRSP argues that due to the high value of land in the Colombo Core area, it is expected that the future occupants of the area will come from the middle to high-income sectors and that the majority will be housed within apartment type, high quality accommodation. WRSP further suggests that the low-income group will move out of the core area into peripheral settlements where the cost of land is significantly lower. The WPSP removed the cap on high-rise construction altogether and considerable high-rise building is now taking place within Colombo in and around the historic centre of the city.

81. The WRSP latest plans propose a change to the land-use in Colombo with an expansion of the commercial areas, and it expects land-use change to have stabilized by 2030. Proposed land usage within the sewered areas, according to pumping station catchment is shown in Table 1.7.

Table 1.7 - Land Usage within Pumping Station Catchment

Pumping Station Land-use Catchment (as a percentage of the total in the catchment) Institutional Commercial Industrial Residential High-rise Slave Island 18 67 0 9 6 Polwatta 26 42 0 25 7 Borella 19 23 3 49 6 Thibirigasyaya 18 8 2 65 7 Bambalapitiya 5 24 0 24 47 Peterson Lane (S8) 7 20 0 61 12 Wellawatte 7 32 0 30 31 Wanathamulla 14 7 0 64 15 17 30 0 28 25 Madampitiya 14 28 14 23 21 Harbour 5 15 14 4 62 St John’s Market (CS3) 0 98 0 1 1

20 Using data are from the 1981 General Report, Dept. of Census & Statistics and 1994 data are from the Demographic Survey.

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Pumping Station Land-use Catchment (as a percentage of the total in the catchment) Institutional Commercial Industrial Residential High-rise Vystwyke 11 24 37 20 8 Kollonnawa (KPS1) 1 0 63 36 0 Wellampitiya (KPS2) 3 6 0 64 27 Meetotamulla (KSP3) 0 4 0 65 31

82. The 2006 population within the project area is estimated as 884,700. This is based on 205,740 households and a household size of 4.321. Table 1.8 projects future population based on assumed annual growth rates of 1% and 1.25%. An appropriate population figure for the project area for 2030 is 1.222 million.

Table 1.8 - Estimates of Future Population in Project Area

Year Population assuming 1% annual Population assuming 1.25% annual growth growth 2006 884,700 884,700 2020 1,017,000 1,052,800 2030 1,123,300 1,222,000 2035 1,180,600 1,268,400

83. The spatial distribution of the future population of Colombo, as set out in the WRSP, together with comments and guidance from the Urban Development Authority, has been the basis of the land use plans and densities used for the projected 203022 wastewater flows within the principal sewers.

21 This is discussed in Volume 7, Section 2.4 22 2030 is the 20 year design horizon from 2010

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2. Project Preparatory Technical Assistance.

2.1 Project Preparatory Technical Assistance Objectives

84. The objective of the PPTA is to provide a strategic approach to guide the development of wastewater service provision within Gt Colombo that will lead to a proposal for an ADB financing loan, or series of loans. The recommendations of the PPTA are built around and derive from the strategy; matching the current status of the service against the strategy and evolving policies for the changes that are needed.

85. The main output of the PPTA is a Feasibility Study for a programme of capital works that will have the objectives:-

(i) To improve management of the sewerage assets; (ii) To improve the quality of the environment; improving health and reducing pollution;

86. The PPTA reviews the shortcomings that were identified in previous studies, particularly those of the Greater Colombo Sewerage Project (GCSP) and proposes current technical and managerial improvements to address those issues.

87. Within the PPTA are prepared the financial, economic, environmental, social, resettlement and gender assessments and studies that will first enable an ADB loan to be scoped and sized and secondly will ensure that the conditions are appropriate for the loan.

88. The PPTA has three components and six sub-components:

Component 1: Developing and improving sewerage infrastructure within Greater Colombo.

Subcomponent 1a: Rehabilitating the existing sewerage network;

Subcomponent 1b: Expanding sewerage to un-sewered or under-served areas within the Colombo sewer system boundary;

Subcomponent 1c: Providing on-site sewerage facilities within the outer areas of Greater Colombo.

Component 2: Institutional strengthening

Subcomponent 2a: Establishing the NWSDB Wastewater Management Unit;

Subcomponent 2b: Developing CMC’s operational capacity;

Subcomponent 2c: Developing the DMMC’s operational capacity.

Component 3: Building Management and Implementation Capacity

89. The resultant Greater Colombo Wastewater Management Project is intended to:-

(i) Improve access to publicly owned sewerage infrastructure in low income areas;

(ii) Improve system performance through a programme of system rehabilitation;

(iii) Provide institutional strengthening to improve financial and asset management for a new NWSDB wastewater management unit;

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(iv) Prepare a sound financial strategy including cost recovery for the wastewater sector.

90. The Feasibility Study is to include:

(i) A strategy for the sewerage service within Greater Colombo and an overview of the PPTA recommendations (see Volume 1);

(ii) Recommendations for an investment project for the rehabilitation of the exaiting Colombo sewer system, suitable for financing by ADB and taking account of recent development plans for the main sewered areas (Component 1a – see Volume 2 Part A of the Final Report);

(iii) Recommendations for increasing coverage to currently under-served areas within the boundary of the Colombo sewer system (Component 1b – see Volume 2 Part B);

(iv) Preparation of three pilot studies for provision of improved sanitation in the on-site areas (Component 1c – see Volume 3);

(v) Preparation of bidding documents for the Colombo sewer rehabilitation works, Terms of Reference for subsequent studies and institutional support, and other procurement documents (see Volume 4);

(vi) Institutional Assessment and Plan including full institutional arrangements and institutional requirements for compliance and performance monitoring (Component 2a, b and c – see Volumes 5 & 6);

(vii) Economic analysis of the proposed works (see Volume 7);

(viii) Financial analysis of the sustainability of the investment and a financial management assessment of NWSDB (see Volume 8);

(ix) Social and Poverty Analysis including a socioeconomic analysis and willingness to pay, a social and poverty impact assessment, a gender analysis and action plan (see Volume 9);

(x) A Resettlement Plan and Resettlement Framework for Colombo sewer rehabilitation, first-time sewerage and on-site pilot studies, and a Framework for a Public Awareness Campaign (see Volume 10);

(xi) Initial Environmental Examination (IEE), with Summary, and an Environmental Management Plan for the Colombo sewer rehabilitation works and for first-time sewerage schemes within the under-served areas and IEE’s for the on-site pilot studies (see Volume 11).

91. The PPTA includes for Public Disclosure of GCWMP, in accordance with ADB Guidelines.

2.2 Past Studies

92. The principal past studies have been a Wastewater Master Plan for the Greater Colombo area published in 1981 that included for sewage collection and disposal prepared by the American consulting company Engineering Science Inc. and upon which the present system is based; the Greater Colombo Sewerage Project 23 (GCSP) in 1999 and the 2004 Small Scale Technical Assistance24 (SSTA): Sri Lanka Greater Colombo Wastewater Management Sector Review.

23 Greater Colombo Sewerage Project: Sewerage Rehabilitation Proposals for Colombo, April 1999 funded by Department for International Development, UK. 24 ADB SSTA4184 – Sri Lanka Greater Colombo Wastewater Management Sector Review, August 2004

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2.3 Need for a Strategy

93. As set out later within this Volume and elaborated more fully within other Volumes of this Final Report, the sewerage sector in Greater Colombo is not attracting sufficient investment because:

(i) Although appropriate Government policies are in place, potential international funding institutions seek proof of intent to implement these policies and this has been lacking;

(ii) At an operational level, the lack of maintenance and incorrect operation of the main sewered areas are contributing to system failures rather than maintaining the serviceability and capability of the assets;

(iii) Without a sewage service charge, the NWSDB does not have the necessary revenue to fund adequate O&M of the systems, or the cost is borne by the potable water charge payers.

94. The lack of an undisputed asset owner together with the lack of an adequate, performance driven framework for the operation and maintenance of the assets, jeopardises the sustainability of capital investments within the system.

95. For these reasons, potential international investors have doubts about making investments within the Greater Colombo sewer system - investment that is essential if the necessary rehabilitation; phased replacement and development for growth and increased coverage are to be achieved for the continued improvement in health, quality of life and the environment within Colombo.

96. In this context, a series of studies have taken place addressing both technical/operational and institutional issues associated with the sewerage service provision within Gt Colombo.

97. In 1999, W S Atkins International Ltd was selected by the Department for International Development of the UK, to undertake the Greater Colombo Sewerage Project (GCSP), which identified rehabilitation requirements as a precursor to future implementation funding anticipated, at the time, to be the World Bank Fourth Loan.

98. Drawing upon the strategy proposed within the GCSP, an Asian Development Bank (ADB) funded Small Scale Technical Assistance (SSTA)25 was prepared in August 2004 with the objective of helping the NWSDB to prepare:

(i) A strategy to improve the performance of the existing sewerage systems; (ii) An investment strategy to increase access to appropriate sanitation systems; (iii) A financial strategy for the sector.

99. Following the signing of a MoU between the Government of Sri Lanka and the ADB, the ADB approved this PPTA.

100. One of the objectives of the PPTA is to develop the previously propounded conclusions of the SSTA into a clear, long-term strategy for the sewerage sector within Gt Colombo.

101. Accordingly, within the PPTA a strategy has been developed to address how the current issues relating to wastewater management facing Gt Colombo can be tackled, over a horizon of 20 years (2010 to 2030). The strategy assesses the current position; identifies the areas where change is sought by stakeholders; discusses options and recommends actions to achieve the changes.

25 SSTA 4184 – Sri Lanka: Greater Colombo Wastewater Management Sector Review by Nippon Koei UK in association with Ceywater Consultants (Pvt), in August 2004.

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102. The strategy addresses: the institutional and structural changes desired by stakeholders; the issue of a wastewater tariff and the required capital works programme, and additionally considers some of the wider issues facing sewage collection and disposal in the Gt Colombo area, such as the need for a vision for the long-term disposal of sewage from Colombo that could include full treatment.

103. The strategy has been formulated around the following three questions:

(i) Where is the service provision now? (ii) Where do stakeholders want it to be? (iii) How should NWSDB move from the current situation to where it wants to be?

104. The stakeholders to GCWMP would wish the strategy adopted to be directed towards ensuring that the service provided is best international practice, as in Table 2.1:

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Table 2.1 - Best International Practice

Activities NWSDB must Best Practice Requirements Benefits

The Service to Customers

Collect wastewater from customers; Ensure adequate capacity within the Produce and maintain Wastewater Accurate monitoring and measuring of system for new and existing Master Plans; wastewater flows; Respond effectively to customer enquiries and customers; requests for service; Maintain a Customer dataBase and Baseline upon which to plan Meet varying customer requirements; Trade Effluent Register; optimisation of sewerage network; Ensure customer bills are correct and provide “value for money” Deal proficiently with customer Prepare and operate mathematical Data for tariff setting and OPEX contacts and complaints; model of system; budgeting; Meet appropriate Levels of Customer Service Provide network coverage of service Report performance against Levels of Levels of Customer Service met; area; Customer Service; Customer confidence in the ability of Prepare and publish target Levels of Establish working relationship with the NWSDB. Customer Service. customer service regulator and other customer organizations.

Sewer System and Disposal

Adequate hydraulic capacity; Assess the structural and hydraulic Prepare and maintain drainage area Optimization of infrastructure; performance; plans as a part of Wastewater Master Serviceability of the system; Plans; Meeting all customer requirements Identify network and efficiency and Levels of Service; Pumping efficiency and scheduling; improvements; Establish and maintain an Asset Inventory Register; Integrated network management; Prevention of storm-water ingress; Optimise pumping regimes; Prepare strategic infrastructure plans Timely effective investment. Appropriate disposal of sewage; Proactively maintain and replace and improvement strategies, within an infrastructure; Screenings, grit and other waste disposed of AMP approach; with no adverse environmental impact. Analyse flows to determine storm- Establish working relationship with water flows & ingress; quality regulator; Identify cost effective and Ensure that industrial discharges are environmentally responsible disposal compliant with regulations and methods. standards;

Sample wastewater quality, prior to discharge;

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Activities NWSDB must Best Practice Requirements Benefits

Operation and Maintenance Maintain the assets; Adopt a policy of planned preventative Meeting Operational Performance maintenance; Standards; Ensure the availability of the assets; Comply with environmental obligations; Identify and manage risk; Meeting environmental and legislative Minimum number of pollution events; requirements; Plan for emergencies; Operate within a formal management Minimise complaints of odour and other operating contract; Meeting Customer Levels of Service nuisance; Work to Codes of Practice and industry standards; Benchmarking against comparable Training of staff; sewerage utilities for operational Continuous monitoring of performance; quality/standard;

Manage and monitor the performance of its operators – in house and external.

Commitment to the Community Act as a “good customer” to suppliers Be a “good” neighbour;

Seek to improve local employment through local Work closely with Municipal Councils Consult stakeholders in the decision Enhancement of reputation; job creation; and NGO's; making process; Added value to quality of community Local supplier preferences; Minimise nuisance to others;; Hold open days; life

Health promotion; Become involved in local campaigns; Give talks to schools and local Management of assets in context of voluntary organizations and local community needs; Meeting needs of local community; Participate in appropriate steering professional groups. groups and committee; Maintaining employment in areas; Open days and site visits Prepare education programmes for Active role in the community; schools; Local employer; Community sponsorship;

Regularly meet wider stakeholders.

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3. Legal Framework and Government Policy towards the Sector

3.1 Institutional Structure

105. The Government has a clear strategy within which the roles of policy makers, the regulatory authorities and the wastewater service providers are separate and autonomous. Such a strategy, which is now generally recognised as international best practice and the most attractive for investment, comprises:

(i) The National Government, which: a) Sets policy b) Enacts necessary legislation c) Sets Levels of Customer Service and Operational Standards (ii) The Environmental Regulators who monitor and enforce compliance with regulations and licenses, and, where appropriate, issue licences and derogations relating to: a) Raw water abstraction; b) Wastewater discharge; c) Potable water quality; (i) The Economic Regulator who sets tariffs & protects the customer interests (ii) The Service Providers as asset owner and/or operator.

106. National Government Ministries with an involvement within the water sector are shown in Table 3.1, and the regulators in Table 3.2:

Table 3.1 - National Government Ministries

Ministry Department and Statutory Key Responsibilities (relevant to water sector) Organizations (relevant to water sector)

Ministry of Urban (i) Urban Development (I) Formulation of policies, programmes and Development & Authority (UDA) projects in respect of Physical Planning and Sacred Area Urban Development and assistance in Development (ii) Urban Development implementation of such programmes and and Low Income projects; Housing Project (II) Urban Planning and Development; (iii) Colombo Environment Improvement Project (III) Assist Urban Local Authorities to improve (CEIP) urban Infrastructure facilities and housing;

(iv) Sustainable Cities and (iv) Provision of public utility services to under Township served Settlements; Development Project (v) Environmental Improvement in Colombo (v) Community Water Metropolitan Area; Supply and Sanitation Project (CWSSP) (vi) Provision of water supply and hygiene education services in rural areas;

Ministry of Water NWSDB (i) Formulation of policies, programmes, Supply and projects based on National Policy in respect Drainage of water supply & public utility services and assistance in implementation of such programmes and projects;

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Ministry Department and Statutory Key Responsibilities (relevant to water sector) Organizations (relevant to water sector)

(ii) Investigation, planning, design, construction, operation and maintenance of water supply services and sewerage and sanitation facilities.

Ministry of Local (i) Implementation of policies, plans and Government and programmes in respect of Provincial Provincial Councils and Local Governments; Councils (ii) All matters relating to Provincial Councils;

(iii) Government functions relating to Local Authorities;

(iv) Grant of Loans to Local Authorities for Public Utility Works.

Ministry of (i) Central Environmental (i) Implementation of policies, plans and Environment and Authority programmes in respect of Environment and Natural Natural Resources; Resources (ii) Marine Pollution Prevention Authority (ii) Prevention of Marine pollution;

(iii) Environmental Protection and Management;

(iv) Conservation of River Catchments and major reservoirs;

(v) Conservation and sustainable development of natural resources;

Table 3.2 - Regulators

Regulator Objectives

Central Environmental (i) The Central Environmental Authority (CEA) was established in Authority August 1981 under the provision of the National Environmental Act No:47 of 1980. The CEA was given wider regulatory powers under the National Environment (Amendment) Acts No:56 of 1988 and No:53 of 2000. It’s objectives are:

a) Protection, management and enhancement of the environment;

b) Regulation, maintenance and control of the quality of environment;

c) Prevention, abatement and control of pollution.

(ii) The Central Environmental Authority is the key agency with powers to enact regulations for wastewater pollution control.

(iii) For all BOI registered industries, the CEA has delegated its powers to enforce the regulations to the BOI. The pre-treatment standards currently applied to the industries within the BOI owned processing zones are not national standards but BOI’s own requirements.

(iv) The implementation of the CEA regulations for certain industrial sectors can be delegated to the Local Authorities. However, due to lack of institutional capacity this function has not been effectively transferred to the LAs at present. Hence, the CEA continues to monitor the implementation of the regulations fully.

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Regulator Objectives

National Water Resources Government established the NWRA in 2001 with the functions of: Authority (i) Water resources Management Policy; (ii) River Basin Planning & Other Water Planning; (iii) Coordination and Collection of Data; (iv) Water Allocation; (v) Drought/Flood Management; (vi) Control of Riverine Activities; (vii) Public Information & Awareness;

Coast Conservation Dept. The mandate of the CCD is for conservation and management of the (CCD) for the Coastal Zone coastal environment in areas lying within the Coastal Zone, defined in the CCA of 1981 as the area lying within a limit of 300 m landward of the Mean High Water Line (MHWL) and a limit of 2 km seaward of the Mean Low Water Line (MLWL); in the case of rivers, streams, lagoons, or any other body of water connected to the sea either permanently or periodically, the landward boundary extends to a limit of 2 km measured perpendicular to the straight base line drawn between the natural entrance points thereof and includes the waters of such rivers, streams and lagoons or any other body of water so connected to the sea. All beaches in Sri Lanka are public property in accordance with the Coast Conservation Act.

Public Utilities Commission The Public Utilities Commission was established by the Act No 35 of 2002 as a multi-sector regulator to regulate certain physical infrastructure industries in the country. It came into operation in mid 2003 with the appointment of the first group of Commissioners and its Director General. Its objectives are:

(i) Protecting the interests of the consumers (ii) Promoting efficiency in both capital investment and operations in the utility industries (iii) Promoting efficient allocation of resources within them (iv) Benchmarking of utilities against international standards (v) Promoting safety and service quality (vi) Ensuring that the price controlled entities act efficiently.

107. Alongside the PPTA, a second TA - ADB TA 4049 - aims to develop and disseminate regulations for the water sector within the framework of the Public Utilities Commission (PUC)

108. The expected output of this second TA is: “an adequate draft of the amendments to the NWSDB Act and implementing guidelines to achieve the objective of independent, autonomous, accountable, and transparent regulation of this section of the water supply industry, where

(i) authority, functions, and tasks of the regulatory bodies, their institutional and organizational structure and their relationship with government organizations and the judiciary are clearly set out;

(ii) competitive, transparent, accountable and efficient conduct is promoted;

(iii) licensing requirements and procedures are in place;

(iv) tariffs and service levels and related performance targets are clearly and unambiguously regulated and monitored on the basis of incentives, where possible and based on the World Bank or other benchmarking studies where applicable;

(v) proper penalties, enforcement and appeals mechanisms are in place;

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(vi) consumer rights, including handling of complaints, and obligations are set out with particular attention to the poor, including providing a basic service at an affordable price;

(v) responsibilities of water enterprises to the regulators, such as supply of information and audits are specified; and

(vi) public participation education and consultation are provided. All items covered should include both water and sewerage services.”

109. Based upon examination of the legal documents; the conclusions of previous Studies and from discussions with the NWSDB and the CMC, the existing legal framework is comprehensive and no additions or refinements are considered necessary. The issues to be addressed relate to the application, enforcement and monitoring of the Laws and Regulations; not to the existence of appropriate laws and regulations.

110. Whereas the legal and regulatory framework is in place for a proficient wastewater service; the institutional organization or capacity is either not in place or is insufficient for the task. The sector is not attracting the investment it needs for Gt Colombo, primarily because the institutional arrangements for a sustainable operations and maintenance function are not proving effective. Not only do the policies have to be in place but they must be seen to be effectively implemented. Sector reform is necessary to improve the levels of service achieved but also to attract the capital funds necessary to ensure the continued availability and sufficiency of the network.

111. A similar situation pertains to the on-site areas where the requirement is not for new laws and regulations but for institutional development within the local authorities and, to a lesser extent, in the CEA and UDA, to improve monitoring and enforcement of the regulations which have been put in place by the CEA.

112. The SSTA commented that the regulatory framework, in place at that time, did not quite match international best practice and thus may be a disincentive to investors. This opinion is not supported within the PPTA and it is to be expected that recommendations will be made to correct any concerns within the report of ADB TA 4049.

3.2 Relevant Laws

113. The following are the principal laws concerning wastewater collection and disposal within Sri Lanka:

(i) National Water Supply and Drainage Board Law, No. 02 of 1974 as amended by the National Water Supply and Drainage Board (Amendment) Act, No. 13 of 1992. (NWSDB Law) established the NWSDB as a public authority. The Minister of Housing and Urban Development is empowered in consultation with the Minister in charge of Local Government, to declare any area in Sri Lanka, an area of authority of the Board. Within an area of authority of the Board, it is the duty of the Board to provide water supply and to distribute water for public, domestic or industrial uses and to provide a sewerage system. It is the duty of the Board to take over and carry on any sewerage undertaking formerly of the Department of Water Supply and Drainage and transferred to the Board in terms of section 57 of the Act and to carry on a sewerage undertaking of any local authority transferred to the Board by a voluntary transfer order or a compulsory transfer order. Any direct discharge of sewage into a watercourse is illegal under this law and the National Environmental Act, as is any unauthorised connection with the sewerage system. Within an area of authority, the board is empowered to construct:

a) Sewers; b) Appurtenances; c) Outfalls; d) Treatment works;

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e) Other works for the effectual collection and disposal of sewerage.

(ii) The National Environmental Act, No: 47 of 1980 as amended by Act No: 56 of 1988 and the National Environmental (Protection & Quality) Regulations, No. 1 of 1990, establish discharge standards and makes it an offence to discharge, deposit or emit waste into the environment which will cause pollution except a) under the authority of a license; and b) subject to such standards and criteria prescribed. The National Environmental (Protection & Quality) Regulations, enacts the necessary regulations for the implementation of this part. The license issued hereunder is called the Environmental Protection License, is issued for a period of one year and is renewable.

(iii) The Urban Development Authority Law, No. 41 of 1978 and The Urban Development Authority Planning and Building Regulations, 1986 relate amongst other things, to the approval of building plans and establishes the necessary standards and criteria for such approval. The said regulations make it clear that the primary means of sewerage and waste water disposal is by connection to an existing public sewerage system. Where such public sewerage system does not exist or where the outlet cannot be connected to the public system, sewerage is to be disposed through a septic tank and waste water through a soakage pit. Every building is also to be provided with adequate drainage facilities to drain off and convey the rain water from the roof to a street drain or other approved outlet. The said law also refers to the submission of Building Plans and issuing of Certificates of Conformity.

