Kivul Oya Reservoir Project ECBA

Proposed Kivul Oya Reservoir Project
EIA FINAL Report
EXECUTIVE SUMMARY
Proposed project aims to establish the Kivul Oya reservoir by construction of a dam across Kivul Oya,
which is the main tributary of Ma Oya located in the Vavunia District, to provide irrigation water to
cultivate 1,700 ha of new lands and enhance cultivation potential of 700 ha of existing lands. The
lands that will be irrigated are located in both Vavunia and Mullaitivu Districts.
Salient features of the project
The total area of the reservoir is 1589 ha at the full supply level of 37.05 m. above msl with a
capacity of 53.9 MCM at FSL. The main dam of the reservoir will be located very close to the
confluence of Kivul Oya and Ma Oya at the coordinates 195,228 0E and 415,955 0N. The maximum
height of this earthen dam is 18.9 m (62ft) above stream bed level and the length is 4.41 km. This
dam will require 1.4 million m3 of earth work. The dam will have a 6.5 m width roadway on the top.
The raw material for the construction of the dam will be obtained from the area. The spillway, which
will be located on the end of the right bank, has a net width of 35 m. A tower type sluice will be
incorporated on the left bank of the dam to issue water. The reservoir will have one main canal
starting from the left bank sluice. This canal, which is 12.9 km long can carry 5.66 m3 of water per
second. The feeder canal which takes off from 1.43 km is 11.06 km long and will feed Nika Wewa
and Ehatugas Wewa and falls in to Weli Ela. Project will improve Weli Ela anicut and a feeder canal
up to Kiri Ibban Wewa.
The total project cost will be Rs.7062 million. This includes the irrigation infrastructure development
cost of Rs.6, 230.million and environmental mitigation cost of Rs 832 million.
Entire project will be completed within four years. When it is completed and farmers are settled, the
Mahaweli Authority of SriLanka (MASL) will execute a joint operation with Farmer Organizations
(FOs) to maintain the scheme. These FOs will be established with the participation of MASL field
officers. The present farmers under minor tanks will also be absorbed into the system. Number of
beneficiary farmers will be 6000 families. (4372 old and 1626 new)
The reservoir and main canal will be operated by the MASL according to a jointly agreed schedule
with FOs. The distribution canal system will be operated by FOs with MASL supervision.
Justification
The project could be justified due to several reasons. It will contribute to enhance the agricultural
production of the country and thus will contribute for food security to some extent. The other
benefits include the supply of potable water and improving rural infrastructure including the road
network. Due to supply of water, in addition to agriculture, livestock farming in the area will also be
developed. The annual milk production in the area is 4.5 million liters. The net benefit from milk
production is Rs 114 million. This will increase the economic conditions of the local community in the
area, who have suffered for 30 years due to the armed conflict. The education and health facilities
will also be developed in the area. The EIRR of the project is 16.1% and the cost benefit ratio at 10%
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discount rate is 1.62 and at 8% it is 1.93. Therefore, the project is economically viable. Further, the
project will generate about 2,000 employment opportunities in construction and services sector. The
Government policy is to give high priority to the development of the regions in the north and east
affected by the war. Due to these reasons, the project is highly justified.
Existing environment
The project area is located in the low country dry zone within the DL1e Agro-ecological region.
About 90% of this area exist as flat lands. The elevation and topographic relief generally increase
towards inland from the coast line. Rocky headlands, offshore and scattered rocky outcrops are
present in the area. Reservoir bed area is generally flat with isolated hillocks. The project area is
underlain by the rocks of Wanni Complex, which are partly covered with superficial deposits
comprising alluvium and laterite. The general rock types in the surrounding areas are charnockite,
charnockitic gneiss, granitic gneiss, hornblende biotite gneiss, biotite gneiss and Calc gneiss. The
most widespread soil groups in the project area are imperfectly drained reddish brown earth (brown
sub group), low humic glay (LHG) soils and alluvial soils. There are no economically valuable minerals
that could be extracted within the reservoir bed area.