114. The legal provisions relating to on-site sanitation facilities are provided under several Acts, Ordinances and Regulations. They include the Nuisance Ordinance, the Quarantine and Prevention of Diseases Ordinance, the Town and Country Planning Ordinance (Physical Planning Act), the Housing and Town Improvement Ordinance, the Local Authority Regulations, the UDA Act and also the National Environment Act and EPL Regulations.

115. In addition to the above, there are Regulations and Ordinances in place relating to the construction of, and connection to, sewers as well as others relating to their maintenance.

3.3 Government Policy for Wastewater Management

116. The Government’s specific goals in the sector 26are:

(i) Access to adequate sewerage systems to be provided for 70% of the population by 2010 and 100% by 2025; (ii) Conventional sewerage to be provided to major urban areas and selected growth areas.

117. Standard on-site sanitation is to be provided to those who are not connected to conventional sewerage systems or other sanitation schemes.

118. The principal aims of the Government Policy are to:

(i) Reform the structure for service delivery to provide incentives for efficiency, attract private sector participation, improve accountability, and support community involvement, while ensuring adequate provision for low-income groups;

(ii) Bring the sector under the institutional framework regulated by the PUC to create a transparent, fair and stable regulatory environment;

(iii) Sustain service delivery in this sector by increasing the tariff to reflect the cost of an efficient service, decreasing the cost by increasing operational efficiency while ensuring the affordability for low-income groups;

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(iv) Allocate resources based on socio-economic criteria to ensure equitable distribution of investment across the country;

(v) Adopt a holistic approach in source protection and water conservation to ensure a concerted effort in protecting drinking water sources, preventing pollution, ensuring adequate supply, encouraging the conservation and reclamation and reuse of water, and minimising the environmental impact of wastewater discharge.

119. Two of the key Guidelines for the Development Strategy is that the planning functions of the NWSDB should be separated from the operations and that regional cost centres should be established to monitor operational costs.

120. A National Sanitation Policy has been drafted and is in the process of implementation.

121. Sound Government policies exist and the Government has established goals and objectives for the wastewater sector to achieve, as well as enabling laws to encourage investment within the sector. It is important that all necessary institutional and capacity improvements to ensure the effectiveness of the Regulatory regime for customer service are identified and implemented.

3.4 External Assistance to the Sector in Sri Lanka

122. Previous external assistance to the sewerage sector within Sri Lanka is shown in Table 3.327.

Table 3.3 - Investment Projects

Project Name Year Source Amount Approved (Million)

A. Loan-Financed Investment Projects

Rehabilitation and Upgrading of Southern 2007 Austria 10.70 (Euro) Catchment of the Greater Colombo Sewerage System

Central Wastewater Treatment Plants for 2006 Sweden 100.00 ($) , & Ja-Ela/Ekala Areas

Greater Colombo Sewerage 2005 Denmark 33.00 ($) Rehabilitation Project

Secondary Towns and Rural Community 2003,2006 ADB 120.30 ($) Based Water Supply and Sanitation Project

Greater Water Supply & 2001 Japan 115.20 ($) Sanitation Project

Community Water Supply & Sanitation 2001 World 20.00 ($) Sector (Phase II) Bank

Koggala Water Supply & Sewerage 1999 Germany 07.00 ($) Project

Third Water Supply & Sanitation Project 1999 ADB 75.00 ($)

Anuradhapura Water Supply & Sanitation 1999 France 05.60 ($)

Colombo Environmental Improvement 1995 World 39.00 ($) Project Bank

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Project Name Year Source Amount Approved (Million)

B. Grant-Financed Investment Projects

Feasibility Study for and Galle 2006 USA 0.5 ($)

Sewer Cleaning Equipment 2005 Japan 146.00 Y

Greater Colombo Wastewater 2004 ADB 00.85 ($) Management

Participatory Improvement of 2003 Germany 05.00 Euro Underserved Settlements in Colombo

Greater Colombo Wastewater 2003 ADB 00.15 ($) Management Sector Review

Hikkaduwa Sewage and Waste 2000 Australia 02.50 ($) Management Project

Greater Colombo Sewerage Project 1997 UK 03.20 ($)

3.5 Ownership of the Colombo Wastewater Assets

123. The situation regarding the ownership of the wastewater assets within the CMC are is ambiguous. Legal opinion has been sought as a task within the PPTA of which the following is a summary.

124. The process for the transfer of the wastewater assets from the CMC to the Water Board is set out in the NWSDB Law and may be achieved through a voluntary or compulsory (mandatory) process.

125. In view of the importance of the continuation of an adequate and professional service during any change of ownership, the transfer is best achieved on the basis of a voluntary transfer rather than compulsory, with the inherent risks that such a transfer would incur.

126. Documents held by the NWSDB in respect of the most recent transfer of the CMC sewerage undertaking to the Water Board (1996) refer to a “voluntary transfer scheme” and bear the seal of the Water Board and of the CMC.

127. Thereafter, by Gazette dated 5th September.1996, a ‘voluntary transfer order’ has been Gazetted in respect of the transfer of the sewerage undertaking of the CMC to the NWSDB. This gazette had been published with the concurrence of the Minister of Co-operatives, Provincial Councils, Indigenous Medicine and Local Government and also the Minister with responsibility for Local Government of the Western Provincial Council. Thus, the concurrence of both Ministers concerned with the subject of Local Government i.e. the relevant Minister of the Government and also of the Western Provincial Council, has been obtained. The said ‘voluntary transfer order’ seeks to transfer to the Board the sewerage undertaking carried on by the CMC and the assets, certain property both movable and immovable, certain rights, obligations and liabilities and certain agreements connected with such sewerage undertaking.

128. The Voluntary Transfer Order, states that it comes into effect from the date of the Gazette notification i.e. 5th September 1996. From the ‘voluntary transfer order’ published in the Gazette it is presumed that the steps leading up to it, have been duly complied with and the transfer duly effected.

129. However, it was not possible to ascertain whether the following steps had been completed in respect of the transfer:

(i) Obtaining Parliamentary approval for the ‘voluntary transfer Order’ of 1996,

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(ii) Taking possession of the property for and on behalf of the Water Board and the issuance of a Certificate to that effect.

130. In fact, notwithstanding the transfer, the CMC has continued to operate and maintain the asset while the Water Board has from time to time put in certain capital works.

131. The conclusion of the legal opinion is that it is not possible to confirm that all the steps required for the transfer of the CMC wastewater assets to the NWSDB have been fully completed in terms of the law. If the inability to trace Parliamentary approval for the ‘voluntary transfer Order’ and the taking over of the assets is because there was never any such approval given, the CMC could potentially challenge the transfer at a future date.

132. Ownership of the wastewater assets requires to be settled. We have assumed that it remains Government policy for the assets to be owned by the NWSDB which will be consistent with ownership of the potable water assets and will enable the Board to meet its obligations as the wastewater Authority in Colombo. Discussions are taking place between the NWSDB and the CMC and these are expected to lead to an amicable resolution of the issue.28

133. As concluded within the SSTA, capital investments within GCWMP should be linked to the recommended changes in institutional arrangement. This will ensure a more efficient and effective operation and maintenance function, and is necessary to ensure the sustainability of investments made within the Colombo wastewater infrastructure.

28 Comment from NWSDB, 20th October 2007

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4. Strategy for the Main Sewer Area

4.1 Wastewater Infrastructure

134. The following is a summary of the existing wastewater assets that comprise the Colombo Sewer System. A fuller description is found within Volume 2.

135. The system was first built in 1906-1916 when 100km of sewer were laid. The system was extended and rebuilt in the 1980s and 1990s. Consequently, significant parts of the system are less than 20 years old. About 80% of the system comprises pipes of less than 300mm diameter, both clay and, more recently, uPVC. Sewers up to 375mm have been constructed of vitrified clay( glazed stoneware) but between 450 and 600mm are of concrete. Some of the older sewers are egg-shaped and were cast in-situ, unreinforced concrete using Ordinary Portland Cement. Pumping (force) mains are often cast iron, with run lead joints. The concrete pipes are suffering from acid attack, whereas the clay pipes are generally immune.

136. The collection system within Colombo comprises two separate systems, one draining to the north and the other to the south. Originally, the systems delivered wastewater to two treatment plants but these were closed around 50 years ago: that for the northern catchment reportedly because of operational problems and that in the south reportedly due to complaints of nuisance and odour. Wastewater is now discharged, without treatment, into the Indian Ocean through two long sea-outfalls at Wellawatte and Mutwal.

137. The NWSDB consider the total public sewer network to comprise 326.7km of gravity sewers 29 and pumping mains, as shown in Table 4.1 .

Table 4.1 - Summary of Sewer Materials

Vitrified Clay Ductile iron Concrete uPVC Total 274,283m 8,151m 26,753m 17,533m 326,719m

138. There are 18 pumping stations in the network.

4.2 Specific Concerns with the Existing Infrastructure

139. From study of the “Sewerage Rehabilitation Proposals for Colombo” prepared within the Greater Colombo Sewerage Project; from discussions with operational staff at the CMC and with the NWSDB engineers and from our own observations and experience of the Colombo system, that there are a number of concerns over the condition and performance of the sewer network. The Greater Colombo Wastewater Project is planned to address many of these.

140. The key conclusions of the Greater Colombo Sewerage Project, were that:

Although the city’s piped system is old, much of the fabric is in good condition and the main reason for its poor performance is due to inefficient operation.”

and:

“with regular inspection and, where necessary, maintenance can be expected to give (the system) at least 50 years more service.”

141. The problems that we consider need addressing within the Greater Colombo Wastewater Management Project are summarised below:

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(i) Repairs are required to the sea outfalls, a new diffuser is required as well as new access points. The outfalls need to be cleaned of accumulated deposits of grit

(ii) There is no fine screening or grit removal to the sewage prior to discharge through the sea outfalls. When this treatment is provided there will also need to be a means of disposal of both the screenings and the grit collected at the sea outfall head works and at the upstream pumping stations;

(iii) The condition, reliability and efficiency of the pumping stations: the pumping plant, ancillary equipment and the buildings;

(iv) Lack of operational screens and grit removal equipment at the pumping stations;

(v) Lack of operational standby generators;

(vi) There is little level difference between the inverts of the wet wells and inverts of the incoming sewers. This means in practice that the wet wells often cannot be operated at a low enough level to allow the incoming gravity sewers to freely discharge into the wet well. This results in low flow velocities in the sewers and silt and grit deposition;

(vii) Due to the lack of or broken pump water seals and priming systems, the pumps do not self prime. Pumps cannot be started without first “priming” by allowing wastewater to “back-up” the incoming sewers to provide a positive suction head. This also results in silt deposition within the incoming sewer;

(viii) Some sewers are of insufficient capacity for the current of projected flows;

142. Silt and large matter enters the sewers through open manholes, road gulley connections. People occasionally use the manholes as a ready means of solid waste disposal. Silt also enters the system where pipes are damaged often causing blockages within the system, especially at the siphons, with consequential overflows of sewage to the roads and inland watercourses30.

143. As well as contributing to the blockages, the debris has been a contributory cause of the failure of the de-gritting equipment originally installed at the pumping stations, to protect the pumps. Consequently, the pumps are not protected and the presence of the grit and other debris has contributed to the accelerated wear of the pump impellers.

144. Some of these problems have been exacerbated by the lack of spare parts within the stores system, meaning for example that missing manhole covers have not been speedily replaced.

145. As an expedient way of relieving local surface flooding, cross connections have been made between the foul and surface water drainage systems. This further contributes to silting of the sewers and wear on the pump impellors, as described above. The additional storm water flows also reduce the available capacity of the sewerage network and increase pumping costs. The cross-connections also permit sewage to pass into watercourses.

146. In addition to the concerns about the physical condition of the assets, the network is laid out such that sewage pumped by pumping stations predominantly gravitates to a downstream station, with the final pumping stations in each of the northern and southern catchments discharging to the sea outfalls. There is, therefore, a high degree of dependency of operation between the stations. Running the stations efficiently in terms of power consumption, pumping efficiencies and avoiding corrosive conditions in the pipes and build up of silt, requires well co-ordinated and integrated operating systems.

147. In the southern system, because of the flatness of the topography, the majority of the larger sewers are laid to their minimum gradients and have been designed to achieve a velocity of

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less than the accepted “self-cleansing” velocity. The velocity is in practice adequate to keep solids moving but if the flow ceases, solids settle and the velocity is often insufficient to “pick” them up again. Not only does such deposition reduce the carrying capacity of the sewers but it also results in the production of hydrogen sulphide and hence is a major contributory factor to the acid attack that is destroying some pipes. In addition to the problems of silt deposition, the flatness of the topography also means that in places the sewers are laid very deep.

4.3 Current Projects

148. There are several projects, in addition to the Greater Colombo Sewerage Project and the Greater Colombo Wastewater Management Project, that have been completed, are currently on-going or are proposed.

(i) The Polwatte and Slave Island pump stations were rehabilitated between 1999 and 2001 under the World Bank funded contracts IDA/ CEIP/ BL/ 1 & 2;

(ii) Danish International Development Assistance (DANIDA) is funding a US$25m project to refurbish Madampitiya and Peterson Lane (S8) pumping stations; to reline the main N1 sewer and a limited number of other works to some parts of the gravity system. The project will affect repairs to the main sewer and construct a new pumping station alongside the existing Madampitiya pumping station, but with a deeper wet well. Included in the project is preliminary treatment of the effluent discharged to the Mutwal sea outfall with screening of the sewage discharged using 5mm one dimensional screens;

(iii) An agreement has been reached between the Governments of Sri Lanka and Austria with respect to refurbishments to Wellawatte pump station and relining of the ‘W1’ sewer. The project includes for the installation of 5mm one-dimensional screens at Wellawatte pumping station;

(iv) A Swedish International Development Assistance (SIDA) funded proposed sewerage project for Moratuwa/Rathmalana will include a primary and secondary treatment system of 18.5Ml/d capacity that will produce a higher quality of effluent than the local disposal standards require. The proposal is to discharge the treated effluent in the near-shore zone using a 500m short sea outfall. The project includes also for a treatment works at Ekala/Ja’Ela which is outside the Colombo sewerage system area. The estimated cost of the two schemes is US$80m.

4.4 PPTA Proposals for the Main Sewer Area

149. The focus of the study has been upon the critical elements of the sewerage system in order to bring the network up to acceptable standards and to provide the required capacity within the system to enable development to take place in accordance with UDA forecast.

150. The preparation of a capital works programme for the main sewer area, as proposed within the PPTA, has followed three distinct phases:

(i) Identification of unsatisfactory levels of customer service and operational performance which the PPTA needs to address, including under-capacity to meet future demands for service;

(ii) Identification and evaluation of outline options for solutions;

(iii) Selection of the preferred solutions and prioritisation of the individual schemes against pre-determined criteria.

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151. Within the GCWMP, phase (i) had been completed within the GCSP and the recommendations of the GCSP have been reviewed, updated and summarised within Volume 2.

152. Phases (ii) and (iii) have been undertaken within the PPTA and these are summarised and discussed below.

153. Within the PPTA, options have been identified and evaluated at three levels:

(i) At the first, lowest level alternative materials and techniques are considered, for example: the use of ductile iron pipes or polyethylene pipes, laid by open trench or using no-dig technology;

(ii) At the second level, system configurations are considered. For the provision of screening and grit removal, various sewer network configurations and different location of the screening facilities have been identified and evaluated, mainly considering the practicalities of different layouts and locations for the required treatment;

(iii) Finally, the balance between high CAPEX/low OPEX and low CAPEX/high OPEX solutions have been considered. For example: whether to install equipment to cleanse the screenings using Board’s labour or to have an outside contractor take all responsibility for the handling and disposal of screenings as removed from the screens.

154. The essential elements of the PPTA relating to the rehabilitation of the existing system within the main sewer areas are summarised below:

(i) Refurbishment works to both the Mutwal and Wellawatte outfalls;

(ii) Installation of fine screens at Madampitiya, Wellawatte and Harbour for the screening of wastewater discharged through the outfalls;

(iii) Installation of plant to wash the screenings and grit collected so that it is suitable for disposal;

(iv) Construction of three new pumping stations at Bambalapitiya, Borella and Maligawatte to overcome functional problems with the existing designs (in particular, lowering wet well sump levels to facilitate free flow within the upstream gravity sewer network) and to permit greater flows;

(v) Mechanical, electrical and civil engineering refurbishments to Harbour, Kollonnawa, Meetotamulla, Dehiwela, Wellampitiya and Mt Lavinia pumping stations;

(vi) Relaying under-capacity gravity sewers with sewers of the required capacity;

(vii) Providing new pumping mains where future flow projections indicate that existing pipes will be under capacity, or require re-routing as a result of the Austrian funded work at Wellawatte;

155. The requirements for each of the components of the wastewater system are discussed below.

4.5 Sea Outfalls

156. Within the PPTA, some concerns have been raised about the usefulness of previous studies on the performance of the Wellawatte and Mutwal sea outfalls for decision-making. These are discussed at length in Volume 11.

157. As a consequence, within Volume 4, Terms of Reference has been provided for further modelling to investigate the performance of the sea outfalls and to review the design of the

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diffusers to ensure effective dilution and dispersion. The following comments assume that the re-modelling confirms the basic suitability of the existing sea outfalls for disposal of Colombo wastewater. If the studies show that the sea outfalls are unsuitable, the alternatives will need to be considered more fully. These alternatives could comprise full or partial wastewater treatment; the construction of longer sea outfalls or some other solution.

158. The work undertaken by the PPTA has not identified any reason to recommend wastewater treatment and disposal options, as an alternative to sea disposal, in the short to medium term.

159. The proposed works for the Wellawatte outfall comprise:

(i) Cleaning of grit from the outfall: (ii) Unblocking of 14 no. outlet ports. (iii) Providing access points into the manhole – these will be provided as a part of the cleaning works.

160. The proposed works at the Mutwal outfall comprise the installation of a new diffuser at the point where the existing outfall has been broken at approximate chainage 1,488m together with the cleaning of the outfall and the fitting of access covers.

161. The diffusers will be contractor designed in accordance with criteria recommended from the new sea outfall modelling.

4.6 Fine Screens

162. Recommended schemes are provided for the screening of all wastewater discharged through the sea outfalls to ensure that no floatable solid greater than 3mm will be present within the wastewater discharged. This will meet the Sri Lanka standard for wastewater discharged to a marine environment.

163. The NWSDB has signed, or is in the process of signing, contracts for the DANIDA funded Madampitiya project and for Austrian-funded work for the Wellawatte station, which both have provision for 5mm one-dimensional screens. As the CEA require that all wastewater discharged to the sea shall not contain floatable solids greater than 3mm, the flows discharged through the DANIDA and Austrian procured works will require further screening. Not all flow derived from the Wellawatte catchment will pass through the proposed, Austrian funded screens at Wellawatte.

164. Within the context of ensuring that all flow is screened to 3mm, the PPTA proposes solutions to these concerns that will not require any change to the DANIDA and Austrian projects as such changes will necessitate extensive and costly contract variations and could delay the completion of these projects.

165. The 3mm screens recommended within the PPTA will be two-dimensional, as 3mm one- dimensional will have the bars too close together for raking.

166. We are concerned about the use of 3mm two-dimensional screens for raw sewage with potentially high screenings loading and risk of frequent blockage. Passing some flow first through the 5mm screens and the provision of 25mm coarse screens at upstream pumping stations will help to reduce the problem.

167. The arrangement proposed for the Wellawatte outfall is described below and shown in Fig 4.1:

(i) As currently proposed within the Austrian project, part (308 litres/sec) of the gravity flow from the Wellawatte catchment (677 litres/sec) will pass through the new Austrian funded 5mm one-dimensional below ground screens;

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(ii) This flow will be pumped, using the Austrian funded new pumps, to the inlet chamber of a new 3mm screening facility immediately upstream of the Wellawatte Junction Box;

(iii) Flows from the Bambalapitiya, Dehiwela, Mt Lavinia and Peterson Lane pumping stations will go direct to the inlet chamber of the new 3mm screening facility at the Wellawatte Junction Box; the only screening of these flows will be from the 25mm screens proposed for each of the pumping stations.

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Bambalapitya Catchment Flows are 191 l/sec 2030, Peak Wellawatte Catchment (part)

Bambalapitya PS 150 l/sec 219 l/sec

341 l/sec

1475 l/sec Peterson Sea Outfall Junction 3mm 2D screens Lane PS and Grit box 2528 l/sec removal facility 220 l/sec Dehiwela Mt Lavinia PS Washing Water 308 l/sec 1256 l/sec

5mm Screenings Screenings Screens and washing facility Grit removal facility (Austria funded) Remainder of South Solids Catchment From other PS by skip Wellawatte Catchment Safe Disposal (part)

Figure 4.1 - Schematic Arrangement for Fine Screening of Wellawatte Discharge

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168. Including the requirement for 3mm two-dimensional screening for the wastewater discharged through the Mutwal sea outfall is complicated by the existence of the works constructed under the DANIDA project:

(i) Replacing the DANIDA 5mm screens with finer screens will reduce the capacity of the DANIDA Madampitiya screening facility, such that additional screening capacity will be required to be incorporated into the Mutwal system.

(ii) As the screens are to be installed within an already constructed chamber, it is not possible to install new fine screens at low level of adequate capacity for the full Madampitiya flow; nor is there space to extend the existing screening chamber, even if such a proposal was financially viable in comparison with other options;

(iii) The incoming North Gravity sewer flow enters Madampitiya pumping station at low level and any screening for this flow has to be at low level, as with the DANIDA proposal, or pumped to ground level;

(iv) The channels within the Madampitiya screening chamber, constructed under DANIDA, would be too narrow for 3mm two-dimensional screens to be fitted within the DANIDA channel. Thus, the continued use of the DANIDA screening chamber is only viable for 5mm two-dimensional screens;

(v) A number of options were evaluated in Volume 2 for 3 mm two-dimensional screens. The recommended solution is as in Table 4.2 and Figure 4.2.

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Mutwal Madampitiya Site Site

Flows are 2030, Peak Vystwyke PS To be read with Fig 6.2

191 l/sec

3mm 2D Continuous 2083 l/sec 5mm screens & Sea Outfall Junction Madampitiya N. Gravity Sewer backwash pressure Grit removal facility Box PS 2528 l/sec screen (DANIDA) 1146 l/sec

445 l/sec Washing 746 l/sec Harbour PS Water Screenings with 3mm washing facility screen (by skip)

Solids Malagawatte PS

Safe From other Disposal PS by skip

Figure 4.2 - Schematic Arrangement for Fine Screening of Mutwall Discharge

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Table 4.2 - Summary of Proposal for Fine Screening of Mutwal Flows

Flows All flows screened to 3mm two-dimensional

North Gravity Flow screened within DANIDA 5mm one-dimension screens, with grit removal, and Sewer pumped, with pumps procured under DANIDA, through a continuous backwash 3mm (1146litres/sec) two-dimensional screen, procured within GCWMP, to the Mutwal junction box.

Malagawatte Flow pumped to Madampitiya PS where flow mixes with North Gravity Sewer and flow (746 Vystwyke flows and combined flow passes through low-level 5mm one-dimensional litres/sec) escalator screen and grit removal facility, procured under DANIDA. Combined flows pumped from Madampitiya PS to Mutwal Junction Box through 3mm screening facility procured under GCWMP.

Vystwyke flow Flow pumped through new sewer to Madampitiya PS where flow mixes with North (191 litres/sec) Gravity Sewer and Vystwyke flows and combined flow passes through low-level 5mm one-dimensional escalator screen and grit removal facility, procured under DANIDA. Combined flows pumped from Madampitiya PS to Mutwal Junction Box through 3mm screening facility procured under GCWMP.

Harbour flow Harbour catchment area flow and those from new Fort Siphon PS and CS3 PS pass though new 3mm two-dimensional screening facility and grit removal facility (445 litres/sec) procured under GCWMP and installed at Harbour pumping station. Flow pump by Harbour Station pumps to Mutwal Junction Box through existing sewer with new, replacement pumps procured under GCWMP.

4.7 Screenings Conditioning

169. As a result of the re-habilitation of grit removal and screens at the pumping stations and as a result of introducing screens at the head works to the sea outfalls, a considerable amount of both grit and screenings will be produced which will require collection from the various locations, washing and disposal.

170. Screenings and grit washing could be provided at Wellawatte, Madampitiya or both. At Wellawatta, the grit conditioning facility is an integral part of the detritor and classifier that is recommended for installation within GCWMP. At Madampitiya, where DANIDA are proposing a below-ground vortex type grit removal system, the grit will be washed and de-watered by a screw classifier which is included in the works to be provided under DANIDA.

171. It is an unnecessary hazard for un-washed screenings to be transported for cleaning and dewatering and the recommendation is for screen washing facilities to be provided at both Madampitiya and Wellawatte. Coarse screens produce smaller quantities of screenings and it is sufficient for these to be hosed down in the screenings trough prior to disposal.

172. Screenings washing plants normally utilise final effluent but in this case would use screened and filtered sewage effluent to wash the faecal matter from the screenings. The washed screenings are then dewatered, usually with a screw compactor and the screenings are discharged into a skip for disposal.

173. The washwater can be treated or returned to the sewer for discharge through the outfall. The recommendation would be to return the washwater to the sewer as no advantage is to be gained from the cost of the investment in the washwater treatment plant or from the additional operating costs that would be incurred. Any reduction in pollution achieved by treatment of the washwater would be marginal in comparison with the volume of sewage going to the outfall.

174. There is an option for the Board to enter into a contract for disposal of the grit and screenings, with or without cleaning, to an approved contractor facility31. At the time of the preparation of the Final Report, negotiations were still continuing.

31 The NWSDB has been in correspondence with Burns Environmental who operate a suitable facility and have indicated their willingness to take the screenings and grit.

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175. Within the PPTA, we have provided a cost for the NWSDB to install the necessary equipment for on-site conditioning of the screenings and grit dispose. This cost can be evaluated against the cost of contractor disposal when those costs become available, probably during the works design stage.

4.8 Pumping Stations

176. The PPTA proposals include for three new stations at existing sites (Maligawatte, Borella and Bambalapitiya) plus the Fort / Pettah siphon relief pumping station. In line with 1999 recommendations and as employed in the new (DANIDA) Madampitiya and Peterson Lane pumping stations, the above stations will utilise dry well type submersible pumps.

177. The PPTA recommendation is for a further five stations to be refurbished under GCWMP – Kollonnawa, Meetotamulla, Dehiwela, Harbour, Wellampitiya and Mt Lavinia.

178. Flow projections for the stations have been calculated in line with the latest land use plans .

4.9 Sewers

179. A relatively small number of exiting gravity sewers are indicated as under capacity and their capacity needs to be increased to cater for the projected demand. However, from the analyses it is evident that in some cases the level of under capacity is relatively small without consequence to the efficiency of the system and in such cases we do not recommend their inclusion in the current proposals.

180. Our recommendations32 comprise a new alignment for the force main from Bambalapitiya and 300 metres of pumping main to connect the new Fort / Harbour pump station to the existing CS3 to Harbour P.S. main.

181. There have been two recent failures of important sewers. There is a need to monitor carefully the continued performance and any failures of these sewers and those laid at a similar time in order to establish any pattern or common cause of failure, should further failures occur. This can be achieved within the Asset Management approach recommended within Volume 5.

182. Within Volume 2 we have made reference to the need to separate the sewage and surface water drains and for the need to clean the sewers of accumulated silt and other debris.

32 Justified within Volume 2 of the Final Report

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5. Strategy for Under-Served Areas

5.1 Existing Sewerage

183. All twelve areas within the boundaries of the Colombo sewer system that currently are not connected to the system, are almost exclusively catered for by septic tank and soakaways. Though some small bore sewers exist in parts of one or two areas; they are not connected to the main system. Furthermore, the informal shanties in two areas have no sewage disposal system, whatsoever.

184. With the exception of one area, all areas are fairly low lying and suffer from moderate to high water tables, thus making the septic tanks less effective, particularly during high rainfall seasons.

185. The less densely populated areas in the south of Colombo have a housing stock which comprises mainly single storey dwellings with sufficient available land for a suitably sized septic tank which could operate moderately well for most times of the year.

186. The densely populated central areas do not appear to have sufficient space for an effective septic tank and all effluent from these areas passes into the inland waterway system either through the ground or direct via streams and gullies.

187. With the exception of major parts of one area, which is undulating and mainly relatively high ground with only moderate water table levels, all the other areas will to a greater or lesser degree contribute to the pollution of their immediate local vicinity and the project area as a whole. All should therefore be connected to the system.

188. In considering the desirability of connecting a currently under-served area, a number of factors need to be assessed as outlined below: (i) The general environmental conditions prevailing within each of the areas and the consequential improvement upon the quality of life. (ii) The affect of non connection to the environment outside the extension area. (iii) The ease of connection and the interrelationship to the rehabilitation works. (iv) The projected future land use for the areas. (v) The ability and willingness of the residents to pay the connection fees and tariff. (vi) (In clarification of point (v), the results of a Willingness to Pay study have suggested that there would be a general willingness and ability to pay. However, there is a question with respect to whether those living within the poorer Northern districts would commit themselves to not just a connection fee33, but also an ongoing monthly commitment to pay the sewerage tariff) 189. In this regard, from an environmental perspective, the greatest need spreads generally from the North (being the most needy) to the South (being the least needy). However, within that generalisation, some areas present a lower risk to the general environment as they do not feed into the inland waterway system and consequently whilst conditions within these areas are in need of improvement, these areas do not contribute to pollution of any other downstream residential areas. Overspill from the septic tanks in these areas pass through existing swamps and into the mouth of the Kelani Ganga. There can be expected to be an improvement in the effluent quality as it drains through the swamp vegetation. Furthermore, in two areas, there are potentially more significant environmental problems due to the proximity of the CMC dumping areas and in parts, the existence of squatter type shanty areas within these areas.

33 The issue of people’s willingness to pay for a connection is dealt with more fully within Volume 1

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190. The central areas which are direct polluters to the inland waterway system are considered as the highest priority as resolution of the problems in these areas has a beneficial knock-on effect to others living downstream.

191. The Southern areas reduce in priority the further South they are located.

192. Having considered the above, the unsewered areas have been prioritized as in Table 5.1.

Table 5.1 - Prioritisation of Underserved Areas

Area Local D/S Comments Priority Need Effects North of H/M L Though this Area is proposed M/H to be re-developed for port area activities, it is now a settled community and has seen extensive growth over the past 10 years. The local need is high. H L Ditto with some housing M/H Mahawetta classified as “shanty” H L Proximity to CMC Solid Waste M area with some housing classified as “shanty” Northern Kolonnawa M L Moderate need only M

Northern St Sebastian Canal H H Pollutes San Sebastian Canal H

Southern St Sebastian Canal, west H H Pollutes San Sebastian Canal H side M M/H Limited affect on inland M/L/H waterways but with Partial Maligawatte pollution to San Sabastian Canal Southern St Sebastian Canal, east H H Pollutes San Sebastian Canal H side / M L Mixed Medium / High density M/L Borella North housing M L Flats developing in this area L/M

Kirula/Narahenpita L M Mostly new development L/M L L Septic tanks should function L Kirrilapone well in general Legend: H=High, M=Moderate, L=Low, N/C = Not Considered

193. Based upon the above, the areas proposed to be taken up under this project and the population expected to benefit are as in Table 5.2.

Table 5.2 - Areas to be Included within Project

Area Percentage Benefiting 2006 Estimate 1 North Mattakuliya 100% 36,732 2 Mahawetta 100% 20,145 3 Bloemendhal 24% 4,008 4 Northern Kolonnawa 84% 9,178

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Area Percentage Benefiting 2006 Estimate 5 Northern St Sebastian Canal 76% 15,920 6 Southern St Sebastian Canal, west side 100% 11,306 7 Maligawatte 59% 7,802 8 Southern St Sebastian Canal, east side / 100% 18,694 Dematagoda 11 Kirula – Narahenpitiya 80% 17,247 Total Population 141,032

Note: The benefiting population is computed from the following formula:

Population Benefiting = (Area Benefiting / Total Residential Area)* Total area population

Note: Sewerage extensions have not been made into areas identified as Industrial.

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6. Strategy for Sewage Disposal

6.1 Current Position

194. Colombo’s sewerage system has been constructed to collect flows at two locations; Mutwal and Wellawatte, where it is discharged to the sea through two long outfalls, untreated.

195. The basic concepts for the network and the disposal to sea were derived over eighty years ago. There is evidence that the original plan envisaged treatment to be provided prior to discharge to the sea. Discharge would initially have been through short outfalls. However no treatment has been provided for many years and the remnants of the treatment works at the Mutwal and Wellawatte sites are totally abandoned and partially destroyed. It would not be practicable to re-use them.

196. The Colombo existing system has more recently been developed in line with Master Plans prepared in the 1980s and revised in 1993, which resulted in a change of strategy. The Master Plan envisioned the continued discharge of sewage to the ocean through two long sea outfalls in lieu of treatment, and this is what was constructed. There was no Master Plan proposal to divert sewage to a sewage treatment plant for treatment prior to discharge. Although the outfalls are now in need of rehabilitation, they appear to have performed well in their task of diluting and dispersing the sewage in order to keep it free of the coast. However the concept of discharging untreated sewage to the ocean is no longer generally considered acceptable and it is necessary to plan to upgrade the present arrangement

6.2 International Context and Obligations

197. There have been a number of international initiatives towards protection of the marine environment from land based sources of pollution, of which wastewater is one such pollutant.

(i) The central element is the Global Programme of Action for the Protection of the Marine Environment from Land-based Activities (GPA) which was adopted in 1995 by an Intergovernmental Conference meeting in Washington, DC. The GPA aims to prevent “the degradation of the marine environment from land-based activities by facilitating the realisation of the duty of States to preserve and protect the marine environment”. The actions, at national level, require States to develop or review national programmes of action. Sri Lanka was one of the 108 countries which adopted the Declaration.

(ii) Representatives of ninety-eight Governments meeting in Montreal in 2001 for the first Intergovernmental Review, adopted the Montreal Declaration on the Protection of the Marine Environment from Land-Based Activities, which recognises that the implementation of the GPA is primarily the task of national Governments. The Declaration also calls upon UN Agencies and international financial institutions to incorporate, where appropriate, the objectives of the GPA into their own programs. Sri Lanka was not represented at the Montreal meeting.

(iii) A further Intergovernmental Review was held in Beijing in 2006, at which Sri Lanka was represented. This produced a further declaration relating to national, regional, and international actions to implement the Global Programme of Action.

(iv) Within the framework of the UNEP Regional Seas Programme, a regional action plan has been formulated for the South Asian Seas Region, an area that includes for the international waters adjacent to Bangladesh, India, Maldives, Pakistan and Sri Lanka. Untreated sewage and industrial effluent is considered to be a contributory pollutant.

198. There is clear global attention towards the problems posed by pollutants, including sewage, in the marine environment and a desire to prevent environmental damage from the pollutants.

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Thus although Sri Lanka may not have given any formal commitment to treat sewage prior to discharge to sea, it has committed to the GPA and thus to reducing pollution of the marine environment.

199. The ADB and other international financial institutions are required to take note of the Montreal Declaration.

200. The major justification for continued discharge of untreated sewage to sea is economic: it is considerably cheaper and in practice in the short to mid-term Sri Lanka cannot afford to install and operate treatment. Additionally, time is required to plan for the introduction of treatment and implement treatment. The GPA commits Sri Lanka to planning to reduce marine pollution but it does not set a time scale within which this must be achieved. In the context of the Colombo system, it is important that a Master Plan or strategy is prepared setting out how the GPA goal of reducing pollution of the marine environment will be achieved.

201. Notwithstanding the international commitments made by the government, probably the most effective driver for a treatment works will be the general public who, at some time in the future, collectively will decide that continued discharge of untreated sewage to the coastal waters is no longer acceptable and that they would be prepared to accept the costs of treatment, as a part of their wastewater charges. The international funding agencies with their commitment to the GPA will be influential in the decision making process.

202. The NWSDB has no option but to continue with the sea outfalls for the foreseeable future. The NWSDB and the CEA need to carefully monitor the water quality in the vicinity of the outfalls to assess the effectiveness of the diffusers and for compliance with the agreed environmental standards

6.3 Options for Treatment at the Sea Outfalls

203. Given that there is no current Master Plan or long-term strategy for sewage treatment for Colombo, the introduction of fine screening would appear in theory to be the best short-term option for treatment. Screening offers the opportunity of removing some of the pollution from the discharges, and will do so. Fine screening, as proposed, will remove essentially all the non-biological material from the discharges, effecting a significant aesthetic improvement to the receiving waters. Fine screening will also remove some of the biological load, if the screenings are not washed before being collected for disposal. Unwashed screenings are very objectionable and it is almost universal to wash screenings, normally returning the dirty washwater to the sewer.

204. As Sri Lanka is committed to reducing pollution of the marine environment, and extending the sewerage network prior to constructing treatment will run counter to this, it is necessary to consider approaches to ensure that GCWMP does not increase the biological pollution load discharged. There appear to be four options: treat at source; treat the screenings; full treatment and install fine screens.

205. If there are any high strength or high volume industrial discharges which discharge significant pollution loads, then treatment could be considered at industrial source to reduce the load discharged. For high strength wastes, treatment at source is normally the most economic option. Although technically and economically efficient there could be difficulties with such an approach. It may be considered inequitable to force particular industrial sites to install treatment if not required for other sites with smaller discharges.

206. Rather than return the washwater from the screenings to the sewer, it would be possible to install two small package treatment plants to treat this. The space requirements for two small plants would be small, and if an activated sludge process were used, there should be little issue with odour. It is not possible to size such plants until the screenings plants have been installed and the quantity and strength of washwater confirmed. We estimate that around 5 to 10% of the biological load would be removed by fine screening.

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207. Install treatment for the Mutwal discharge on the land available at Madampitiya. However as noted earlier, in the absence of a Master Plan this is not considered realistic, at this stage.

208. Thus the only practicable short term approach to meeting the goal of ensuring no increase in pollution load discharged would appear to be the installation of fine screening with or without the treatment of screening washwater on site. Treatment would remove pollution from plastics and other non-biodegradable material and lower pollution from BOD and suspended solids. However, this will incur an extra CAPEX and OPEX cost and, although desirable, is unlikely to be acceptable at this stage in the development of the wastewater strategy. The option can be considered within the overall conceptual study for wastewater disposal within Colombo.

209. The current facilities do not include any screening of, or grit removal from, the sewage entering the outfalls. The lack of screening means that plastic and other relatively large solid non-biodegradable material is discharged to the sea, leading to aesthetic problems. The lack of grit removal has led to deposition of grit in the outfall pipes, partially blocking them and reducing their hydraulic capacity. Thus a logical first stage of treatment would be to provide grit removal and screening.

210. The Sri Lanka 1990 water quality standard requires that there be no floatable solids greater than 3mm within the wastewater discharged.

211. Two dimensional screens are used in order to minimise the chances of long thin items passing through. A one dimensional screen, using a slot, passes more material than a two dimensional screen with the same width of opening. In the UK, standard two-dimensional fine screens have an opening of 5mm with 3mm screens are rarely used for untreated municipal wastewater.

212. A 5mm screen will in practice remove a high proportion of solid matter of less than 5mm. This is because as the screen operates a blinding layer forms, and this rapidly reduces the effective size of the openings.

213. In our opinion, compared to 5mm screens, 3mm screens offer few benefits; will be more expensive and difficult to operate and maintain; and will have a greater risk of failure.

214. A 3 mm screen will blind very rapidly and wastewater should be pre-screened to protect it and remove larger material. If there is a high fibre content in the sewage being screened, the fibres can tend to bridge the openings, leading to very rapid blinding of fine screens.

215. The CEA in its letter of 3rd August 2007 refers to a maximum particle size of 5mm but there are some inconsistencies within the letter that prevent the letter being used as a definitive statement of approval for 5mm screens. The CEA letter also sets a standard for the maximum size of settleable solid that can be discharged, 750 microns. The letter actually specifies 750 mm, but this is clearly an error and should read 750 um. This requires the installation of grit removal.

216. Thus, the first step in providing treatment for Greater Colombo should be to install grit removal and fine screens at the two existing long sea outfalls. This will provide significant treatment in terms of removing gross solids, and will prevent further deposition of silt in the outfalls. This is the current DANIDA and Austrian proposals for Madampitiya (Mutwal outfall) and Wellawatte, respectively where 5mm screens and grit removal are to be installed, for a part (49%) of the flow discharged. The proposal within GCWMP would be to install 3mm screens for all flows discharged through the two outfalls, including those that have previously been screened to 5mm at Madampitiya and Wellawatte.

217. Such treatment is not normally designed to remove pollutant load from sewage, and in the design of sewage treatment works no allowance is made for any pollutant removal by screening or grit removal. This is partly because coarse screens remove little organic matter, and partly because screenings are normally washed to remove any organic matter, with the dirty washwater returned to the sewer. Unwashed screenings contain large quantities of

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faecal matter and are very objectionable to handle or transport. The finer the screen the more organic matter it will remove, with the degree of removal depending in the degree of maceration of the solids. In Colombo, where the most/all of the flow will have been pumped, and matter macerated, the removal will be less than in a gravity system. Data on the removal of BOD and SS by fine screens is lacking. We would estimate that of the order of 5% could be removed by a 5mm screen and 15 to 20% by a 3mm screen. However these figures are unsupported as any such load removed is normally returned in the washing process.

218. As discussed above it would be normal to wash the grit and screenings removed, producing a relatively clean material for disposal, with the organic load removed by cleaning returned to the flow. If it is required to reduce the pollution load discharged then it would be practicable to treat the washwater prior to returning it to the main flow. However the design of such a plant would best be done once the screening and grit removal has been constructed, in order that the load on any plant can be determined.

219. We have identified some concerns with the previous studies on the effectiveness of the sea outfalls and have recommended further studies. To indicate the performance of the outfalls, the sampling associated with the modelling needs to be conducted over a full year. For a full study of the outfalls and for more accurate presentation of data within the works construction tender documents, it is necessary that more detailed information is available both upon the flow rates through the outfalls and the quality of water discharged, including the amount of screenings and grit.

220. We would recommend during the 12 month period of the marine sampling that: samples of the wastewater discharged are taken and analysed; the flow rates are measured; the performance of the proposed screens at Madampitiya and Wellawatte is monitored and the volume of screenings and grit collected recorded.

6.4 Wastewater Treatment Options

221. There is a need to provide an appropriate degree of sewage treatment to all discharges from Colombo’s sewerage system. The discharge of untreated sewage to inland or coastal waters is unacceptable in the long term, and undesirable at all times. However it is also necessary to ensure that any sewage treatment provided is affordable and to be assured that it will be operated effectively.

222. It is expected that waste water treatment will supersede discharge to sea in the medium term, and the Urban Development Authority has been asked by the NWSDB to consider land requirements, and make sufficient arrangements for accommodating the works. At this stage, it is anticipated that the most suitable sites are at Madampitiya and Wellawatte Pumping Stations.

223. An absolute pre-requisite for revising the current strategy of discharging essentially untreated sewage to the ocean is a revised wastewater Master Plan. The scale of capital investment required to introduce sewage treatment and the financial and environmental impacts of introducing sewage treatment mean that a fully revised Master Plan is essential prior to committing any significant investment. Arguably this applies equally to the proposed introduction of screening and grit removal at the two outfalls: however these processes would be required at any future sewage treatment works and thus their use at the two outfalls can be justified in that the processes will be required in the future, even if they will be more expensive to construct and operate than if centralised at a future sewage treatment works. Additionally it is considered essential to remove plastics and other gross material from sewage discharged to the sea.

224. We recommend that the study be made with a view to start treatment of the wastewater by 2015 as this will give adequate time for the options to be fully appraised; data on flows and loadings to be collected for a realistic sizing of the works and a decision made as to the most

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appropriate treatment process; a tender dossier to be produced and for the works construction programme to be completed.

225. By 2015, wastewater charges will be established; the public will have accepted the need for a wastewater charge and be more receptive to the necessary increase for treatment.

226. The issues for a future Master Plan include:

(i) Whether the most economic solution is to provide treatment at a single wastewater treatment plant – which could be located at Madampitiya, inland from Colombo or within the land reclaimed as a part of the new Colombo docks proposal. Both the current outfalls would almost certainly be retained to discharge storm flows. Alternatives could include two works, one serving the northern catchment, either at Madampitiya or within the port area, and one to serve the southern catchment. The location and size of any treatment plant would need to take account of flows arising from areas outside of this project area.

(ii) The extent to which operability, financial and affordability issues mean that a staged introduction of sewage treatment is required. There would be absolutely no point in investing in the pumping stations, rising mains, and treatment processed required to produce a high quality effluent unless there is certainty that money will be available to operate and maintain the infrastructure. Ideally the system would be financed solely through sewage tariffs, without any need for government funding. The capital cost of a treatment plant to provide secondary treatment to 2 million population would be of the order of $300 million.

(iii) A key issue would be the strategy for the two existing long sea outfalls. These will most likely need replacing in the next 20 years, and replacement of these will need to be considered taking into account the treatment strategy adopted and requirements for discharge of storm flows.

227. There is a significant area of land available adjacent to the Madampitiya pumping station, approximately 16 ha of which (an area of 200m by 500m and an abutting area of 250m square) appears to be available as a treatment works site. On a site of this size it would be possible to construct a conventional secondary sewage treatment works to serve a population of at least 2.5 million, sufficient to treat projected 2030 flows from the area served by the two existing outfalls.

228. At first sight, this would appear to be the most economic site for locating a treatment plant to treat the flows from the two outfalls. If this were the case then flows from the Wellawatte outfall could be pumped to the site and a treatment works constructed. The most economic solution would be to initially provide primary treatment alone, and adding secondary treatment when affordable.

229. However there would be some issues/potential problems which would need to be considered before this could be recommended:

(i) The availability of the site would need to be confirmed. The site is in an area that is being developed and whilst the site is largely free of buildings, this does not mean that it will be available.

(ii) The site is surrounded by housing. Thus, it is not the best site for locating a sewage treatment works. If a conventional primary/secondary treatment plant were to be constructed there could well be odour problems associated with primary treatment, which produces a sludge which rapidly turns septic, producing objectionable odours. The other area of sewage treatment which generates odours is sludge treatment, and the locating of sludge treatment on such a site might well be unacceptable.