The average temperature in the project area is 25.40C - 30.30C. Low temperatures are recorded
during December, January and February while high temperatures are recorded in July, August and
September. This area receives rainfall from both South-West and North-East monsoons. Around 70%
of the annual rainfall is received during the North-East monsoon which occurs from December to
February. The balance 30% of rain is received from South-West monsoonal rains from May to
September, and the inter-monsoonal rains received during the rest of the year. The project area
consists of a shallow aquifer underlain by a hard rock mass, and in most of the places in the project
area, easily accessible water is limited.
The land use in the project area includes human settlement, paddy lands, coconut lands, dense
forests, open forests, scrublands, streams and reservoirs. The main wetland habitats observed in the
direct impact zone of the project are Kivul Oya and its tributaries and seasonal and perennial tanks.
Establishment of the reservoir will result in the inundation of several perennial and seasonal tanks.
Even though the reservoir inundation area and proposed new irrigable area are covered with forests,
no wildlife reserves, national parks, sanctuaries, elephant corridors or forest reserves are found in
the directly affected area of the project. However, several forest reserves and sanctuaries are found
in areas adjacent to the project.
The major habitats found in the project area are relatively undisturbed dry-mixed evergreen forests,
degraded dry-mixed evergreen forests, scrublands/ abandoned chena and riverine forests on the
banks of streams. Most of the forests in the project area are degraded due to the clearance for
chena cultivation. After abandoning, these lands are colonized by pioneer species such as grasses
and scrub vegetation. The degraded areas are not yet converted back to the closed-canopy forests.
Of the total of 88 plant species recorded in the project area two are nationally threatened and seven
are endemic. Of the 214 animal species recorded, 14 are endemic and one is exotic. Among the
birds, 10 are migratory species. The animal species include four Nationally Threatened species (1
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endangered species and 3 vulnerable species), eight Nationally near Threatened species, four
Globally Threatened (3 endangered species and 1 vulnerable) species and seven globally near
Threatened species. There are some animal movements in the area that will be inundated.
The existing environmental problems include habitat conversion for agriculture, overuse of
agrochemicals, and illegal extraction of timber trees, destructive harvesting of non-timber forest
products and hunting. Human wildlife conflict is also a significant issue due to crop and property
damage as well as death and injury to villagers caused by elephants. Implementation of the project
will result in further loss of habitat for elephants as well as other fauna that can lead to further
aggravation of the human-wildlife conflict.
According to 2013 December statistics, there are 3,203 families in the GN Divisions of the project
area. The total population is 9,285. All of them are Sinhalese. About 0.86% of the population is
Roman Catholics and others are Buddhists. Majority of farmer families in the area do not own lands
with irrigation facilities for paddy cultivation. The re-settlers in Weli Oya have been residing in the
project area since 1983 amidst various difficulties. These people suffer from inadequate water that
hampers their livelihood activities at present.
The main source of income of the community in the project area is agriculture. Although the lands
are available, lack of a reliable source of water limits their agriculture only to the rainy season.
Therefore, people living in the project area have to engage in other income generating activities such
as skilled or unskilled labour and small scale business. Some are employed in the Government sector
private sector, security forces and abroad.
Water supply, sanitation and access roads in the project area are not in a satisfactory level. Public
services such as education, health and housing facilities are also not well developed. Some
Prehistoric sites, Buddhist monastic sites and ceramics of pot-shred sites were identified in the
project area including the inundation area.
Although there are no major environmental and social issues in the area, except for some human-
elephant conflicts, there are some health issues including Chronic Kidney Disease of Unknown
etiology (CKDU).
Environmental impacts and mitigation measures
There are several negative as well as positive impacts of the project. Positive impacts include the
increase in agricultural production, increased livestock production, alleviation of poverty in the area,
improvement to road network and other infrastructure, improving health and educational facilities,
development of aquatic habitats which will enhance inland fish production, increased humidity in
the atmosphere in the area, which may contribute, coupled with other factors to increased rainfall in
the area. The project will also generate employment opportunities for the people in the area
especially during the construction phase. It is estimated that around 2000 employment
opportunities will be created during construction.
The major negative environmental impacts and mitigation measures are summarized in the
following table
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Impact Mitigation measure

Generation of dust during Covering material during transportation in populated areas
transportation of construction Watering gravel roads
material
Soil erosion from cleared lands for Removal of vegetation to be done in steps
agriculture Avoid felling of large trees as much as possible
Farmer training before commencing on-farm development.