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(iii) The method and location of the treated effluent discharge point would need to be confirmed. The existing outfall would have insufficient capacity to discharge all flow. Thus to meet international standards for bathing waters on the beaches it would be necessary: to construct a new long outfall; disinfect the effluent to reduce coliform numbers; or to pump effluent to discharge at a more appropriate location, possibly within the port area.

(iv) The receiving water quality standards, the location and method of discharge, and the degree of treatment are all related and it is important that three be fixed prior to committing significant capital expenditure. The location, quality, and quantity of storm flows, as well as whether it would be permissible for there to be a deterioration in receiving water quality during and after storms will also be an important factor.

230. Thus whilst the obvious solution would be to locate a treatment plant at Madampitiya, it is not possible to recommend this. Nevertheless it would appear prudent to take account of the possibility in the design of the screening and grit removal facilities, which are to be provided.

231. The available area at Wellawatte is smaller and higher level “small footprint” processes will have to be considered, if a treatment works is required at Wellawatte.

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7. Strategy for the On-Site Areas

232. Inevitably, within the on-site areas the shallow potable water wells are polluted by microbial and chemical pollutants contained in domestic and other wastewaters from the on-site facilities where such facilities have not been constructed correctly or are badly maintained.

233. Wastewater disposal within the on-site areas around Colombo requires special attention especially due to the fact that at present there is no overall strategy for sanitation, wastewater collection and disposal within these areas. Whilst still rural in nature, several satellite towns are expanding such that large areas are currently and increasingly becoming heavily developed. The volume of wastewater produced from these areas is significant and is estimate to be in the region of 1.5million m3per day.

234. Domestic wastewater consists of “blackwater” discharged from toilets, and “greywater” which arises from kitchen sinks and washing facilities. Within the on-site areas, the disposal facilities are constructed mainly for blackwater with the greywater going to storm water drains or soakaways. In other cases, greywater is discharged onto land within the premises or illegally to canals and natural watercourses.

235. Within these areas continued use of septic tanks, even if correctly built and maintained, will not always be a viable solution. Issues identified with the provision of the on-site facilities are:

(i) Institutional failures: Although there remain apparent weakness, the Government of Sri Lanka has adequate laws to deal with both domestic and industrial water pollution. However, the institutions with powers to administer the relevant regulations have failed to implement them effectively for variety of reasons. As a result, discharge of untreated or insufficiently treated sewage and industrial wastewater are released to storm water drains and natural water-bodies. Also, in the absence of sound monitoring program there is no guarantee that the installed systems are performing satisfactorily.

(ii) Technological failures: Systems that are in operation often fail to perform satisfactory due to poor design and construction; inappropriate technology; facilities location and inadequate size;

(iii) Operation and maintenance failures: System failure may be linked to poor operation and maintenance. Septic tanks are frequently poorly maintained due to lack of commitment and resource allocation by those responsible for their maintenance, often but not always arising from ignorance of the maintenance requirements. Related to this is a lack of public awareness about the function of wastewater systems and the need for operation and maintenance, which is a major constraint that hampers proper wastewater management efforts;

(iv) Land-use and site conditions: In some areas, particularly in the small towns, the building density has reached such a high proportion that septic tanks with soakaways can no longer function effectively or, in other situations, cannot be accessed for emptying. Also, there are high groundwater areas including those areas that flood regularly where conventional septic tanks fail due to poor infiltration capacity. In these areas purely on- site systems are not effective solutions to wastewater management and some form of communal wastewater collection, treatment and disposal system is required

(v) Poverty and Affordability: Poverty can force communities to live in marginal lands without even basic facilities. Even simple pits may not function in these localities due to unsuitable ground conditions or land availability. The result is disposal of untreated wastewater to the environment and watercourses. Affordability, significantly affects the choice of wastewater management technology. The inability of people to meet the capital and operational costs often forces communities to adopt unsuitable disposal methods.

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236. There is a significant inter-relationship between these factors that need consideration in the development of sustainable wastewater management models. Three factors govern the choice of the most appropriate on-site wastewater disposal facility:

(i) Building/population density; (ii) Suitability of ground conditions for septic tank and infiltration systems; (iii) The volume of wastewater produced and, for industrial/hazardous wastewater, whether disposal by septic tank is adequate.

237. Although there are apparent problems, septic tanks with an adequate infiltration system can provide a suitable disposal arrangement for individual houses, small commercial and institutional establishments, where wastewater flows are not large; ground conditions are suitable and the area is not over densely developed.

238. Where septic tanks are suitable, the local authority will exercise full control and monitoring of the tanks to ensure their design adequacy, proper construction and maintenance. The Local Authorities will need to manage the provision of an emptying and maintenance system, again by private contractors at a reasonable and fair cost to the user.

239. However, the review of the current situation shows that these systems alone cannot address the wastewater issues within the whole of the on-site areas. As an alternative the following models for wastewater management are proposed:

(i) Simplified sewerage: This suits areas such as town centres where building density is high and plot sizes are too small for individual septic tanks and infiltration systems. This system is similar to conventional sewerage but potential capital savings can be achieved via the use of small-bore sewers and lower gradients which reduce the need for deeper sewers. Further savings can be achieved via the use of sewer cleaning access chambers as opposed to expensive manholes and potentially an unconventional layout for the sewerage network can reduce the total length of sewerage required.

(ii) Settled sewerage: This is considered to be appropriate for areas with high groundwater levels and flat ground slopes where it is problematic to install sewers at conventional gradients for self-cleaning velocities. However, this system also requires a system for cleaning of the sludge from the interceptor tanks; sludge disposal and treatment facilities, as well as a plant for wastewater treatment.

240. Large industries and establishments as well as hazardous wastewaters are not considered as these systems require site specific solutions. Small industries such as service stations, catering/restaurant facilities can be connected to simplified or settled sewerage systems after preliminary treatment such as oil and grease removal, grit removal, etc.

241. Designing the on-site facilities for blackwater only means that they require emptying less frequently and the separation of blackwater and greywater is satisfactory provided that the greywater is properly disposed. Failing the installation of separate systems for greywater collection, treatment and disposal, the on-site facilities need to cater for both types of wastewater.

242. The Mission of the NWSDB includes the requirement: “To be a supporting agency for the provision of onsite sanitation”. We do not see the NWSDB taking a proactive role for the on- site areas but the Board could provide advice to the local authorities and the CEA with regard to the most appropriate means of disposing of wastewater within a locality. Similar advice could be provided to UDA for the design, construction and maintenance of the on-site systems. In this respect, the NWSDB could provide a country-wide service as the national “authority” for on-site sewage disposal.

243. We recommend that the NWSDB prepares a Wastewater Master Plan for the on-site area which considers the area to comprise three distinct categories:

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(i) There will be some areas where on-site septic tanks are appropriate and suitable solution;

(ii) Satellite towns, such as towns are Maharagama, and Kohilawatta, for which full wastewater treatment will be appropriate and, with their significant customer base and commercial premises, affordable;

(iii) The third category, thought to be 15 to 20% of the on-site area, will comprise those areas too small for conventional systems but within which septic tanks are unsuitable. Within these areas the choice will be between one of the two pilot project communal systems .

244. One benefit of looking at the on-site areas as an integral part of the whole area is that a treatment works for all Colombo wastewater – from the main sewered area and the on-site area - might be shown to be the most cost beneficial solution. Conveyance to the works from the on-site area could be piped or tankered and this enables a cost optimisation taking into consideration the land availability/prices, haulages times and costs, and economies of scale of treatment processes.

245. All forms of on-site communal sanitation require wastewater treatment and waste sludge disposal facilities (e.g. reed-beds).

246. For the on-site areas, the LA’s need to develop and introduce a system for regulation of desludging tank operators to ensure that they do use, and pay, for the disposal. These costs will be passed on to the customer, but as described in Section 7 any increases in tariffs / payments for operational costs need to be introduced slowly and incrementally to avoid a negative impact on willingness-to-pay.

247. The institutional arrangements for communal wastewater management; including any shared infrastructure and public sewers and wastewater/sludge treatment systems are more complex. In these situations, the relevant LA will be the asset owner but responsibility for operation and maintenance could, advantageously, be handed over under a management contract arrangement – either to a private company or an NGO with the relevant experience and expertise. In both cases, the local residents will play an important role in the form of a residents’ committee who monitor the performance of the company/organisation employed by the LA. In situations where the operator is not performing adequately, the residents committee will then report to the LA and the LA will consider if the operator is in breach of contract.

248. Our recommendation for the institutional arrangement for operation of decentralised wastewater treatment systems is similar to the above in so far as the LA will contract a private operator and a residents committee will report to the LA if they perceive that the treatment facilities is not operating properly and the effluent is polluting the environment. However, there also needs to be a more formalized and routine monitoring of effluent quality which will be administered by CEA.

7.1 Capital Investment within On-Site Sanitation

249. An issue can arise with the cost of the construction and maintenance of the communal on-site schemes especially within the poorer areas, which are often the areas most in need of alternative means of wastewater disposal. Bringing the necessary capital funding into the on- site areas for communal schemes is a potential problem. Our understanding is that if the NWSDB is the recipient of Government capital investment, the assets will become the property of the NWSDB and they cannot transfer them to the local authorities. It is, therefore, more appropriate for the Local Authorities to own and operate these small communal schemes. However, these local bodies do not generally have the necessary resources to absorb and implement the schemes and require technical support from NWSDB34.

34 See also Section 4.8

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250. The cost of a newly and correctly installed septic tank is on average more than the total household income receives over several months. Such relatively high capital costs are a disincentive to the provision of adequate wastewater disposal facilities in the on-site areas, with the consequential continuing negative effect on health, quality of life and the environment in these areas.

251. In principle, the cost of septic tanks or on-site facilities installed within the private properties should be paid by the property owners who use the facilities. However, due to the unaffordable cost for lower-income households, the Government may wish to assist both private household and public (i.e. non-commercial) establishments such as schools, health clinics etc install or upgrade their on-site facilities. This can be achieved through the provision of grants administered by the local authorities.

252. Rapidly developing areas on the outskirts of Colombo need a strategic approach; not a piecemeal one and, to this end, we recommend strongly that the NWSDB considers the on- site areas as a whole, preparing a Wastewater Master Plan for the Greater Colombo on-site area. We would suggest that any foreseen capital investment can be more easily justified if a scheme is seen to be within a Wastewater Master Plan context.

253. As development approval is sought within an area for which a communal system is provided, we recommend that approval to develop is subject to connections to the communal system and that a development charge be raised to offset the cost of the wastewater infrastructure necessary to service that development.

7.2 Charges for Industrial Effluent Discharges

254. Of particular importance in Colombo with its discharge of wastewater direct to the sea without treatment is the control and monitoring of industrial effluents into the sewer network. Any non- compliant industrial effluent will be discharged to the sea environment without control or treatment the effluent before discharge. Such a situation places a degree of responsibility upon the industrialists which they may neither want nor be aware.

255. Along the coast, outside the Colombo sewer area, hotels frequently have their own wastewater treatment facility and may re-cycle the treated effluent for gardens and other landscaping. For the larger industrial sites, treatment is provided on the industrial park.

256. In many countries, industry is charged for its industrial effluents both by the volume of the effluent and by load of the effluent i.e. its polluting strength. Industrial discharges are registered and subject to monitoring by the utility through the taking and analysis of effluent samples.

257. Currently, industrial discharges are recorded but effluent monitoring is ineffective. We understand that although 65% to 75% of industry in the Colombo sewer area has on-site treatment, less than 40% meet their licensed discharge standard due to poor monitoring and enforcement of the Standards. Lack of finance for the installation of treatment and for the O&M of their plants is quoted by industrialists as another reason for their non-compliant industrial discharges.

258. We recommend that the NWSDB exercises greater monitoring and control over the discharge of industrial effluents into its sewer network by the management of a trade effluent register (Volume 5) and by the regular taking and analysis of trade effluent samples.

259. It is probable that with a more stringent regulatory framework the NWSDB will need to be proactive with industrial discharges if only to safeguard its own position against prosecution for non-compliant discharge to the sea.

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260. We would recommend that the NWSDB considers charging industry according to the pollutant load of discharges as well as the volume i.e. the adoption of the internationally accepted “polluter pays” principle.

261. The two housing schemes, Crow Island and Maligawatta, are connected to the sewer system which the NWSDB operates and maintains. But the NWSDB could not get reimbursement of costs plus administration charge from the NHDA since no service agreement exists between the two agencies. We recommend that the Board should initiate the execution of a service agreement for the Crow Island and Maligawatta housing schemes in order to get reimbursement of costs plus administration charge from the NHDA

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8. Institutional

8.1 General

262. Both the NWSDB and the CMC are national/local government entities and, as is common for all such organizations, are restrained by governmental financial, procurement and management procedures.

263. Low investment has resulted in a lack of the plant, equipment and business systems necessary to perform collectively, as a modern, efficient service provider. If the NWSDB wastewater function in Colombo is to become financially and operationally sustainable within the income derived from the wastewater charges, it will be essential that procedures and business systems that are “suitable for purpose” within a modern utility service provider are in place.. The changes can only be introduced subject to:

(i) The agreement of the Board, with the full support of the Government;

(ii) CMC being prepared to accept the changes proposed, in particular to recognise the NWSDB as the “asset owner”;

(iii) A workforce that is willing to accept change;

(iv) Customers “willing” and, in the longer term, able to pay the true cost of their wastewater service.

264. To ensure the maximum benefit is derived from any capital investment, in addition to the institutional changes, capacity building is required within both the NWSDB and the operator organizations.

265. We recommend that on-going support be provided to both the NWSDB and the CMC during the first years in order to:

(i) Facilitate the introduction of the changes;

(ii) Assist in implementing change management policies within the organizations;

(iii) Provide training for capacity building;

(iv) Monitor progress with the introduction of the performance related operation of the wastewater assets;

(v) Assist with the various business and technical tasks recommended within the Final Report.

266. To conform to Government policy and to meet investor conditions, the operations of the wastewater assets require to be separated from ownership and income to ensure effective setting and achievement of both customer levels of service and operating performance standards. The institutional proposals, set out in Volume 6, show how this separation would be achieved.

267. The lack of an undisputed asset owner; no wastewater tariff to adequately meet the costs of the O&M together with the lack of adequate performance driven framework for the operation and maintenance of the assets, jeopardise the sustainability of capital investments within the system. We strongly recommend that these institutional improvements are in place prior to any further investment in order to ensure the sustainability and the achievement of the asset life of new assets procured within the proposed funding.

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8.2 National Water Supply and Drainage Board

268. The NWSDB has been established by the Sri Lanka Government with the specific responsibility for water supply and sewage collection, conveyance and disposal within Sri Lanka and is tasked with the implementation of the Government’s goals and policies within the sector. For the sewage function, the NWSDB, within the areas that it is designated as the “Authority” is required to: manage, develop, design, finance, own, operate and maintain:-

(i) Sewage collection systems; (ii) Sewage treatment plants; (iii) Where there is no treatment, alternative acceptable sewage disposal systems.

269. The Law, together with the application of “good practice” by the NWSDB as a conscientious and professional utility aware of its widest responsibilities to customers, employees and the public at large, obliges the NWSDB to:

(i) Collect and dispose of sewage with due care and diligence;

(ii) Take all steps necessary to maintain adequate facilities for the collection and disposal of sewage so as not to cause flooding or unregulated discharges of untreated sewage to a natural watercourse;

(iii) Operate and maintain the sewage collection and disposal infrastructure in such a way as to safeguard the health and safety of its employees, those of its contractors and the general public;

(iv) Plan for increased development to extend its service area and for increased customer return to sewer flows in such a way and at such a rate as can be reasonably expected of the NWSDB, with due regard to the capital investment required;

(v) Establish control, metering and information systems sufficient to forecast, plan and implement programmes for the operation, repair and maintenance of the infrastructure;

(vi) Provide a Level of Customer Service commensurate with the level of charges raised consistently and in an efficient and diligent manner, commensurate with the level of charges raised.

270. The NWSDB has encompassed these obligations within:

A Vision Statement:

“To enhance the quality of life through improved health and accelerated economic growth by being the leading national organization which provides safe and adequate drinking water and provision for adequate sanitation.”

And, as a Mission:

“To serve as the premier National organization for the provision of safe and adequate drinking water supply and sewerage facilities.

To be the premier agency for the provision of water supply and sewerage facilities for industrial establishments in order to achieve economic development.

To be a supporting agency for the provision of onsite sanitation”.

271. Embodied within the Principles and Values of the NWSDB are:

(i) Commitment to total customer needs;

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(ii) Motivation of staff towards creativity to achieve organizational objectives; (iii) Maintain ethics and professionalism in all activities; (iv) Facilitate for prevention of environmental degradation; (v) Positive contribution to national economic growth respecting Government policy initiatives; (vi) Work as a team with honesty, integrity and transparency.

8.3 Operators

272. The operators of the Colombo Sewer System are the Colombo Municipal Council Drainage department within the Colombo municipal area of responsibility, and an operational unit of the NWSDB within the Dehiwala/Mt. Lavinia Municipal Council (DMMC) area. The foul wastewater operation is managed in conjunction with the surface water drainage activities, with the split, in the order of: 75% foul and 25% surface water related.

273. There is no formal arrangement between the CMC and the NWSDB for the operation of the wastewater system. The NWSDB does not involve itself in the operation and maintenance of the wastewater assets.

274. There is no wastewater charge raised35 and without income, the NWSDB has been unable/unwilling to cover the costs incurred by the CMC for the O&M of the assets. The costs have been met entirely from the municipal taxes. All the costs incurred by the NWSDB in providing a sewerage service in the DMMC area, are met from the potable water charge.

275. By modern, international utility standards, the CMC operational function is over-manned. We understand that this is as a result of Government and Municipal employment policy for full employment. Within the PPTA, our role is to advise on the appropriate cost of the operation of the assets within Colombo and we consider that this “appropriate cost” should form the basis of the payment to the CMC for the operation of the assets on behalf of the NWSDB. The CMC, as a matter of Municipal policy, may decide to use the operation of the wastewater assets as a means to improve unemployment levels and so incur a “loss” on their operation. If so, the loss is to be “paid” by a local government subsidy and not through the sewage tariffs. The staffing levels that we recommend to be used for the payment to the CMC are based upon a staffing level of 5.3 employee/1000 connections ratio, compared to the current figure of 12.9.

8.4 SSTA Recommended Institutional Changes

276. The key conclusion of the SSTA was the need for improved O&M performance to ensure the continued availability and sustainability of the assets and, in so doing, first attract and then secure the long-term benefits of ADB and other donor funding.

277. In recognition of the experience and greatest knowledge of the Colombo wastewater system within the CMC, the SSTA proposal is for the CMC to remain as the operator but for the NWSDB to take on a proactive role in the management of the system and, in particular, monitor the performance of the CMC and its own unit in the DMMC area.

278. The signing of a Memorandum of Understanding between ADB and GoSL in September 2006 marked the parties agreement to an institutional model in which the key tenets are :-

(i) NWSDB to use revenue from the introduction of a wastewater charge to pay for the O&M of the wastewater assets;

35 A charge is to commence in 2007

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(ii) A new, wholly NWSDB-owned wastewater operational entity would enter into an O&M Contract with the NWSDB, as the asset owner, for the wastewater service provision in Gt Colombo;

(iii) The new NWSDB wastewater entity is to enter into a Performance Related Management Contracts with the CMC for the O&M of the wastewater system within the CMC area and with the NWSDB operational unit in the DMMC area, that would contain key performance indicators as the basis of the Contract linking payments to the operator to achievement of the indicators.

279. Subsequent work within the PPTA has moved forward from the original concept in that:

(i) The basis for the relationship between the NWSDB and the operators is proposed to be within a Performance Partnership Agreement that is more appropriate to the circumstances prevailing within Colombo;

(ii) It is not considered practical to establish a separate wastewater operational entity but an autonomous Wastewater Management Unit is proposed to be established within the NWSDB, with a clear identity and organizational structure. The prime function of the unit will be to interface with the operators for all matters concerning the performance of the Agreement.

8.5 Operator Performance

280. As previously discussed, there is no formal agreement between the NWSDB and the CMC for the operation of the wastewater assets. Consequently, there are no operational performance standard obligations upon the CMC other than those self-imposed or any formal monitoring and recording of indicators of performance.

281. Central to the strategy for improved performance will be the introduction of a Performance Partnership Agreement.

282. The indicators by which a utility is judged to be meeting its obligations may be derived from several sources: those which are set by a Government within law; those arising from or by an “Agreement” between the Government and the utility; and those are set by a Regulatory body. Indictors commonly cover:

(i) Levels of Customer Service Standards; (ii) Operational Performance Standards; (iii) Wastewater Discharge Quality Standards; (iv) For its own internal purposes, an efficient utility would Benchmark itself against similar utilities as indicators of business and commercial efficiency.

These are normally referred to as Key Performance Indicators (KPIs) and are to be included within the proposed Partnership Performance Agreement.

283. KPIs can be applied between operational districts; between the NWSDB’s two operators – the CMC and the operational arm of the NWSDB, and used for comparisons with other utilities or against pre-determined values. In addition to the above areas, KPIs can be provided for:

(i) Asset Performance Reporting; (ii) Benchmarking against other utilities.

284. Performance indicators will identify unsatisfactory operator performance but they can, and should, be as much to indicate the need for asset replacement or need for training. For

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example, pumping station failures can be due to poor maintenance – an operator issue, or due to power failures requiring stand-by generators – requiring NWSDB investment.

285. A Partnership Agreement, rather than a Performance Management Contract, continues to contain the required performance monitoring sought by investors, but better portrays the non- confrontational partnership that will need to exist between the NWSDB and the CMC and it recognises the unique experience and the tradition of customer service that the CMC brings to the partnership.

286. In Volume 6, we have included our proposals for the Partnership Agreement. The proposed Agreement sets out the obligations of the NWSDB, as asset owner, and of the operators and meets the Government requirements for separation of the role of “asset owner” from asset “operator”.

287. Our recommended method of payment will be fair to the operators and, by matching the operating budget to the expected income, will not place a financial burden upon the NWSDB that it will not be able to meet. The arrangement proposed provides for the operators to be fully reimbursed for providing the service. If the tariff should be found to be inadequate to meet customer levels of service and operating performance standards that the regulator or Government might set, the proposed arrangement will enable the NWSDB to clearly demonstrate this.

288. A weakness of the Agreement principle is that there will be no external competitive bidding process within which the “offers” would normally be technically and financially evaluated to ensure both their suitability and “value for money”. We recommend, as with a normal bid, that the submission of each operator is to include a Technical Proposal and a Financial Proposal. The Technical Proposal will set out how each operator intends to deliver the performance requirements of the Agreement, including their organization and staffing proposals. The Financial Proposal will include: a priced Bill of Quantities for the work items; a Management Fee with its determination and the suggested first year’s O&M budget.

289. The Technical Proposals should be evaluated by an Evaluation Committee against a pre- determined criteria and marking system36 based upon methodology and organizational requirements of the operator such as staffing, organization and work planning proposals. We have proposed a scoring matrix to be used and we would recommend that an operator should achieve a minimum score of 75% of the maximum. If this is not the case the Evaluation Committee should discuss with the operator those areas where improvement is needed to achieve the required score. The operator will be required to incorporate any such changes to his methodology into his Technical Proposal, which will become a part of the Agreement and become an obligation upon the operator.

290. When the required minimum 75% score is achieved, the operator’s Financial Proposal will be assessed for the reasonableness of the rates; the determination of the requested Management Fee and for the affordability of the first year O&M budget suggested by the operators. The Evaluation Committee should re-negotiate any Bill of Quantity rates; the Management Fee or the proposed annual budget, if it feels the rates submitted are inappropriate or that the budget exceeds the expected income of the NWSDB.

291. We recommend that the Evaluation Committee is chaired by the PMU Project Director and will comprise two representatives from the CMC; one from the DMMC Unit and a member of the NWSDB head office staff, as well as a representative of the NWSDB customers. The ADB might elect to send an Independent Observer.

292. As with the other institutional changes proposed we recognise neither the NWSDB nor the operators would be able to immediately move to a full application of the Agreement and we recommend a two year phased introduction of the Agreement.

36 A suggested scoring matrix is provided within Volume 6 of the Final Report

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293. We recommend that the operators be provided with training and support to ensure that they are able to work fully and competently within the Performance Partnership and are able to meet the required operating performance standards, as set out in Volume 4.

8.6 NWSDB Sewerage and Drainage Unit

294. The establishment is recommended of a new, autonomous Wastewater Management Unit within the NWSDB that will be responsible for monitoring performance of the operators and for other tasks related to the day-to-day operation of the NWSDB’s sewerage assets within Gt Colombo and throughout Sri Lanka.

295. A Sewerage and Drainage Unit that has been established this year (2007) by the NWSDB, with a similar brief to that proposed for the Wastewater Management Unit. An Additional General Manager for Sewerage and Drainage within the NWSDB has been appointed and staff are being assigned.

296. A significant difference between the PPTA proposals and the scope of the new Sewerage and Drainage Unit is that the later will have responsibility for the operation of the NWSDB assets within the DMMC area. We accept that the relationship between the recommended Wastewater Management Unit and the DMMC operational unit could never be a true client/contractor relationship. However, if not managed carefully the inclusion of the operational unit within the Sewerage and Drainage Unit could lead to a conflict of interest and prevent the introduction of a true performance related operational management within the DMMC unit. We recommend that there be clear lines of accountability and responsibility within the Sewerage and Drainage Division with regard to the monitoring of performance of the DMMC operational unit and with regard to payments to the operational unit, especially any performance related payments.

8.7 Roles of the NWSDB and the Operators

297. The criteria used in defining the respective roles of the NWSDB and the operators are that, in addition to Project Management of the Agreement and monitoring the performance of the Operators, the NWSDB would wish to keep for itself those tasks:

(i) For which it is essential that the NWSDB develops the skills base within its own organization if it is to develop as an entity within a more commercial environment e.g. asset management;

(ii) For which the NWSDB wishes to establish itself within the eyes of its customers as the “responsible” wastewater service provider e.g. initial customer contact;

(iv) Where there is an overlap with its potable water service function and customer service/efficiency gains are possible by combining the two e.g. income and billing.

298. The respective roles of the NWSDB and the operators are set out more explicitly in Volume 6. The following is a summary of the tasks that we recommend be undertaken by the NWSDB as asset owner, and by the operators:

299. The Board will:-

(i) Bill and collect revenue, manage debt and be the point of customer contact for billing and all other enquiries, including new connections; (ii) Enter into Performance Partnership Agreements with the CMC and with its own operating unit, for the DMMC area; (iii) Operate a Customer Call Centre which will be the first point of customer contact for all customer enquiries and new service connections;

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(iv) Retain “ownership” of the MIS and the computerised wastewater network models; (v) Project manage the expansion and rehabilitation of the wastewater asset infrastructure and all major projects; (vi) Manage the capital investment programme and liaise with Government and international funding institutions;

(vii) Act as the point of liaison for the wastewater function with the Regulatory authorities.

300. The Operators will:-

(i) Operate and maintain the wastewater assets under a Performance Partnership Agreement; (ii) Design and construct secondary and tertiary sewers; (iii) Investigate customer complaints; (iv) Survey for new connections.

8.8 Operator Organisation

301. The most obvious shortcoming within the current method of working is the lack of work planning for preventative maintenance. This deficiency means that:

(i) Plant and equipment may not be maintained according to manufacturer’s recommendations leading to premature failure with consequential adverse affect on service; (ii) Work may not be done in the most cost effective manner; (iii) Best use is not made of human and other resources available; (iv) The CMC are unable to maintain an adequate stores and spares replenishment system.

302. Work planning involves:

(i) Planning the work of the operator’s workforce:

(a) to meet frequencies of maintenance that may be set out in the Agreement, such as sewer flushing and manhole inspections;

(b) to ensure that Customer of levels of service are met;

(ii) Planning maintenance of the plant and equipment to comply with Manufacturer’s recommendations;

(iii) Ensuring efficient use of the workforce and the mobile plant and equipment;

(iv) Providing data on spares usage to ensure that the stores levels are set at an economic level, consistent with the maintaining the availability of spares against expected usage.

303. As a result of the introduction of the Performance Partnership Agreement and the need to ensure proper work planning for preventative maintenance, it is recommended that new operations departments are established within both CMC and DMMC to inter-face with the NWSDB. The role of these departments will be to:

(i) Plan work for the O&M of the sewerage system;

(ii) Receive from the NWSDSB requests to respond to customer contacts;

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(iii) Prepare request-for-payment accounts to NWSDB for the work carried out;

(iv) Monitor the performance of their own work-force against the requirements of the Performance Partnership Agreements;

(v) Input required data into the MIS of the NWSDB and into the operator’s own data base systems.

304. Other functions can be provided from within the core of the CMC, as appropriate.

305. In order to fulfil their obligations under the Performance Partnership Agreement, the operators will need to provide:

(i) An adequate and skilled workforce, supervisors, managers and technical support staff;

(ii) All necessary non-fixed operational plant and equipment, vehicles and incidental equipment;

(iii) Health and Safety equipment and staff protective clothing as well as traffic and footpath barriers and signs;

(iv) Necessary chemicals and fuel;

(v) Stores suitably stocked with adequate spare parts and replenished within a store policy that recognises frequency of use and delivery periods;

(vi) Suitable depot and office premises.

8.9 Customer Service

306. Within the tasks that we are recommending to be retained by the NWSDB are those activities which relate to customer service and customer contact. At present, all customer contact is with the CMC except for income and billing.

307. It is usual for Customer call centres to be the responsibility of the utility, rather than the operator, for the following reasons:

(i) Income and billing calls usually go to the utility and the establishment of call centres for service enquiries within the operator’s organization could be confusing to customers;

(ii) One telephone number can be provided for all customer contacts, whether they relate to water or wastewater, income collection or service;

(iii) To be effective, a 24 hour, 7 day a week service must be provided with staff and supervisors working within a rota system. Introducing such centres within the establishment of each of the two operators would be an unnecessary cost ;

(iv) As the appointed “service provider”, the utility would wish to establish itself and be recognised by its customers as the responsible organization;

(v) The utility could better log the progress of the customer contact and monitor operator performance in making the response;

(vi) Customer complaints could be against the performance of the operators of which the utility would wish to be aware;

(vii) Customer calls could be logged onto the utility MIS avoiding the need, and cost, for separate operator customer service recording systems.

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308. It is important that, as the owner of the assets and as the Government appointed entity with national responsibility for wastewater collection and disposal, the NWSDB should be seen by their customers as the responsible organization for wastewater service provision. With the introduction of a wastewater tariff this identification by the wastewater charge payers becomes more critical. As wastewater service charges are introduced, customers will become more demanding of the service that they receive and their expectations will increase.

309. From our discussions with the CMC, we know that the CMC staff is justly proud of its long tradition of service and that their major concern with any increased role for NWSDB within the wastewater service provision is their perception of the potential for deterioration of the current level of service provided. It will be necessary to address this perception with a comprehensive and professional NWSDB customer service facility.

310. The CMC officers fear a deterioration in service should the initial customer contact be with the NWSDB due to an unacceptable delay in response time. The final choice as to who receives customer calls will rest with the NWSDB but we would strongly recommend that initial contact is to the NWSDB. We would consider that the justifiable concerns of the CMC would be overcome with a public awareness campaign, as outlined in Volume 10; the introduction of a single telephone number for customers and an adequate MIS that will quickly transfer customer contact details to the appropriate office of the operator.

311. We recommend that the NWSDB expands it current “Customer Care” centre for potable water enquiries to become a 24 hour, 7 day a week call centre that is manned by trained staff provided with the information needed to respond to all, water and sewerage, customer enquiries. In recognition of the concerns of the CMC, it is appreciated that this will take time to achieve and, in the meantime, the service will continue to be provided by the CMC.

312. The NWSDB will need to prepare37 detailed Business Procedures for dealing with customer contacts, within a Customer Service Manual.

313. The service provided to customers requires to be set out within Customer Levels of Service Standards that will be incorporated into the Performance Partnership Agreement between the NWSDB and the CMC. The level of service to be provided will need to be balanced against the tariff charge. A high level of service might be desirable, but its delivery will also require a higher tariff.

8.10 Management Information System

314. The Management Information System (MIS) is the computerised system within which the data relating to the wastewater management business is held. The key functions for which data will be collected are:

(i) Financial management; (ii) Customer Service; (iii) Asset Management; (iv) Income and billing; (v) Trade Effluent Register (in effect, part of Income and Billing).

315. Within Volume 5 are set out the required inputs, outputs for each of the above functionalities.

316. NWSDB is in the process of installing a fully integrated computerised system, through an agreement entered into with CoOptions Technologies Ltd of India in August 2006, to integrate the existing stand-alone software currently in use in the NWSDB, and to develop software for other potable water functions. As the new NWSDB Sewerage and Drainage Department has been established as a department of the NWSDB and assuming that the software provided

37 A task for the recommended Institutional Development Consultancy

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for the potable water function is acceptable, it is logical that the water and wastewater functions use the same MIS, rather than the NWSDB purchase two separate systems. The potable water MIS should be supplemented with additional capacity and data fields for the wastewater function. The additional functions for wastewater need not necessarily be purchased from CoOptions Technologies.

317. The application programs should be configured to draw data from, and to feed data back into the MIS so that the NWSDB has only one data bank to ensure constancy, currency and completeness of the data bank.

318. We recommend that the NWSDB be the “owner” of the MIS but that the operators should have limited access for the purposes of direct data entry and for work planning.

319. Ideally, the computerised work planning and stores system should be combined within the NWSDB MIS application program. In this way, work planning and asset history data will be retained by the NWSDB for use as part of their asset rehabilitation/replacement planning.

320. In addition to the NWSDB MIS, the operators – the CMC and the DMMC Unit - will require their own computer systems for:

(i) Financial management of the Agreement activities and for raising a “Request for Payment” with the NWSDB; (ii) Work planning; (iii) Stores management.

8.11 Documentation

321. Within Volume 5 we set out the key Management Documentation that the NWSDB needs to put into place as a part of the recommended institutional changes. The Documentation considered necessary comprises:

(i) Hierarchy of Business Documentation; (ii) Wastewater Master Plan; (iii) Asset Management Plan38; (iv) Capital Investment Programme; (v) Human Resource Plan; (vi) Quality Assurance Scheme.

322. The Hierarchy of Business Documentation includes:

(i) Operations and Maintenance (O&M) Manual; (ii) Plant Operating and Maintenance Manuals; (iii) Customer Services Manual39; (iv) Energy and Environmental Manual; (v) Emergency Planning Manual; (vi) Project Management Manual;

38 We recommend that the NWSDB adopts an Asset Management approach, as set out in Volume 5, to proactively manage the creation and rehabilitation of the wastewater assets. 39 The ADB TA4049-SRI is in the process of developing a Customer Service Code which will outline the principles to be met by the NWSDB with regard to customer service. The recommended Manual will need to take into account the requirements of the Customer Service Code

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(i) Procurement Manual, incorporating a Stores Manual; (ii) Health and Safety Manual; (iii) Quality Assurance Manual.

together with Procedures for:-

(i) Customer enquiries; (ii) New connections; (iii) Illegal connections; (iv) Flooding of property; (v) Emergency incidents; (vi) Sewer blockages and collapses; (vii) Energy and environmental audits; (viii) Confined space entry; (ix) “Permit to work” safe working system; (x) Tender evaluation.

8.12 Institutional Arrangements for the On-Site Areas

323. Section 7 discusses technology options for the provision of on-site wastewater management systems. This section focuses on the current institutional arrangements that will guide the planning, design/implementation and subsequent operation of these facilities.

324. All building proposals, including the means of wastewater disposal, are subject to approval by the Local Authority who ensures that appropriate requirements of the CEA and UDA are met. This therefore includes household septic tanks and any facility for wastewater collection and treatment that is installed on private land.

325. The Department of Health, although not directly involved with the management of the systems, plays an important role by providing most of the Public Health Inspectors who serve in the local authorities. The Inspectors are responsible for implementation of sanitation regulations. The Medical Officer of Health of the area also has important role in administration of laws related to sanitation.

326. Any problems identified within the PPTA are less associated with the institutional on-site arrangements than with the capacity within the local authorities and CEA to fulfil their existing statutory obligations.

327. The LA’s have no policy or procedure for the regulation of de-sludging tank operators to ensure that they do use, and pay, for the disposal.

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9. Wastewater Service Charges

9.1 Introduction

328. A financial strategy for the Colombo wastewater service was prepared and published within the draft of Sewerage Tariff Policy Paper (GOS, 2004). This was followed by the NWSDB Sewerage Tariff Proposal (NWSDB, 2006). The background is described in detail within Volume 8. The main recommendations of these papers are that a wastewater tariff should be applied; that the tariff shall be “national”; and that the tariff will cover the O&M costs of the NWSDB.

329. Where NWSDB enters into contracts with operators to operate and maintain systems the tariff should cover the cost to NWSDB, after allowing for any subsidies paid to the operators by local or central government.

330. Our understanding is that the strategy with regard to a national tariff is to apply to piped sewerage systems owned or adopted by the NWSDB and would not apply within the on-site areas.

9.2 Tariff Determination

331. The financial sustainability of a utility, which relates to the income that it achieves, is always a key area of financial strategy. The simplistic interpretation of financial sustainability is that revenues balance with expenditures. In fact, financial sustainability can be defined in various ways depending on the level of cost recovery required. Full cost recovery is the most stringent criteria, meaning that the service users pay both capital charge, or depreciation, and recurrent costs of operation and maintenance. Obviously sewerage systems, with significant capital investment in main sewers, pumping stations, and wastewater treatment plants, necessitate a large capital charge, which would comprise a significant proportion of the tariff. If applied to Colombo the tariff required for full cost recovery would exceed the ability to pay of many households.

332. There needs to be a balance between the charge that people are able/willing to pay and the cost of the service provided – a cost that is related to the level of service provided. Too often people are not willing to pay for a wastewater service because they are able to dispose of their wastewater without apparent detriment to their well-being. What people often fail to realise is the link between sanitation, health and hygiene and the “hidden” cost of an apparently free method of disposal both directly to them for illness and to the wider community in terms of load onto the medical services and to the environment.

333. For the NWSDB, the requirement is only for the O&M cost to be recovered by tariff. Government policy is for a national tariff but because of difficulties of introducing a nationwide sewerage service charge, the proposed sewerage tariff was set in a rather simple way. The rising block tariff structure was progressively volumetric and based on the water consumption in Greater Colombo area only. Non-domestic tariff was set higher compared with domestic tariff.

334. The affordable tariff level of water supply and sewerage services together is generally regarded as “5% of lower household income”. The lower household income can be considered as 3rd quartile threshold of total income distribution. Using the data obtained at the willingness to survey conducted in this PPTA, the 5% of lower household income is estimated at Rs.550 per month40.

40 The affordability of the tariff is discussed within Volume 8 of the Final Report

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335. In fully developed systems where the assets already exist; either the cost of new infrastructure is charged to developers or the utility income is adequate to provide for investment in the new assets. There remains a need to build into the tariff a charge for the replacement of the assets. Where there is partial coverage, there is a requirement to both expand the sewer network into currently unsewered areas and to replace the existing assets as they reach the end of their life. Frequently in locations such as Colombo, the cost of new assets is above that which the people can pay and the GoSL has set a policy that sewerage capital costs should be paid by government grants, albeit with assistance from the international funding agencies. Thus for Colombo, arguably unfairly, all tax payers are contributing towards the cost of expanding the Colombo wastewater system.

336. The usable life of sewerage facilities will vary depending on the asset. Pumps will last usually 15 years while sewers can last more than 50 years with proper maintenance. It follows that the NWSDB, through the CMC, should make regular investments in their sewerage systems to maintain the various components in good working order and to maximize the usable lives. We recommend that as soon as possible, and permitted by the Regulator, such investment costs should be included in O&M cost.

337. The imposition of a national tariff is Government policy. We recommend that the NWSDB immediately starts an exercise to both verify its wastewater customer database and to ensure that all connected properties are charged. The requirement to ensure the accuracy of the customer database and to identify “unknown” connections should not delay the implementation of the tariff.

338. Basing the wastewater charge on the volume of water drawn is sensible and is widely adopted. Most water is supplied by the NWSDB and the water meter penetration rate is nearly 100 percent. Another merit of this method is that the billing and collection procedure of water supply which already exists and can simply be expanded to include for a wastewater charge. In extreme cases, the collection is also enforceable by cutting off the water supply if users do not pay the charges.

339. Where wastewater customers do not receive their water from the NWSDB or are not metered, the wastewater charge can either be agreed between the customer and the NWSDB based upon a nominal usage determined by the number of people and/or size of property. The rationale of using those parameters is that the volume of wastewater discharged is considered proportionate to those parameters. Where no registration system exists to verify those parameters, its practicability will be weakened. The current customer database at the NWSDB and the CMC does not contain those data and if the per-connection charge is to be applied in an equitable manner, the customer database within the MIS41 has to be organized to include such parameters. If water to a property is pumped from a well, the NWSDB could require that the private water supply be metered and a wastewater charge be based upon this meter reading.

340. If wastewater treatment is introduced, and where provided in the on-site areas, the tariff needs to recognise the additional treatment costs caused mainly by industrial or commercial wastewater. Industrial wastewater is more contaminated than typical residential wastewater and industrial dischargers should be paying extra for the treatment within a trade effluent charge42. Such a charge is fully consistent with the internationally accepted “polluter pays” principle. The charge will be based on the concentration of pollutants such as BOD, COD, and total suspended solids. Strength charge rates will be set based on expenses at the wastewater treatment plant for treating those pollutants in excess of normal residential wastewater.

341. The NWSDB should retain the cross-subsidy effect of the block volumetric tariff structure. However due to lack of reliable customer data, the cross-subsidy effect cannot be quantified with sufficient reliability. Such customer data should be established both for proper tariff

41 See Volume 5 of the Final Report 42 See Volume 5 of the Final Report

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setting and ensuring the accountability of cross-subsidy effect. Another argument in cross- subsidy is whether the sewerage service charge revenue achieved from Colombo would subsidise other sewerage operations in Sri Lanka. We cannot draw a conclusion for this argument without careful cost analysis including proper allocation of financial charges and overhead costs of the NWSDB related to Colombo and the remainder of Sri Lanka43. However, the “national” sewerage tariff proposed by the NWSDB takes into account only the Greater Colombo customer base and is not intended to be replicated in other areas. It is therefore obvious that another tariff setting will be needed when sewerage tariff will be introduced in other areas.

9.3 On-Site Service Charges

342. We recommend that schemes within the on-site areas be promoted and maintained by the Local Authorities albeit with private contractors, and that full cost recovery tariff be applied for the services.

343. Within the on-site areas, households are likely to pay for improved septic tank cleaning services and this should be paid on the basis of a payment for each cleaning operation - not as a wastewater tariff. Even for cleaning of small sewers, it is better to have system whereby people only pay for maintenance when it is actually required. The way the facilities are used affects their performance and if sewers are abused by receiving solid wastes, then they will block. This acts as an incentive not to dispose of solid wastes into the sewer and to report missing manhole covers when they break or go missing.

344. Similarly, if septic tanks are overloaded they will require emptying more frequently, costing the owner more. Linking the payment for on-site sanitation/wastewater systems to the level of service provided for maintaining/cleaning the facilities encourages a responsible use of those facilities.

345. The LAs - or a small-scale private operator - can receive the money directly for the service that they provide from the person receiving the service. This charging system is much simpler and the service provided is accountable. It is also preferential to introduce competition so that there is more than one service provider and therefore the householder can chose which service provider offers the best service and the most affordable price.

346. Where septic tank sludge is disposed of at a treatment works or to a sewer, a tariff could be applied for the off-site sludge treatment. But, households will generally not want to pay a treatment/disposal tariff in addition to the costs of paying for cleaning. In these situations, many households would invariably take the cheapest option and the sludge will end up being dumped / discharged in a local watercourse.

347. The alternative is to provide managed facilities at a suitable location within the Colombo sewer system where the wastewater and sludge can be safely disposed from the cleaning tankers, and charged. It is likely that the LA will need to subsidise the treatment costs via municipal taxes but this can be subsidised from the municipal taxes and/or from discharges licences to commerce and industry. In addition is the possibility to add an addition (hidden charge) on the costs associated with cleaning sewers and septic tanks but these can only be added in gradual increments over a period of time.

348. We consider that the operation and maintenance of the on-site facilities, as well as the emptying of septic tanks, is an ideal opportunity for private sector participation including, where appropriate, construction of the facilities within a BOOT arrangement.

43 However, see the financial assessment of the NWSDB’s contained within Volume 8

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9.4 New Service Connection Charges

349. Connection charges for new properties provide a means to directly subsidize the costs of the connection itself but perhaps more importantly demonstrate a commitment from the proprietor that subsequent bills will be paid.

350. There is currently a 25% administration charge for new connections and the CMC, selectively, makes an “infrastructure” charge of Rs 1.50 /sq.ft.on high-rise buildings.

351. Household connection costs are estimated to be a minimum of 220 USD (Rs. 25,000), which is a considerable sum of money for many households in the un-served areas and will act as a disincentive to connect. However, it is imperative that all households connect to the nearest sewer otherwise the huge investment in downstream infrastructure will be under-used.

352. A connection charge should be considered for all new housing developments, as well as for those existing households who require a connection, in order to help with the funding of the new infrastructure required to support the housing development. Connection charges for institutions, offices and small commercial buildings should be charged according to a different set of rates set by NWSDB and industrial charges should be considered separately on a case by case basis as in most, if not all, the industrial effluent will require pre-treatment prior to discharge into the municipal sewer.

353. As the cost of the connection is perceived to act as a disincentive and for many will exceeds the amount householders are willingness to pay, subsidies might be justified to the extent that wider social benefits of expanding the sewerage network were at least as high as the associated subsidy. There is a need for subsidies to reduce the connection charge to a level that is considered to be more affordable.

354. For those poor households who cannot afford to pay, there are two options. The first is that they can agree to pay in instalments and these will be added to their sewerage charge. Alternatively, or in addition, an additional subsidy may be made available to poorest households who might be able to receive additional financing at the discretion of NWSDB. However, NWSDB will only consider applications for additional subsidy if the application is submitted through the Local Authority who will receive a request from an appointed local community representative. This is to ensure that only bone fide poor request and receive the subsidy.