Educate farmers to practice on-farm water management.
Soil erosion from clearing lands Terracing of land and formation of drainage ditches to drain
for construction of dam and canals out excess water.
Soil erosion from livestock farming Launch an effective livestock programme and minimize open
grazing.
Siltation of river and streams Construct silt traps (small dams) across potential drainage
paths, which carry soil particles and monitor regularly.
Disposal of waste from home Training programmes to motivate settlers on household
gardens waste and garden waste management.
Water logging and salinity Identify natural drainage paths in the design and layout of
farms.
Avoid dumping of debris in the drainage canals.
Precision land leveling and grading.
Construct on farm drains to collect excess water
Water pollution due to machinery Salvage reusable and recyclable waste and dispose for reuse.
and worker camps Waste oil etc. should be collected and disposed to recycling
plants
Solid waste must be disposed as instructed by provincial
authorities
Drying up of reservoir below the Maintaining the environmental flow
dam affecting wildlife and humans
Loss of forest and wildlife habitats Enrichment with indigenous forest plants along 100 m wide
buffer area around the FSL of the reservoir.
Enrichment of riverine forest along Ma Oya.
Enrichment of degraded forest in identified areas such as

tank catchments in the command area and proposed
elephant corridor
Tree planting along roads, irrigation canals, borrow areas
and labour camps.
Human elephant conflict Erection of electric fence to separate proposed elephant
corridor from the command area.
Establish and endowment fund to maintain the fence.
Make arrangements to maintain the fence by local
community.
Relocation of community and Compensation package for property and livelihood loss.
property loss New irrigable lands in new irrigable area.
Awareness on soil conservation, rainwater harvesting.
Archaeological sites Dismantle and restore ancient monastery at Wediwettukallu
in proposed elephant corridor (no 7 in Table 3-26)
Preserve ancient anicut (Wannadi palama)
Declare several archeologically important sites as reserves
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Monitoring Programme
Monitoring of project activities should be done by an internal monitoring committee consisting of

the officers of the MASL appointed by the Project Director and an external monitoring committee.
The external monitoring committees should consist of officers from MASL, Department of Wildlife
Conservation, Department of Forest, Department of Archaeology, Divisional Secretary’s office,
Pradeshiya Sabha and Central Environment Authority and Representatives of Farmer Organizations.
The internal monitoring committee should keep records of all monitoring activities to be examined
by the external monitoring committee.
Conclusion and Recommendation
The project will result in the loss of approximately 2500 ha of terrestrial habitats mainly consisting of
forests and scublands. Many species of plants and animals, including some endemic and threatened
species live in these habitats. However, these animals and plants are not confined to this area and
are found in other regions of the dry zone of Sri Lanka. Further, the project will create new aquatic
habitats, which can be utilized by aquatic animals and plants, some of which are of economic value.
The project will provide irrigation water to cultivate 1,700 ha of new land both in the Yala and Maha
seasons. Further, 700 ha of existing rainfed agricultural lands, which are cultivated only during the
Maha season will now be cultivated during the Yala season as well. This will enhance the agricultural
production of the country as well as the local economy. Further, project will enhance livestock
production in the area too. In addition this project will provide drinking water to around 50,000
persons in the project area.
The positive impacts outnumber the negative impacts. Therefore, it is recommended to carry out the
project with the mitigation measures suggested.
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CHAPTER 1
1. INTRODUCTION
The project area lies in the system L of Mahaweli Ganga Development Programme in Vavunia and
Mullaitivu Districts. Rivers in this region are seasonal, and therefore, the use of water from these
non-perennial rivers cannot meet the irrigation demand in the area. As such, the inevitable
alternative is to store water during the rainy season and use them in the dry period. In order to find
a solution to alleviate poverty and other problems faced by the population living in this area, several
sites were identified to construct a reservoir. Each site was investigated by the Irrigation Department
(ID) and the proposed location was chosen, in the Kivul Oya basin for the construction of a reservoir
as it is the technically most feasible site.