355. For those households who can afford, but are unwilling to pay, the mechanism to motivate them to pay will need to be based upon local social pressure. It will not be cost effective to connect households on an individual basis. Therefore, a street or lane of houses will all need to connect at the same time to reduce cost and minimise disruption during construction. Therefore, we suggest NWSDB should only agree to connect houses once a collective deposit has been paid and submitted with an application form in the appropriate format. This would include a list of houses and signed undertakings by the head of each household (or proprietor in the case that the property is rented) indicating that they understand the terms and conditions of the connection and confirming that they will not misuse the system and will pay the sewerage charges.

356. We recommend that once the wastewater tariff is collected, the NWSDB should discontinue the 25% administration charge for new connections to help make the cost of a new connection more affordable.

9.5 Procedure for Under-served Areas

357. With the provision of first-time sewerage to the under-served areas, there will be essentially three stages of implementation

(i) Construction of the secondary collector sewerage

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(ii) Installation of tertiary lane sewers (iii) Household connections

358. To promote willingness to pay and to ensure rapid progress, the network of collector sewers will be installed throughout the areas that have been designated as areas for sewerage. The network will be extended so that all households will be within a maximum of 300metres from the sewerage system. The main system will include manholes and connection chambers to which the sewers within the small passageways will then be connected. This will also act as means to motivate and mobilize the local residents, demonstrating NWSDB’s commitment to install sewerage in the neighbourhood.

359. The next stage, once an application from an area committee has been submitted with the connection deposit, will be to install the tertiary lane sewers which will have smaller diameters and, where possible, be laid to a shallower depth. At this stage, laterals, connection chambers and the house connections will also be installed.

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10. Project Implementation

10.1 Executing and Implementing Agencies

360. The Ministry of Water Supply and Drainage (MWSD) will be the Executing Agency for GCWMP and will be responsible for overall strategic guidance, technical, supervision, execution of the project, and will ensure compliance with the loan covenants.

361. The Implementing Agency will be the NWSDB.

362. All procurement under GCWMP will be in accordance with the Sri Lanka Procurement Guidelines as well as those of the ADB.

10.2 Project Management Unit

363. A Project Management Unit (PMU), led by a full-time Project Director appointed by the NWSDB, will manage the project. The Project Director should have no other duties inside or outside of the NWSDB.

364. The PMU will be located within the premises of the NWSDB and is to be provided with necessary business support systems for the performance of its duties.

365. The Project Director, supported by the Project Management Unit staff and consultants, will:

(i) Coordinate all activities under the Project; (ii) Be responsible for overall project implementation, monitoring, and supervision; (iii) Report directly report to the Chairman of the Board; (iv) Act as Team Leader to the PMU.

366. The Project Director is responsible for advising on the appointment of the:

(ii) Institutional Development Services Consultancy; (iii) Works Supervision Consultancy; (iv) Design and Build Contractors for the main rehabilitation works.

367. The Project Director will advise on the suitability for acceptance of the Performance Partnership Agreements submitted by the operators.

368. The Project Management Unit shall, under the leadership of the Project Director :

(i) Approve the detail design of the various works components; (ii) Pre-qualify contractors; (iii) Implement public relations and community awareness programmes; (iv) Prepare bid documents not prepared within the PPTA; (v) Evaluate tender bids; (vi) Prepare bid evaluation reports for approval; (vii) Monitor progress of the GCWMP works and other contracts; (viii) Procure equipment purchased within the loan component of the GCWMP; (ix) Coordinate with the ADB on matters related to disbursements; (x) Procure and arrange the training and capacity building programmes; (xi) Maintain project documents and submit timely reports to the TAC, ADB and to the NWSDB as may be required.

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369. The Project Director will be supported by a deputy Project Director. The PMU will be staffed with four Senior Managers, one for each of the functions of technical, financial, social and capacity building, supported by adequate professional and support staff. The number of staff required will vary at differing times during the period of the GCWMP.

370. A separate accounting and administrative unit, within an appropriate department of the NWSDB, will manage procurement and loan account administration.

371. A Works Supervision Consultancy will be appointed for project management; verifying of detail design; construction supervision; recommendation for procurement of goods and services; public relations and awareness for works related to the rehabilitation of the Colombo sewer system and for the provision of first-time sewerage within the under-served areas.

372. An Institutional Development Services Consultancy, comprised of both international and domestic firms, will assist the PMU in the management, monitoring and evaluation of GCWMP and in financial and environmental management aspects of the project; public relations and awareness; training together with capacity building and institutional development / strengthening.

373. The Institutional Development Services Consultancy shall include for:

(i) An international consultancy to guide the development of the NWSDB and to assist the PMU in the acceptance of reports and recommendations of the Works Construction Supervisor.

(ii) A domestic engineering consultancy for the pilot on-site studies;

(iii) A domestic Public Relations Consultant to facilitate public relation and awareness programmes on project related issues and in the preparation of the information, education and communication materials used in the public awareness campaigns for the on-site areas;

(iv) A domestic Monitoring & Evaluation consulting firm to identify and evaluate socio- economic and environmental impact of the project and ensure that the benefits of the project reach the target groups;

374. NGOs will assist in public awareness campaigns and monitoring and evaluation studies.

10.3 Disbursement Procedures

375. The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook. An imprest account will be established at the Bank of Sri Lanka to expedite implementation of the Project through the timely release of loan proceeds, all as more explicitly set out in the Financing Loan Agreement.

10.4 Reporting Requirement

376. The MWSD will provide the ADB with quarterly progress reports on the project implementation.

377. The PMU will be responsible for obtaining and consolidating relevant information for the MWSD quarterly progress report. The progress reports will describe physical progress, details of any modification required to the project implementation schedule, problems encountered, and an outline of the work for the next quarter.

378. The MWSD progress report will also provide summary financial accounts of the project that will include:

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(i) Expenditure during the quarter; (ii) Year-to-date expenditure, (iii) Expenditure to date.

379. The progress report will be an executive summary of the detailed reports; with format and content permitting ADB staff to readily capture key information for inputting into the project performance report.

10.5 Accounting

380. The PMU will establish and maintain separate accounts and records adequate to identify the incomes and expenditures related to the project. The PMU staff will be assisted by an adequate number of suitably qualified accounting staff including an accounts officer, for this purpose.

10.6 Auditing

381. Detailed consolidated annual project accounts, as maintained by the PMU, will be audited by independent auditors acceptable to ADB and will be submitted to the ADB within 3 months of the close of each fiscal year. The annual audit report will include the audit of the imprest account.

10.7 Project Reviews

382. Project performance will be reviewed in a three-tier system.

(i) The PMU will review and prepare monthly progress and performance reports on each component of GCWMP.

(ii) The MWSD, as Executing Agency, will conduct the second tier review during quarterly meetings and present within their quarterly progress report. The monthly project performance reviews prepared by the PMU and major policy issues will be reviewed and actions to be taken will be recorded.

(iii) The third tier review will be conducted by ADB every 6 months, within an ADB Review Mission visiting Sri Lanka to discuss major issues and forward their opinion for action at the government level.

383. The project review will be supplemented by formal comprehensive periodic reviews with the participation of senior National Government and State officials as well as ADB when detailed design is completed; major contracts have been awarded and started and at other critical times in the life of the project.

10.8 Design and Monitoring Framework

384. The Design and Monitoring Framework44 for GCWMP is as Table 10.1:

44 Based upon that prepared and previously provided by the ADB

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Table 10.1 - Design and Monitoring Framework

Design Summary Performance Targets / Indicators Date Sources / Reporting Assumptions and Risks Mechanisms

Impact By End of Project plus 3 years (2016) Assumptions

1. Water quality of inland waters within Colombo is Improved environment, public improved; 1. Central EnvironmentAuthority 1. Macroeconomic stability; health, and quality of life for (CEA) Reports the people of Greater 2. Improvement to quality of the marine waters along 2. Political stability and commitment to improved Colombo. the sea shore arising from improvement in the 2. CMC health bureau data on environmental compliance; quality of inland waters discharging along the shore the incidence of infectious line; diseases 3. Improved performance by the NWSDB as asset owner and by the CMC and DMMC unit as 3. Risk of exposure to pathogens diminishes as the 3. UNEP State of the operators; occurrence of E. coli bacteria in surface and ground Environment Report waters diminishes with the cessation of polluted 4. Concept of Preventative Work Planning is water discharged to watercourses and pollution of 4. District Secretariat reports introduced by the operators together with an ground water by inferior septic tanks. appropriate Stores and Purchasing Policy;

4. Incidence of diarrhoeal diseases drops below the 5. Other improvements in operation and 2003 level of 622.5 cases per 100,000 persons. maintenance of the sewerage infrastructure and management functions match infrastructure improvements.

Risks

1. Inland and sea shore water quality monitoring data does not provide sufficient information to detect trends;

2. No base-line data for water quality, levels of service and performance upon which improvement can be judged;

3. Pollution is caused by events outside the influence of the GCWMP, in particular lack of monitoring of and penalties for industrial effluents direct to watercourses and lack of building control;

4. Procedures are not put in place to monitor Levels of Customer Service and Operational Performance.

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Design Summary Performance Targets / Indicators Date Sources / Reporting Assumptions and Risks Mechanisms

Outcome By end Project (2013): Assumptions

Improved wastewater 1. Performance monitoring and management system in 1. NWSDB reports to 1. The PPTA proposed Wastewater management management performance in place; regulatory bodies; Unit is established and operates as an Greater Colombo autonomous unit within the NWSDB; 2. Improved Levels of Customer Service and 2. CMC and DMMC unit Operational Performance achieved; monthly reports; 2. PPTA recommendations implemented for the management of the wastewater system or 3. NWSDB’s compliance with prescribed standards. 3. NWSDB Annual Report and alternatives, where these will result in Corporate Plan reviews; demonstrable better performance than as set 4. Improved Level of Customer Service provided to out in the PPTA. sewerage customers of the NWSDB. 4. CEA Reports. 3. NWSDB adopts a policy of Asset Management Planning.

Risks

1. Failure to implement the Performance Partnership Agreement between the NWSDB and the CMC and DMMC unit and poor

implementation of performance indicator monitoring;

2. No base-line data for levels of service and performance upon which improvement can be judged;

3. Operators are not paid for their work and for improved performance due to, amongst other reasons, inadequate tariff;

4. Non-fixed operational plant is not maintained and spare parts are not available.

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Design Summary Performance Targets / Indicators Date Sources / Reporting Assumptions and Risks Mechanisms

Outputs Assumptions

1. Rehabilitation of 1. Wastewater from population served in the built-up NWSDB and CMC Annual 1. Upgrading works financed by Danish and sewerage infrastructure areas of CMC and DMMC areas will increase from a Reports and Budgets Austrian Governments are completed on time in Colombo sewer area current 30% to 3645% by 2012; and desired outputs are achieved; PMU / PIU reports 2. Population of 645,000 current connected population 2. Recommendations within the PPTA to rectify and 150,000 first-time sewerage persons will benefit Site surveys, contract supervision shortcomings in the DANIDA and Austrian from a more reliable sewerage system in Colombo, reports, and scheme completion projects are implemented; by 2012; reports Risks 3. 150,000 people (approx. 35,000HHs) predominantly, Pollution tests (NWSDB and but not exclusively, poor people will be provided with CEA) 1. Households provided with first-time sewerage first time piped sewerage facilities; facilities, agree to connect;

4. 100% of wastewater discharged to the marine 2. Works contracts are not adequately supervised environment will be fine screened; resulting in poor quality workmanship and/or costly contract over-runs and additional 5. There will be an estimated reduction of 9.750 tonnes payments; Biological Oxygen Demand and 1.20 tonnes of suspended solids to inland waters as a result of the 3. Within the evaluation of design and build works provision of first time sewerage facilities; contracts inadequate attention is given to the O&M requirements such as spares, operability 6. Reduction in the number of pumping station failures and operating costs. resulting in a reduction in the number of sewage overflows

7. Pumping stations will be operated in such a way as to reduce the silting of the incoming sewers.

2. Strengthening 1. Operational staff are trained in management, 1. PMU Reports; Assumptions Institutional Development operational and technical requirements to enable them to complete their assigned tasks; 2. NWSDB and CMC reporting 1. Implementing agencies amenable to capacity on the implementation of building and prepare and implement Human 2. Adequate Business Systems are established within their Human Resource Plans Resource Plans; the NWSDB, CMC and DMMC to provide support to staff who are trained in their application; 2. Participation sought from all government levels (LAs, District and Provincial) 3. Essential non-fixed operational plant for CMC and DMMC procured; 3. Staff performance is monitored and additional / refresher training provided as necessary training 4. Potable water MIS within the NWSDB augmented to

45 645,000 and 795,000 and 2.2m

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Design Summary Performance Targets / Indicators Date Sources / Reporting Assumptions and Risks Mechanisms

include for sewerage function. Risks

1. Staff turnover reduces the effectiveness of training provided;

2. Inappropriate staff appointed to key posts.

3. Building Management 1. NWSDB and operators competent to operate within 1. Reports of Institutional Assumptions and Implementation a wider commercial context; Development Consultants; Capacity 1 Institutional Development Consultant appointed; 2. Recognised improved performance by Government, 2. PMU reports; customers and other stakeholders; 2. Culture of continual improvement adopted by 3. ADB Reports; Director and Senior Managers of NWSDB; 3. Compliance with NWSDB Vision and Mission Statements 4. Annual Report of the 3. Effective Change Management. NWSDB; Risks 5. Customer complaints; 4. Inadequate funding to support improvement and 6. Newspaper and other media change comments;

7. Ability to achieve further external funding.

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11. Procurement of the Greater Colombo Wastewater Management Project

11.1 Prioritisation of Schemes within Funding Limit

385. The funding loan package can be assumed to be less than the cost of all works considered necessary for a complete rehabilitation of the system and full expansion to all currently under- served areas. There is a need to prioritise works so that the funding loan can be prepared according to the investment available.

386. Within the PPTA, schemes have been prioritised taking into consideration the TOR requirements to rehabilitate the existing system and to extend the system to improve the quality of life for the urban poor, within the three components:

(i) Refurbishment of the existing Colombo sewer system, including replacement of under- capacity sewers (Component 1a of GCWMP);

(ii) Provision of first-time sewerage within currently under-served areas (Component 1b);

(iii) Three pilot studies with the on-site areas (Component 1c).

387. We recommend and, therefore, have adopted the following procedure for prioritisation:

(i) Priority 1 - those schemes for which the NWSDB has a legal or regulatory liability and is currently not compliant;

(ii) Priority 2 - enabling schemes for assessed Priority 1 schemes;

(iii) Priority 3 - those schemes to rectify operational performance that could cause a legal or regulatory non-compliant event e.g. a sewer overflow polluting a natural watercourse;

(iv) Priority 4 - those schemes which bring significant improvements to the quality of life of people within Colombo or are environmentally beneficial e.g. first-time sewerage schemes;

(v) Priority 5 - others, such as those for efficiency savings.

388. Within the prioritisation process, we have adopted a “total system” approach whereby scheme prioritisation follows a systematic logic of starting at the sea outfalls and progressing through the upstream components of the network, finally to the individual property connections.

389. Within the GCWMP prioritisation, there are two basic alternatives: whether to spend available capital to rehabilitate the sea outfalls and install fine screens; or to use the same funding for increased coverage within the under-served areas. Without the rehabilitation works on the sea outfalls and the installation of fine screens, the wastewater discharge will continue to impact more severely on the marine environment, with less efficient dispersion and dilution of wastewater and an increased probability of the sewage plume reaching land. However, there are areas of population within the city boundaries without any form of piped sewerage that results in untreated sewage being improperly and inappropriately disposed of - at worst running in road gutters and drains and at best discharging directly into nearby watercourses, ultimately entering and polluting the sea along the shore line.

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390. Rehabilitating the sea outfall produces limited benefits to the marine environment; first-time sewerage schemes will directly improve the quality of life for predominantly poor people and indirectly improve the environment for most people. In addition, provision of first time sewerage will provide additional income to the NWSDB; give short term local employment to the local population during construction and generally improve the environment of Colombo with potential secondary benefits such as increased tourism and reduced load on medical services.

391. The installation of fine screens will only ensure compliance against a standard determinand for floatable solids; without treatment the discharge remains at risk of non-compliance for other determinands such as BOD and heavy metals.

392. In light of the need for the NWSDB to be legally compliant; the CEA’s duty to enforce compliance with the standards and the ADB’s obligation under the Montreal Convention for the marine environment, we are recommending that the rehabilitation of the sea outfalls and the installation of fine screening have the highest priority.

11.2 Summary of Loan Components

393. The PPTA can be considered as comprising three components:

Component 1: Developing and improving wastewater infrastructure within Greater Colombo.

Subcomponent 1a: Rehabilitating the existing sewerage network (project approach);

Subcomponent 1b: Expanding sewerage to un-sewered or under-served areas within the Colombo sewer system boundary (sector like approach);

Subcomponent 1c: Providing on-site sewerage facilities within the outer areas of Greater Colombo (sector-like approach).

Component 2: Institutional strengthening

Subcomponent 2a: Establishing the NWSDB Wastewater Management Unit;

Subcomponent 2b: Developing CMC’s operational capacity;

Subcomponent 2c: Developing the DMMC’s operational capacity.

Component 3: Supporting (policy development and/or) Project Management

11.3 Loan Value

394. Within the PPTA, a Final Report has been prepared based upon a loan comprising US$135 million package (inclusive of GoSL $35m contribution) from year 1 with implementation over the five year period 2008 to 2012.

395. Breakdown of the proposed loan into components is shown in Tables 11.1 and 11.2:

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Table 11.1 - Costs by Project Component

Element Cost Component 1a – rehabilitation of the existing system $68.808 Component 1b – First-time sewerage within under-served areas $40.303 Component 1c – Pilot studies $1.849 Component 2 – Institutional strengthening $3.463 Component 3 – Support $6.366 Financing costs $12.863m Total $133.653m Note: Costs shown are inclusive of all costs, as shown in Table 11.2, other than Financing Costs

Table 11.2 - Analysis of Contingencies, Taxes & Financing Costs

Component Amount (US$m) Percentage of the total loan Physical Contingency 10.144 10.1% Price Contingency 3.745 3.7% Financing costs 12.863 12.9% Re-settlement costs 0.897 0.9% Taxes 23.656 23.7% Total 51.306 51.3%

11.4 Schemes for Inclusion in Funding Load

396. Schemes recommended for inclusion within the investment funding comprises Table 11.3:

Table 11.3 - Prioritised Schedule of Schemes Recommended

Under-Served Sea Outfalls Fine Screens Pumping Stations Sewers areas Construction of a new pumping station on existing Rehabilitation of Fine screens at sites at: Bloemendal the Mutwal and Connections to U3 Madampitiya and (Southern Wellawatte sea & diversion of W1 Wellawatte 1. Bambalapitiya, Area Only) outfalls 2. Borella

3. Maligawatte.

1. Vystwyke PS to Madampitiya PS, Screenings Construction of a 2. Bambalapitiya washing plants at East new Fort PS on a PS to Madampitiya and Dematagoda new site Wellawatte Wellawatte PS

3. Fort PS to Harbour PS

Pumping Sewers

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Under-Served Sea Outfalls Fine Screens Pumping Stations Sewers areas Refurbishment of existing pumping stations at

1. Dehiwela, Increase capacity of the S1, O3A, Fine screens at 2. Harbour, M22, O17, A86, East San

Harbour PS U1, M13, T11, U3, Sabastian 3. Wellampitiya, A7, M48 and M64 4. Kollonnawa, gravity sewers

5. Meetotamulla,

6. Mt Lavinia

Sewer cleaning Mahawatte

Separation of Mattakuliya

drainage systems North

Narahanpitiya

North

Kollonawa

North San

Sabastian

South San

Sabastian

11.5 Method of Procurement

397. Within Table 11.4 is set out the method of procurement for the various services and works.

Table 11.4 - List of Procurement Packages

Contract No. Type of Contract Estimated Value US$ millions -/-/01 Design and Build 31.163 GCWMP Rehabilitation Construction Works for Fine Screen s and Pumping Stations -/-/02 Design and Build 38.803 GCWMP Rehabilitation Construction Works for Sewers and for provision of first time sewerage in under-served areas -/-/03 Design and Build 10.756 GCWMP Rehabilitation Construction Works for Sea Outfalls -/-/04 Consultancy 3.388 Services GCWMP Rehabilitation Construction Works:

Supervision Consultancy -/-/05 Goods and Related 1.000 Services. MIS Enhancements

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Contract No. Type of Contract Estimated Value US$ millions -/-/06 Goods and Related 1.770 Services. Supply of Non-Fixed Operational Plant -/-/07 Works, Supply and 0.750 Install Pilot Studies Construction Works -/-/08 Consultancy 1.32 services Institutional Development Consultancy Services

398. The method of procurement for the works construction within GCWMP will be by “design and construct”46. One of the principal advantages of this procurement route is that it allows the contractor to use his skills and experience in materials selection, procurement and construction technology to “optimise” the total asset creation process. It is important that this advantage is not lost by over specifying within the work contract which should, therefore, be performance driven; and not prescriptive.

399. Over specifying will also pass “construction and performance risk” back to the Board, rather than leaving it with the contractor.

400. A disadvantage of the “design and build” system when there is no requirement for on-going O&M of the asset created, as for example in a concession contract, is for the contractor to propose a low CAPEX/high OPEX solution which will involve the NWSDB with on-going operating costs that will outweigh any initial capital savings over all or part of the full-life of the works procured. At the time of evaluation of the works contracts, the NWSDB will need to give careful attention to the OPEX costs that any contractor’s proposals will incur.

46 See Volume 4

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12. Economic and Financial Analysis

12.1 Introduction & Scope to Economic Analysis

401. This chapter contains a summary of the economic assessment and analysis carried out for the proposed project. Separate assessments have been made for each of the main project components as well as an overall assessment for the project. The separately assessed components are:

• rehabilitation of the main sewer system • the provision of services to currently under served areas • on-site development areas 402. All financial and economic analyses are based on the status quo and conservative assumptions to avoid over estimation of project benefits. For the economic analysis only direct, quantifiable benefits are included in the calculations. Several of the subprojects have environmental and other external benefits that are not included in the assessments.

12.2 Context of the Project

403. The Government’s goals for the sanitation sector are to i) provide adequate access to sanitation for 70% of the population by 2010 and 100% by 2025, ii) provide conventional sewers for major urban areas and selected growth centres, iii) provide standard on-site sanitation to those who are not connected to conventional sewerage systems or other sanitation schemes. At the same time the Government aims to reform service delivery, improve accountability and ensure adequate provision for low income groups. The sustainability of the sector will be supported by improving operational efficiency to lower costs and by increasing tariffs to reflect these costs.

404. The sewerage network in Colombo is limited to an area serving approximately 25% of the population of the urban area and much of the system is old and in need of rehabilitation. The pump stations are in poor condition and do not operate effectively, the sea outfalls are damaged and parts of the main sewer system are in critical condition. There is no fine screening or other treatment of the effluent prior to discharge to the marine environment. Effective sewage disposal is necessary to protect the urban and wider environment and to minimise the risks to human health that may result from major disruption to the system. Sewerage and sanitation services are also a necessary condition for continued economic growth and for attracting the local or foreign investment that the economy needs in order to achieve and sustain high growth rates.

405. Within the main sewered area of the city, there are a number of areas, of varying size, that are not connected to the main sewers. Especially in the low income areas the population is adversely affected by inadequate drainage and unsanitary conditions. Connecting these areas to the main sewer system will help meet the basic sanitation needs of the people, contribute to improvements in the local environment, help reduce the pollution of the city’s heavily polluted canals and waterways and increase the access of poor households to urban infrastructure facilities. In some areas it will enhance the attractiveness for follow-on investments in other infrastructure and economic activities. Similar conditions pertain in the on-site development areas of the city to the east of the main sewered area, but in these areas inadequate sanitation arrangements frequently have negative impacts on the quality of surface water bodies and may lead to contamination of ground water in areas where the population depends on wells for their water supply.

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406. The proposed project will rehabilitate pump stations and critical parts of the main sewer network, including the outfalls, to ensure reliable and more efficient operation of the system and to eliminate potential risks to the environment, public health and normal life. Some of the under served areas will be connected to the system and for the on-site areas a number of pilot projects will seek effective solutions to the sanitation problems of the area.

12.3 Present Situation in the Project Areas

407. Health. Morbidity data in Sri Lanka is only available for inpatient treatment at government hospitals and clinics. It is not available for those admitted to private hospitals, ayurveda hospitals or for the large number of patients attending outpatient departments at government hospitals, private dispensaries or medical practitioners. It is estimated that the private sector for western and traditional medicine account for more than 55% of the patient load.

408. The Ministry of Health Annual Bulletin for 2003 (the latest available) reported a morbidity rate (for hospital inpatients only) for diarrhoeal diseases of 622.5 per 100,000 population for 2003 with a mortality rate of 0.6 per 100,000. The morbidity rate varies over the years but was down from 743.6 in 2002 and 857.4 in 2001. These numbers are for the whole country. Morbidity rates for Colombo may be lower than the national average given better medical services. Overall, morbidity rates for common water related diseases are probably rather low, although there may be gains to be made in reducing their occurrence in some parts of the project area, especially among children. The data base for assessing such gains is not available so no attempt has been made to quantify them.

409. Limited data from the socio-economic survey carried out for the TA suggest that direct income losses to households from water borne diseases (through income earners losing work days) are small.

410. Water Supply. Most households in the project area are connected to piped water supply. In Greater Colombo as a whole, the proportion of households so connected is estimated at about 95%, although in some low income areas access is only to a public standpipe. In areas further to the east and the project on-site areas, the proportion of households with piped water supply is only about 50%, mostly in areas along the ridges and higher ground. Households in low lying areas are more likely to depend on wells.

411. In 2006, the 12 unsewered areas were estimated to have a total population of 261,800 or about 57,300 households, assuming an average household size of 4.3. The 7 of these areas included in the project have an estimated 2006 population of 111,945 or about 24,200 households.

412. In the under served areas, there is a combination of high density and low density housing. The high density, low income housing areas are mostly served by latrines or water sealed latrines connected to holding tanks that need to be emptied by gully trucks at regular intervals. In these areas, the houses are mostly on very small plots of land without space for septic tanks but there are also places where there is a little more space and several households may share a toilet that is connected to a septic tank. The frequency of emptying depends on the size of the holding tank and number of people using it but most appear to be serviced every 1 to 3 months.

413. Grey water is discharged from the households to the storm water drains. A gully bowser service is provided by CMC without direct charge, but some households make informal payments to operators to have tanks emptied.

414. The low density housing areas are also middle income areas. House lots are larger and many households probably have septic tanks. Grey water goes either to the septic tanks or to the storm water drains, as elsewhere, but the lower housing density, lower flows and better

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solid waste management mean that these drains function more effectively. Current operating costs are presumably only for the periodic de-sludging of septic tanks.

415. In the on-site areas, many households have septic tanks or storage tanks that may or may not operate effectively. Especially in low lying areas, overflowing during the wet season is a common problem. Effluents (overflows) go either to nearby storm water drains, and thence to local canals, streams or lakes, creating problems for downstream users, or into soaks with the possibility of contaminating ground water. The main financial costs for households are the cost of having tanks emptied periodically by the local council’s gully bowser.

12.4 Demand Forecast for Waste Water Services

416. For the project preparation, a new calculation of expected wastewater flows in the Colombo sewered system in 2030 has been made.47 This calculation is based on changes in land use as envisaged by the Urban Development Authority (UDA) and lower water consumption and return rates than previously projected. The conclusions from the study are that the two outfalls will be able to cater to the 2030 flows from their respective existing catchment areas. Some pump stations and sewer sections will have lower flows than expected in the projections of the GCSP study, mainly because of reduced water consumption. Several pumping stations, including Wellawatta, Maligawatta and Bambalapitiya will require upgrading to be able to cater for increased flows by 2030. Similarly, some main sewers will need to have increased capacity to cope with future flows. The works to be implemented under the project will ensure the system has the required capacity to cope with the projected 2030 flows.

417. The estimated number of connections to the main sewer system in the Colombo Municipal Council and Dehiwala-Mt. Lavinia Municipal Council areas is summarised in Table 12.1 - from NWSDB data. There is also no data on the average number of households per domestic connection.

418. Currently domestic connections account for about 80% of the total. From consideration of the population in the sewered area, it is clear that many connections serve multiple households (in apartment buildings, for example), but the actual number of households served is not known since none of the agencies concerned have appropriate records. However, based on 2006 estimates for population in Colombo, Kolonnawa, Thimbirigasyaya and Dehiwala Mt. Lavinia DS Divisions and an average household size, according to Department of Census and Statistics data, of 4.3, it is estimated that the total number of households in the service area is 205,740 or which 57,288 are in the currently unsewered areas.

419. For assessing financial and economic impacts, an average monthly flow of 18 m3 per household has been used.

Table 12.1 - Connections to the Sewer System

Domestic Non-Domestic Total % Domestic Colombo MC 51,020 11,263 62,283 81.9 Dehiwala-Mt. 2,041 200 2,241 91.1 Lavinia MC Total 53,061 11,463 64,524 82.2 Source NWSDB

47 See Greater Colombo Wastewater Flow Calculation Report in Volume 2 of this report for a detailed description of the study and the detailed results.

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12.5 Project Interventions

420. The principal project interventions for the main sewer system will aim to ensure that the system continues to operate efficiently into the future. These interventions are:

• the rehabilitation six pumping stations and the renewing of three others that are no longer operating efficiently or which require increased capacity • rehabilitation of the two sea outfalls to improve flows and dispersal • installation of fine screens and grit removal prior to the discharge of the wastewater through the Mutwal and Wellawatte sea outfalls48 • reconstruction of main sewers that are most at risk of under-capacity. These project activities will ensure that the system continues to operate efficiently into the future. 421. For the twelve under served areas within the main sewered area that are not currently connected to the sewer system, plans and cost estimates were prepared under the PPTA. Some of these areas (depending on cost and the availability of project funds) will be connected to the system under the project, while the remaining areas will be available for funding under future projects.

422. For the on-site areas to the east of the present sewered area, the project will implement three pilot schemes for solving the particular problems of sewage collection, treatment and disposal in these areas at the community level.

423. Institutional strengthening and development will be implemented for the NWSDB and for the operational units within NWSDB and CMC with a focus on the management and financial management for the sewerage system.

424. With completion of the proposed project, those already connected to the main sewer system will experience no change in the service received. Rehabilitation of the main sewer system will only guard against further future deterioration in the existing infrastructure and ensure that the pumping stations and sea outfalls are able to cope with projected flows through to 2030. Reconstruction of critical main sewer sections will ensure that flows are not disrupted by major failures in those particular sections.

425. In the currently under-served areas that are connected to the main sewer system, both grey and black water will be collected by the sewers. This will lead to a direct improvement in the living environment, which in some of these areas is badly affected by blocked storm water drains with consequent bad odours, mosquito breeding grounds and so on. In some places overflows from septic tanks or latrine holding tanks also pollute drains. Reducing grey water flows to nearby polluted canals and waterways may also have a small positive impact. Overall, the project should have a beneficial impact on the immediate environment and in some places there may also be a marginal impact on health. These impacts will vary among the under served locations and are likely to be greatest in the highest density low income areas such as Mattakuliya and least in the middle income areas such as Kirillapone, where the direct environmental and health impacts are likely to be very small. Some households – those who now pay to have tanks emptied by gully bowsers - will experience reduced costs for sanitation services since the proposed wastewater tariff is most likely to be lower than these costs. Other households will have to pay the tariff where they are now not paying directly for having tanks emptied. The financial impact on households will therefore be mixed.

426. The impacts of the project in the on-site areas will be very similar to those in the under served areas. In an area such as Maharagama, impacts will depend upon the location of households – whether on higher land on the ridges or in the lower lying areas. Financial impacts will also

48 The works to be installed under GCWMP will supplement those under construction within the DANIDA and Austrian funded projects at Madampitiya and Wellawatte, respectively.

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depend upon the present situation of individual households with regard to payments for tank emptying services.

12.6 Project Economic Analysis

427. The analysis is in 2007 constant prices. An exchange rate of SLRs 110 = $1.00 has been used, the discount rate is 12% and the project life is 25 years. A standard conversion factor of 0.9 has been used, which is the most common value used in other ADB PPTAs since 2001.

12.7 Project Benefits

428. The main quantifiable benefits for the project will be derived from i) willingness to pay for sanitation services, ii) O&M costs savings, iii) some limited health benefits, and iv) expected changes in property values due to the installation of sewer connections.

429. A socio-economic survey which included an assessment of willingness to pay for wastewater services was carried out during the third quarter of 2006. 49 Stratified random sampling was used to select 1,000 respondent households in Colombo Municipality, Dehiwala Mount Lavinia Municipality and the Kolonnawa Urban Council area, with the number of households selected in each area in the same proportion as its population to the whole. WTP was assessed using the contingent valuation method with respondents being asked what they would be willing to pay for an improved wastewater service. The results of the WTP assessment is summarised in Table 12.2 - .

Table 12.2 - Willingness to Pay for Sewerage Services (SRLs/month)

Household Connections Sample Size Mean WTP Median WTP

Water and sewerage 506 79.4 70.0

Water only 305 75.4 70.0

Neither water nor sewerage 36 66.1 50.0

Total 847 77.4 70.0

Note: 847 respondent households were prepared to pay for improved sewerage services and 59 households (7% of households responding to WTP questions) were not willing to pay anything.

430. A separate survey was carried out to collect information on the willingness of businesses and institutions to pay for wastewater services. The sample included 100 organisations selected purposively and distributed across the project area. The final sample was made up of 21 public sector organisations, 73 businesses and industries and 6 other organisations such as NGOs. Ninety-six of these organisations are connected to the main sewer system. In this case respondents were asked to gauge how much they would be willing to pay for an improved wastewater service. The overall average WTP was SLRs 414 per month (see Table 12.3) range of responses among those willing to pay varied between SLRs 50 and SLRs 2,500 per month.

Table 12.3 - Willingness to Pay by Type of Organisation

Type of Organisation N N (WTP = 0) Mean Median

Government / Public Sector 21 9 445.8 300.0

49 see also Greater Colombo Wastewater Project (TA 4531-SRI), Willingness to Pay Report, January 2007. This report is included as an annex to Volume 9 of this report.

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Business / Industry 73 13 410.8 200.0

Other / NGO 6 0 388.3 350.0

Total 100 22 413.9 200.0

431. Willingness to pay was assessed in two currently unsewered areas and in the areas proposed for the on-site developments through discussion groups and surveys of relatively small numbers of residents. The results are given in Table 12.4. These figures are generally higher than those found from the main WTP survey.

Table 12.4 - WTP in Unsewered and On-site Areas

Area WTP for Connection WTP Monthly Fee

Mattakuliya 3,627 225

Kirrilapone 4,941 225

Maharagama 4,795 366

Kotte 3,225 209 Source: Consultants’ surveys

432. O&M cost savings for the main sewered areas have been estimated by comparing present spending by CMC and DMMC on the operation and maintenance of the system with the expected costs after completion of the project. Savings accrue from changes in energy consumption for new pumps and reductions in spare parts requirements and maintenance costs for pump stations. In the under served areas, the O&M of the future sewered system will be less than the costs of the present bowser service for emptying cess and septic tanks. In the on-site pilot areas with project O&M costs will be higher than the present costs.

433. The potential for benefits accruing from the avoided costs of future collapses in main sewers was investigated but the needed data on the costs of repairing and dealing with major collapses is not available from CMC and NWSDB. Since these events are not yet common and since the project will only rehabilitate a limited portion of major sewers, the benefits that might accrue from this source would anyway be relatively small.

434. There may be some avoided capital costs for new households in unsewered areas, since it would no longer be necessary to install a septic or storage tank as a new house could be connected directly to the new sewer lines. However, these costs are largely off-set by the cost of connecting to the sewer system, so potential benefits from this source would be very small (and quite possibly negative) and have been disregarded.

435. Based on data from the main WTP survey on the health costs of water related diseases, an estimate has been made of health benefits of the network rehabilitation.

436. An assessment has been made of property values in two typical under served areas and in two on-site areas. Residents, property agents, property valuers and government officers were canvassed for their assessments of current property values in these areas and the potential impact of the project on these values.50 The following table summarises the results of these surveys. Expected increases in property values constitute a significant portion of project benefits.

50 Details of these surveys is included in Volume 7, Part I, Appendix 1 of this report.

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Table 12.5 - Impact of the Project on Property Values Expected Average Value Increase used Area Classification increase with (SLRs mln/ perch)1) in analysis 2) project (%) Mattakuliya high density 0.531 68.3% 12.3% Kirrilapone low density 1.453 33.8% 8.1% Maharagama on-site 0.946 22.4% 22.4% Kotte on-site 0.518 31.4% 31.4% Source: Consultants’ surveys Note: 1) 1 perch = 30.25 sq. yards; 160 perches = 1 acre = 0.405 ha. 2) For the unsewered areas, property value increases were included in the analysis at 18% of their expected values.

12.8 Rehabilitation of the Sewerage Network

437. Rehabilitation of the sewerage network includes the whole project except for the on-site pilot projects. Project costs include all institutional development and project management costs. Quantified benefits are beneficiaries willingness to pay for sewerage services, O&M cost savings, limited health benefits and anticipated increases in property values, in particular for properties in the currently unsewered areas that will be connected to the main sewer network under the project.

438. The EIRR for the project is 19.6% and the NPV is SLRs 1,314 million (see Volume 7, Part I for further details) A sensitivity analysis of these results for key variables is shown in Table 12.6 -. The economic indicators for the project are most sensitive to changes in investment costs and to the increase in property values generated by project implementation.

Table 12.6 - Rehabilitation of Sewerage Network – Sensitivity Analysis (EIRR %)

Variable +10% -10% Switching Value

Investment costs 14.6% 26.7% 16.9%

O&M costs (with project) 19.4% 19.8% +280%

WTP monthly fee 1) 20.3% 18.9% --

Health benefits 19.9% 19.3% --

Property value increase 24.1% 15.9% -22.3%

Delay all benefits 1 year - 13.4%

Notes: 1) WTP for domestic customers

12.9 On Site Development Areas

439. An economic assessment was made for each of the three on-site pilot projects. Although these are pilots to test technical solutions to problems in particular areas around Colombo, they need to be financially and economically viable as well as technically viable solutions. The results of the assessments are given in the table. Both the Maharagama and Kaduwela pilot projects are economically viable. The Kotte project is only marginally so and will certainly require financial subsidies from the local authority. This may be partly due to the small scale of the pilot.

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Table 12.7 - On-Site Pilot Projects – Economic Assessments

Switching Values NPV (SLRs On-Site Area EIRR 1) Property mln.) Investment O&M WTP Values

Maharagama 18.4% 9.9 +9.0% +57% -58% -9.5%

Kotte - 0.56 +27% - -44% -2.7%

Kaduwela 37.3% 4.6 +138% - -60% - Note: 1) Entry fee for Kaduwela 2) For technical reasons, the EIRR is not calculated for Kotte.

12.10 Risks

440. Both the rehabilitation of the sewerage network and the pilot projects face a number of economic risks, but the most significant of these is the dependence of economic viability on the expected impact of the project on property values in the currently unsewered areas and the pilot project areas. The survey of property values yielded quite high estimates of the increases in values expected to come from connecting to the main sewers or for improving sanitation arrangements in the pilot areas. In some areas, where there are current pollution and environmental problems arising from the present sanitation arrangements, relatively high percentage value increases may have some justification. In other areas, where the current problems are less severe, relatively high value increases may not accrue. To assess the effect of a single cause on property values is difficult particularly when numerous other factors are also tending to push values higher. There is a real risk that the increase in property values assumed in the analysis will not be achieved after implementation of the project.

441. Investment costs also pose some risk to the project. There are aspects of the rehabilitation works that involve significant unknowns, associated on the whole with ground and soil conditions along pipelines and at pump stations where excavations will be undertaken. However, the project costs for civil works include a physical contingency element of 15%, which is expected to be sufficient to cover all eventualities.

12.11 Financial Analysis – Beneficiary Households

442. The direct financial benefits of the project for households accrue from the difference between present O&M costs and future payments for the O&M of the new systems – whether that is a connection to the main sewer system or to a local system in the on-site areas. Positive financial benefits will only accrue to those households in the currently unsewered areas that have cess pits requiring frequent emptying (see Table 12.8 - ). In high density areas, such households will have a financial benefit, on average, of about SLRs 300 per year. Households in medium density areas, connected to the sewer system under the project, which are paying for services now will face a small financial disbenefit of about SLRs 100 per year. For all those households already connected to the main sewer network, there will be a financial disbenefit once the proposed wastewater tariff is introduced since they will pay the new tariff while at the same time local authority property taxes are not expected to be reduced to reflect the change in the financing of wastewater services.

443. In the on-site development areas, households face significant financial disbenefits from the introduction of the pilot schemes. However, households in these areas have indicated their willingness to pay more than they are paying at present, in order to have an improved service and an improved local environment. In Maharagama, the average WTP expressed during PPTA surveys was SLRs 366 per month (SLRs 4,392 per year) and in Kotte the average WTP is SLRs 209 per month (SLRs 2,508 per year). The operating costs of the Maharagama

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scheme should be paid willingly enough by the households connected to it, but the high operating costs for the Kotte scheme will certainly require a subsidy from the local authority. This can be justified on the grounds that it is a pilot scheme, the primary purpose of which is to demonstrate a technical solution to a local problem. However, as has already been noted, reductions in per connection O&M costs will be necessary (possibly through increased scale) before this particular solution could be applied more widely (assuming it is shown to be technically sustainable).

Table 12.8 - Financial Impact on Households (SLRs/year)

Present Average for Range of Future Average Average Area Households Current Tariff or Financial Financial Paying Payments Charge Benefit Cost

Unsewered Areas

- high density 260 1,169 800 – 1,800 864 -604

- medium density 234 757 - 864 -630

On-site Areas

Maharagama 132 207 133 – 375 2,928 -2,796

Kotte 1,130 1,130 600 – 2,000 13,271 -12,141 Source: Survey data and engineer’s estimates. Note: 1) Medium density calculated as an average of high and low density locations. 2) Wastewater tariff for main sewer network estimated at SLRs72 per month for an average household 444. In addition to the financial impact of the project on households, the question of affordability arises. A common measure of affordability for water supply is that for poor households the cost should not exceed 5% of household income. By extension we could say that the cost of water services should not exceed this level of income – i.e. water supply and waste water should be within the 5% level.

445. The current official poverty line for Colombo is SLRs2,505 per month.51 In Colombo the average household has 4.3 members, so the household poverty line monthly income is SLRs 10,772, 5% of which is SLRs 538. The data in Table 12.8 - , above, for future tariffs and charges are annual figures. For the main sewered areas, the monthly waste water tariff will be, on average, SLRs 72. In Maharagama the required monthly fee for system O&M is SLRs 244 for households. For households at the poverty line both of these fees fall within the 5% level, still leaving adequate amounts to pay for water supply – at the current tariff, average household water consumption of about 18 m3 per month costs just under SLRs 100 or under 1% of the household poverty line income. For the pilot project in Kotte, however, the monthly cost is much more than 5% of the poverty line income – in fact, in this case it would probably require a household income closer to SLRs 40,000 per month to afford both water and wastewater services within the 5% limit. This pilot project will require subsidies from the responsible local authority.

12.12 Project Beneficiaries

446. The total number of beneficiaries of the project is estimated at 797,636 (2006 population estimates).52 This includes an estimate of the population already served by the sewerage

51 Department of Census and Statistics poverty line update for May 2007. 52 see Volume 7 Part I for the detailed estimate.

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network plus those that will be added with the connection of 10 currently unsewered areas and both direct and indirect beneficiaries in the on-site pilot project areas.

12.13 Poverty Impact

447. The national poverty line is defined as a monthly per capita income of SLRs 2,319.53 For Colombo, the figure is higher at SLRs 2,505 giving a monthly household income of SLRs 10,772 for an average household of 4.3 persons. In Colombo district, the proportion of the population below the poverty line is 6%, according to the most recent information available on the DCS website.54

448. Poverty impact ratios (PIR) have been estimated for the Sewerage Network Rehabilitation and for each of the three pilot projects. For the Network Rehabilitation the PIR is 11.7% and for the pilot projects at Maharagama, Kotte and Kaduwela the PIRs are 4.3%, 26.9% and 20%, respectively. The high figure for Kotte arises because although the headcount poverty index in this area is lower than for Colombo, the social survey identified 15 out of 85 families living in the 73 households that will participate in the pilot project as being poor. In Kaduwela it is assumed that the proportion of poor using the public toilet facilities is probably higher than their proportion in the general population of the area; the PIR for this pilot project may be an over-estimate.

12.14 Cost Estimates

449. The project costs have been prepared based on the costs for the proposed project activities as estimated by the TA team. The project cost analysis tables are presented in Volume 7 Part B. The project cost analysis has been carried out using COSTAB.

450. Costs for the rehabilitation of the pump stations and two outfalls have been based on the cost estimates prepared for the Greater Colombo Sewerage Project in 1999. These have been updated to 2007 costs using i) the local ICTAD index for waste water and drainage for local costs, and ii) the World Bank MUV index for imported equipment and materials. As a result the increase for local cost items is 116% of the base costs and for imported items the increase is 92% in local currency terms.55

451. Cost estimates for all other project activities are based on current costs and 2007 prices.

452. Taxes and duties have been estimated for each expenditure category based on the currently applicable rates of import duty, surcharges, levies and VAT. Total tax was estimated for key project inputs in each expenditure category and average rates for the category generated taking into account estimated proportions of foreign and local costs.

453. Domestic inflation has been included at 10% between data collection and project negotiations, 9% for 2008 and 7% for subsequent years. International inflation is 2.8% for the current year and 1.2% per year subsequently. These are the current rates advised by ADB. The current exchange rate is $1 = SLRs 110. CPP exchange rates estimated for subsequent years.

53 Department of Census and Statistics, Official Poverty Line May 2007 54 Department of Census and Statistics, Headcount Index and Population Below the Poverty Line by DS Division – Sri Lanka, 2002 55 Costs have been entered into COSTAB in local currency with all adjusted estimates rounded to the nearest SLRs 1,000.

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454. Physical contingencies have been included for civil works at 15% of base costs56 and for equipment and materials at 7.5% of base costs. No physical contingencies have been included for other expenditure categories.

455. Project costs are summarised in the following tables. These tables refer to a 5 year project with either all OCR funding or a mix of OCR and ADF funding. (Financing options for a two phase, 8 year project are included in Volume 7.)

12.15 Financing Plan

456. The total cost of the Project is estimated to be $133.6 million equivalent, comprising an estimated $62.3 million (47%) in foreign exchange cost and $71.4 million (53%) in local currency cost. The cost estimates include the provision of $23.7 million in taxes and duties and 9% of base costs for physical contingencies.

457. The project summary is shown in Table 12-9. The detailed cost analysis is in Volume 7, Part B.

458. ADB will provide funding of $100.0 million, representing 75% of total project costs, in the form of a loan from its ordinary capital resources (OCR). The Borrower will be the Government of the Democratic Socialist Republic of Sri Lanka. The OCR loan will have a term of 25 years, an interest rate determined in accordance with ADB’s LIBOR-based lending facility and a commitment charge of 0.35% per annum and a front end fee of 1.0%. The financing for the project components is shown in Table 12-10 and the Project Financing Plan is in Tbale 12-11

56 The percentage for contingencies accounts for the uncertainties surrounding the rehabilitation and reconstruction of pump stations. Soil conditions and the depth at which rock occurs is a particular risk factor for cost over-runs.

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Table 12.9 - Project Cost Summary

(Local '000) (US$) % % Total % % Total Foreign Base Foreign Base Local Foreign Total Exchange Costs Local Foreign Total Exchange Costs A. Improving Wastewater Infrastructure in Greater Colombo Rehabilitating Existing Network 4,470,326 2,811,987 7,282,313 39 58 37,979,299.5 23,890,265.9 61,869,565.4 39 58 Expanding Sewerage to Unsewered Areas 2,373,403 1,624,210 3,997,612 41 32 20,164,114.4 13,799,071.7 33,963,186.1 41 32 On-Site Sanitation Areas 127,997 60,770 188,767 32 2 1,087,444.9 516,293.0 1,603,737.8 32 2 Subtotal Improving Wastewater Infrastructure in Greater Colombo 6,971,726 4,496,966 11,468,692 39 91 59,230,858.7 38,205,630.6 97,436,489.3 39 91 B. Institutional Strengthening 192,063 193,983 386,045 50 3 1,631,738.6 1,648,051.1 3,279,789.7 50 3 C. Supporting Project Management 275,318 452,435 727,753 62 6 2,339,064.8 3,843,828.5 6,182,893.3 62 6 Total BASELINE COSTS 7,439,106 5,143,384 12,582,490 41 100 63,201,662.1 43,697,510.2 106,899,172.3 41 100 Physical Contingencies 703,669 490,369 1,194,038 41 9 5,978,277.7 4,166,112.9 10,144,390.6 41 9 Price Contingencies 1,788,749 1,249,816 3,038,566 41 24 2,204,008.2 1,541,485.6 3,745,493.8 41 4 Total PROJECT COSTS 9,931,524 6,883,570 16,815,094 41 134 71,383,948.0 49,405,108.6 120,789,056.7 41 113 Interest During Implementation - 1,462,571 1,462,571 100 12 - 10,829,302.6 10,829,302.6 100 10 Commitment Charges - 146,147 146,147 100 1 - 1,034,859.0 1,034,859.0 100 1 Front-end fees - 138,704 138,704 100 1 - 1,000,000.9 1,000,000.9 100 1 Total Costs to be Financed 9,931,524 8,630,990 18,562,515 46 148 71,383,948.0 62,269,271.2 133,653,219.2 47 125

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Table 12.10 - Financing of Project Components (US$)

(US$) Asian Development Bank The Government Total Amount % Amount % Amount % A. Improving Wastewater Infrastructure in Greater Colombo Rehabilitating Existing Network 48,577,490.4 70.6 20,230,155.5 29.4 68,807,645.9 51.5 Expanding Sewerage to Unsewered Areas 28,555,553.6 70.9 11,747,605.0 29.1 40,303,158.6 30.2 On-Site Sanitation Areas 1,212,611.3 65.6 636,281.5 34.4 1,848,892.7 1.4 Subtotal Improving Wastewater Infrastructure in Greater Colombo 78,345,655.2 70.6 32,614,042.0 29.4 110,959,697.2 83.0 B. Institutional Strengthening 2,901,240.4 83.8 562,014.2 16.2 3,463,254.5 2.6 C. Supporting Project Management 5,889,034.5 92.5 477,070.4 7.5 6,366,104.9 4.8 Total PROJECT COSTS 87,135,930.1 72.1 33,653,126.5 27.9 120,789,056.7 90.4 Interest During Implementation 10,829,302.6 100.0 - - 10,829,302.6 8.1 Commitment Charges 1,034,859.0 100.0 - - 1,034,859.0 0.8 Front-end fees 1,000,000.9 100.0 - - 1,000,000.9 0.7 Total Disbursement 100,000,092.7 74.8 33,653,126.5 25.2 133,653,219.2 100.0

Table 12.11 - Financing Plan (OCR funding only) (US$)

(US$) Asian Development Bank The Government Total Amount % Amount % Amount % I. Foreign 49,393,089.4 100.0 12,019.3 - 49,405,108.6 37.0 II. Local (Excl. Taxes) 37,742,840.8 79.1 9,984,997.6 20.9 47,727,838.4 35.7 III. Taxes - - 23,656,109.6 100.0 23,656,109.6 17.7 Total Project 87,135,930.1 72.1 33,653,126.5 27.9 120,789,056.7 90.4 Interest During Implementation 10,829,302.6 100.0 - - 10,829,302.6 8.1 Commitment Charges 1,034,859.0 100.0 - - 1,034,859.0 0.8 Front-end fees 1,000,000.9 100.0 - - 1,000,000.9 0.7 Total Disbursement 100,000,092.7 74.8 33,653,126.5 25.2 133,653,219.2 100.0

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13. Financial Management

13.1 Financial Sustainability

459. The key conclusion of the Financial Analysis contained within Volume 8 of the Final Report is that:

“As the investment costs of the sanitation sub-projects will be financed fully by the government through grant, the sustainability of the proposed sub-projects will depend on whether or not the government will allow the collection of the sewerage tariff. Assuming that the sewerage tariff will be collected starting 2008, the financial projections for both the CMC and the NWSDB show that the sewerage O&M costs as estimated under the project could be recovered fully with the imposition of the proposed sewerage tariff. The sewerage operations will not be a financial burden to the other operations of the CMC and the NWSDB. The sub-project is considered financially sustainable.”

460. Further comments have previously been made within the Strategy section concerning the capital costs of works and, in particular, our recommended strategy for the on-going tariff policy.

461. The following sections refer only to the financial management of the NWSDB and the CMC.

13.2 National Water Supply and Drainage Board

462. The functions of commercial and finance are presently handled by separate divisions but they are complementary and accounting in nature. The Board should consider bringing these functions together under one division headed by an Additional General Manger (Finance and Commercial) for better and efficient data management.

463. The Finance Division does not have sufficient qualified personnel. The salary scales for various Accountant positions are well below the market. The Board could not attract better qualified professionals to fill these positions. The Board should review the salary scales and recommend adjustment to the government if necessary.

464. The financial management systems are standalone systems with financial reports from regions sent to and consolidated at the head office periodically. Numerous errors and discrepancies result from the manual integration. The agreement entered by the Board with CoOptions Technologies Ltd, India to integrate the existing systems and to develop software to cover other key business functions could improve the reliability and accuracy of data.

465. The current corporate plan does not present a Financial Plan with supporting financial projections that translates action plans into financial terms and key performance and result areas into financial targets or indicators that can be monitored. The Board should make the preparation of a Financial Plan an integral part of the corporate planning process.

466. The position of DGM for Internal Audit is vacant. The vacancy should be filled as early as possible by a qualified staff.

467. There exists the basic system to ensure that there is sufficient internal control in NWSDB like the regular internal and external audits. However, much has to be desired yet in terms of the reliability and accuracy of the financial information generated by the current system. The manual integration of regional reports could be one of the causes. The low qualification of personnel could also be contributory to the poor quality of work in the Finance Division. The Board should attract better qualified personnel with competitive salary scales. The on-going

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integration of the financial managements systems could improve the reliability and accuracy of data.

468. Under the new tariff structure, the tariff for non-domestic consumers is simple with a single consumption block. However, there are 8 consumption blocks in the case of domestic consumers. The Board should consider limiting the consumption blocks for domestic consumers to a few. Having several consumption blocks makes revenue forecasting and tariff setting exercise cumbersome and difficult. Tariff structure should include only as many parts as needed to meet the given tariff goals. The first block could be the lifeline block to address the satisfaction of basic human needs and affordability issue of the poor. The next domestic block could be aimed to recover costs for financial sustainability. The final domestic block could be the penalty block to encourage conservation of water. However, care should be taken in the width and price of each block to achieve their intended goals. Lifeline block should not be too broad as to offer extensive subsidies to the rich. The penalty block should not occur after high volumes of water have been used in the previous blocks and have a price too low to render the block ineffective. Based on clearly defined tariff goals, an ideal rising block tariff structure for domestic consumers could be 0-6 m3 (at a price limited to 5% of household income for the lowest 10th percentile), 6-20 m3 (at a price equivalent to long run marginal cost) and more than 20 m3 as the penalty block.

469. There are 24 customer categories in the new tariff structure. Some categories are even similar in nature and have similar price per unit of water consumption. The NWSDB should consider rationalizing the number of customer categories to a few for easier administration.

470. The NWSDB collection performance was poor. The accounts receivable balance could not be reduced to at least 2 months of water sales. The Board should exert more efforts to improve its collection performance. The Board should not be satisfied with an accounts receivable balance of more than 3 months.

471. The sewerage charge could not be included yet in the existing water bill. The NWSDB billing system has to be modified first to accommodate the sewerage charge in the water bill. The Board should have the modification of the billing system done now even if the introduction of a sewerage charge remains unimplemented until now. Having the modification done now will facilitate the sewerage charge’s early implementation once the final approval process is completed.

472. The two housing schemes, Crow Island and Maligawatta, are connected to the sewer system which the NWSDB operates and maintains. But the NWSDB could not get reimbursement of costs plus administration charge from the NHDA since no service agreement exists between the two agencies.

473. The Board should initiate the execution of a service agreement in order to get reimbursement of costs plus administration charge from the NHDA.

474. At the start of sewerage tariff implementation, the Board should discontinue imposing an administration charge for new connection to lower the cost of sewer connection. The Board should also explore the possibilities of instalment payment of sewer connection with the accredited contractors. These measures will encourage connection to the system and thus maximize the number of consumers subject to the sewerage charge.

13.3 Colombo Municipal Council

475. The vacancies of senior staff positions in the Municipal Treasurer’s Department have affected the timely completion of the accounts. The department should review the vacancies immediately. The CMC should then request and follow up vigorously with the relevant government institution responsible for filling up public service positions.

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476. Under the CMC’s modified accrual method of accounting, no provision for doubtful debts is made in its books of accounts. The Council’s collection performance on property rates for the past several years was very poor. Property rate uncollected at the end of the year is equivalent to over 5 quarters of assessment. By not providing an allowance for doubtful accounts, the CMC’s financial position is misleading if in reality there are accounts that cannot be collected. The CMC should consider “modifying” its modified accrual method of accounting on doubtful debts. The Council should regularly conduct at the end of the financial year a review of the outstanding accounts and determine what accounts are doubtful to be collected. Then CMC should provide an allowance for doubtful debts in its books. The allowance should be adjusted periodically as necessary depending on the results of its periodic review.

477. The CMC’s computer system runs slowly due to inadequate disk space, inadequate RAM and processing power. The equipments are well past their useful lives. The Council should consider the upgrade of the system soon to help improve the functioning of its financial management system. The Council could request the Central Government to fund the upgrade under the ADB’s Greater Colombo Wastewater Project, but this has not been included within the funding proposal.

478. Revenue and expenditure for sewerage operations are recorded in the CMC accounts under the assigned cost centre called drainage-sewerage. The CMC cost centre on sewerage could be further improved for better monitoring and control. The cost centres could be created based on geographical location57.

479. The CMC’s Corporate Plan lacks a Financial Plan, with supporting financial projections, that translates action plans into financial terms and key performance and result areas into financial targets or indicators that can be monitored. As part of the CMC corporate planning process, a Financial Plan that is linked to the Corporate Plan should always be prepared. The Financial Plan should be expressed into a Projected Summary of Capital Finances, Projected Summary of Revenue Finances, Projected Balance Sheet, Projected Sources and Application of Funds and Projected Revenue and Expenditures Accounts covering the same period as the Corporate Plan.

480. The CMC’s budget is prepared in a traditional way, i.e. the budget tends to be based on the previous year’s expenditure and adjusted with inflation. The Council should consider adopting the performance based budgeting system. Under this system, costs and inputs are estimated to match targeted performance and outputs for the ensuing year rather than basing them on the previous year.

481. The adequacy of the Council’s internal control system also depends on the effectiveness of the internal audit function. Without adequate staff in the Chief Internal Auditor’s (CIA) office, the internal audit function might not be carried out effectively. Like the vacancies of senior staff positions in the Municipal Treasurer’s Department, the vacancies in the CIA office should also be reviewed immediately. The CMC should then request and follow up vigorously with the relevant government institution responsible for filling up public service positions.

482. Internal audit findings are sent to the Municipal Commissioner but not to the Municipal Treasurer’s Department or to the relevant department head. The CIA office should also furnish copies of its findings to the Municipal Treasurer’s Department and to the relevant department head. Being primarily responsible for the financial management system of the Council, the Municipal Treasurer’s Department should be aware of the audit findings. The Municipal Treasurer’s Department may need to introduce better internal control procedures so the infraction would not be repeated. The relevant department head should also be aware of the audit findings so corrective actions could be made.

483. The expenditure limits in the Council’s delegation of powers authorizing department heads to approve and incur expenditure were fixed in 1979 and have not been revised since then. The CMC should review and revise these limits to keep pace with inflation. The limits are so low at

57 This is further expanded within Volume 8 of the Final Report

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the present price levels that delivery of municipal services could be delayed because of delay in the approval process.

484. The Council’s current practice of allowing rate payers to pay the current rates assessment even when he still has arrears from previous years could result to misleading unpaid property rate account records. The CMC should adopt the practice in other local authorities to set off any payment against the oldest debt first plus penalties for late payment and then applying any balance against current assessment.

485. Until now, the issue of sewerage assets ownership in the CMC area and the related responsibility for capital works and O&M costs on the assets are still not resolved. An agreement between the NWSDB and the CMC outlining clearly their respective responsibilities should be reached soon.

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14. Scope of Land Acquisition & Resettlement

486. The extent of land acquisition associated with each of the component of the Greater Colombo Wastewater Project is summarised below.

487. The Capital Works Programme itself consists of three sub elements; rehabilitation and upgrading of existing main sewers, rehabilitation and upgrading of pumping stations and outfall head-works, and rehabilitation of the two sea outfalls.

488. Rehabilitation of the existing main sewers will take place within the boundaries of existing urban roads or sewer wayleaves. Therefore there will be no land acquisition or resettlement associated with the sewer main rehabilitation works.

489. With regard to the pumping station rehabilitation works, since all of the work will be carried out on or within the existing structure there will be no requirement for land acquisition or resettlement.

490. The original location of proposed for the Mutwal headworks in the GCSP report within a school sports area, was totally unacceptable from the point of view of the impact on the school and an alternative solution has been evolved within the PPTA, as set out within Volume 2 of the Final Report.

491. Parts of the existing sewer system will not have the capacity to carry the flows predicted for the year 2030. These sewers will be replaced by larger diameter pipes using conventional dig techniques or, in areas where traffic or other disruption effects are expected, using no- dig/trenchless techniques.

492. Sections of the areas were selected for assessment of the effects of the works upon traders and other affected persons to estimate the total levels of financial compensation to be paid.

493. For the underserved areas, the laying of the collector sewers and any necessary junction manholes would take place within the existing roadways and therefore require no land acquisition or resettlement of residents in any of the twelve areas.

494. The trialling of the three pilot studies for the on-site treatment areas is to be carried out in the Maharagama, Kotte and Kaduwella UC. The Maharagama UC has identified suitable land on which the treatment plant can be located. There are three squatter families occupying the land who claim to be in the process of obtaining the land from the UC. A resettlement plan has been prepared to ensure equitable relocation of the people. For the Kaduwella pilot the septic tanks will be located within the boundaries of the three public toilet blocks and no land acquisition or compensation will be required.

495. Although the detailed design of the two simplified systems has not been carried out it is anticipated that the laying of the small bore sewer pipelines will be within the existing roadways or road margins. Access to private property will only be required to make the household connection to the main system.

496. Sludge from the septic tanks will be collected in the same way that it is already collected and disposed of at the same landfill site. No additional land will be required for disposal of the solids. Some settled solids will be formed within the two treatment plants and these will be disposed of similarly at a landfill site.

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15. Public Awareness Campaign

497. The key objective of the Public Awareness Campaign will be to ensure that the public within the Greater Colombo area generally and specifically within the under served and on-site areas and potentially across Sri Lanka, understands and appreciates:

(i) The linkage between good sanitation, hygiene and health;

(ii) The hidden costs of not having good sanitation in terms of their incurred medical costs and lost time, as well as the cost in terms of doctors and clinical facilities of the additional burden on the public medical services;

(ii) The true costs in the operation and maintenance of a wastewater collection and disposal system and, therefore, the need for a realistic wastewater service charge, adequate to meet the costs of operating and maintaining the service, but within limits of affordability.

498. Secondary objectives will be:

(i) To create awareness within Greater Colombo of the GCWP: its objectives, work content, funding project period etc;

(ii) To obtain full public, Local Authorities and other stakeholder participation within the planning implementation and monitoring process of GCWP;

(iii) To inform the public of the roles and responsibilities of the NWSDB as wastewater asset owner and of the CMC and the DMMC unit as operators;

(iv) To inform the public of the telephone numbers and other ways to contact the NWSDB as the first point of public contact;

(v) To ensure that the public are aware of the resettlement compliance measures included within the project;

(vi) To increase the public’s perception of the importance of the environment – its care and protection – and to be aware of the wider consequences of its abuse, such as on tourism and thus jobs and community prosperity.

499. The wider Public Awareness Campaign will be driven by the NWSDB and community orientated Public Awareness Campaign by the local authorities.

500. The campaign will be implemented:

(i) Wider public awareness campaign:

(a) Across Colombo for non-site specific issues;

(b) Within close proximity to each construction site for issues associated with construction works e.g. resettlement;

(ii) Community orientated campaign:

(a) Within each of the underserved areas to be provided with first time sewerage within the project;

(b) Each of the three pilot on-site areas.

501. The Public Awareness Campaign can be delivered through mass media, press conferences, newspaper articles, sign boards, exhibits, posters etc. If required, for site specific activities

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newspaper advertisements of the “We apologise…..” type can be used which will include a description of the works and benefits.

502. The following is a selection of popular media which are available for the dissemination of information and for receiving feed back from target community oriented Public Awareness Campaign:

(i) Workshops for: (a) Local authority officers and Divisional Secretaries; (b) Community leaders, volunteer workers, CBO leaders, civil organization leaders etc.; (ii) Presentation at meetings of: (a) Public and civil organizations; (b) Professional clubs and similar groups of informed and interested peoples; (c) Children and youth participatory action groups; (d) Community focus groups at individual site level; (iii) Public awareness posters and leaflets: (a) Posted in Government offices, local government offices, PHI office, hospitals, clinics, schools, preschools and places of worship, community halls etc; (b) Included in water bills, assessment tax bills and explanations of charges on the back of the bills; (iv) Advertisements in prominent places such as on public transport services;

503. School children are very positive in relaying messages to their parents and, of course, they are tomorrow’s charge payers. Awareness creation programmes in schools are extremely productive in getting the required message across to communities.

504. “Standard” campaign material will be produced for use throughout all geographical areas of the campaign with specific “extra” sheets to be added to brochures and the like relating to any specific local requirements or conditions.

505. The material will need to be printed in the three languages of Sri Lanka.

506. The NWSDB and Local Authorities will first monitor and then assess the effectiveness of the Public Awareness Campaign for

(i) Changes attitude changes towards hygiene, health and sanitation; (ii) Public acceptance of the need for charges and the “value” to them of the charge; (iii) Relative roles of the NWSDB and the CMC and means of contact; (iv) Public perception of the proposed schemes, in particular the benefit to them and to the environment; (v) Effectiveness in making the public aware of the Re-settlement proposals etc.

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16. Environmental

16.1 Introduction

507. Within previous sections of this Volume we have set out the capital works that are proposed, both within the Colombo sewer area and within the on-site areas. Also, within the section on strategy we have discussed the major environmental issue of future treatment of the wastewater.

508. Within this section we provide a resume of the environmental and associated studies.

16.2 Environmental Reporting Required

509. The environmental reporting (Volume 11 of the Final Report) required is as shown in the following table:

Component Requirement Sewered area Environmental Management Plan (both for the rehabilitation of the Colombo sewer IEE system and for first-time sewerage in the under- served areas) Summary IEE On-site areas A separate IEE for each of the three pilot areas

Environmental Assessment (Framework)

510. No major problems are envisaged within any of the assessments which all indicate a clear environmental benefit. As discussed below, there will be some inconvenience to people within the immediate vicinity of the works but necessary mitigation measures will be put in place to minimise the inconvenience caused. Associated Reports that have been produced are:

Within Volume 9: Social and Poverty Analysis. Volume 10: Part A - Re-Settlement Framework; Part B – Re-Settlement Plan for Colombo sewer system area Part C – Re-Settlement Plan for On-Site Areas Part D – Public Awareness Campaign

511. The following paragraphs provide a supplementary background to support the comments made within the various Studies referred to above.

16.3 Environmental Impacts and Mitigation Measures

512. Site visit notes in the form of drawings of pump station layouts, satellite images of the pump stations and surrounding areas, photographs of significant features of the project area and a list of key issues are provided in Volume 11.

513. With the exception of the outfall rehabilitation all of the elements of the project involve civil engineering works in close vicinity to residential or commercial areas. In such cases the principal impacts will be:

(i) Construction noise (ii) Construction site dust (iii) Disruption to traffic

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(iv) Disruption to shopkeepers and street traders.

514. The Colombo sewer system rehabilitation and other works are to be carried out under a Design and Build contract and for that reason specific details of construction techniques and the work schedules will be determined and prepared by the construction contractor and are, consequently, not available.

515. Using our experience of similar works, typical plant utilisation list have been prepared in order to carry out estimates of noise level at adjacent noise sensitive receivers. Lists of typical Powered Mechanical Equipment (PME), their associated noise characteristics, noise levels and the number of units for each activity have been prepared. These are provided in Volume 11.

516. The areas surrounding the construction works areas are topographically complex since they consist of closely spaced buildings adjacent to narrow roads and passages. The modelling of dust dispersion in such complex terrain is not amenable to numerical modelling since wind speeds and directions are significantly affected by the layout of the buildings.

517. Construction works carried out during the rainy season have the potential to give rise to high levels of silt run off which can block pipe and open channel surface water drainage systems giving rise to localised flooding. Specific measures are required in order to prevent such run off from taking place.

518. Mitigation measures for the reduction of impacts due to noise, dust and run off have been prepared in the form of environmental mitigation clauses to be included in the civil engineering contracts. The clauses are included in Volume 11.

519. The environmental mitigation clauses also include measures for management of:

(i) Solid waste (ii) Hazardous waste (iii) Ecology and significant trees (iv) Vibration (v) Hazardous conditions.

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