The proposed Kivul Oya Reservoir Project would harness water of Kivul Oya, which is one of the main
tributaries of Ma Oya, which originates from East Vavunia and runs into Kokkilai lagoon in Mullaittivu
District. The proposed reservoir will be located in the Vavunia District while the irrigable area of the
reservoir will lie in both Vavunia and Mullaittivu Districts. It is intended to utilize in-basin water
resources as the water balance studies revealed that additional water from Mahaweli is unlikely.
Water in Kivul Oya is untapped yet and, it is proposed to harness these waters by constructing Kivul
Oya Reservoir across Kivul Oya.
Since the development in the target area was minimal during the last 30 years due to terrorist
activities, the living standard of the inhabitants is far below the average conditions compared to
other areas of the country. This project has been identified as a priority project by the Central
Government as it will result in the development of one of the war affected areas. The cost of
irrigation infrastructure development is Rs. 6230 million and this project will be funded by the
Government of Sri Lanka.
1.1 Background of the Project
At present the major irrigation scheme in the Ma Oya basin is Padaviya Irrigation scheme, which is
located upstream of the confluence between Kivul Oya and Ma Oya. Padaviya scheme irrigates lands
on the right bank of Ma Oya while Kivul Oya is a stream located on the left bank of Ma Oya. There is
no major irrigation scheme on the left bank of Ma Oya other than few village tanks, which provide
irrigation water only during the Maha season. Thus the population in this area lives with a relatively
poor living standard compared to their counterparts living in major irrigation areas.
The Padaviya scheme was developed in 1950. In fact, Padaviya wewa was originally constructed by
King Mahasen in 535-555 AD. This tank has been enlarged by King Parakramabahu in 1153-1186 AD.
This area was designated as system L of the Mahaweli Ganga Development Programme in the
master plan prepared during 1964-68 with the assistance of UNDP/FAO. It had been proposed to
divert water through the North Central Province Canal (NCP canal) conveying water from
Moragahakanda Reservoir to develop this area and several other selected areas further north of this
area. Although, Moragahakanda reservoir is being constructed, now the water development
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potential from NCP canal is limited than that was anticipated in the UNDP/FAO master plan. As such,
the Ministry of Irrigation & Water Resources Management (MI&WRM) has decided to exploit in-
basin water for the development in the area in addition to possible diversion form Mahaweli basin
through NCP canal. System L area includes seven major river basins including Ma Oya basin which is
the largest basin in the area. Proposed Kivul Oya reservoir will be the second largest major reservoir
after the Padaviya Scheme constructed in 1950s.
The Kivul Oya reservoir project envisages construction of Kivul Oya Reservoir across Kivul Oya and
construction of 12.9 km long main canal to irrigate 1700 ha of new lands on left bank of Ma Oya and
right bank of Chooriyan Aru (Weli Oya). In Addition, it is proposed to construct a feeder canal
starting from above the main canal to augment 700 ha of existing lands irrigated under Nika Wewa,
Ehatugas Wewa, Kiri Ibban Wewa, Helembe Wewa and paddy areas under existing weirs across Weli
Oya.
1.2 Objectives and Justification of the proposed project
1.2.1 Objectives
The target area of the project is a part of system L area of the Mahaweli Ganga Development plan.
The system L has been gazetted in two occasions, i.e., in 1988 and 2007 as a special area. The
Mahaweli Authority of Sri Lanka (MASL) has carried out some development work in the area even
during the period of conflict in the northern region of Sri Lanka. With the cessation of the war the
need to develop the area has become a priority. Water of Kivul Oya is untapped and therefore,
MI&WRM has proposed Kivul Oya reservoir and an irrigation system based on the reservoir.
The living standard of the inhabitants in this area is relatively poor compared to that of the
inhabitants in other irrigation areas of the country. Land use surveys conducted in the area by the
MI&WRM reveal that the soils in the project area are suitable for wetland rice during major rainy
season and upland crops during minor rainy season. There is a good potential in this area for
agricultural development under irrigation.
Therefore the objectives of this project are;
I. To construct the Kivul Oya reservoir and provide irrigation facilities to 1,700 ha of new
lands and 700 ha of existing lands under village tanks in Mullaitivu and Vavunia Districts.
All 1,700 ha of new lands will be cultivated with paddy during Maha season and 1,255 ha of
those will be cultivated with Other Field Crops (OFC) during the Yala. Existing 700 ha of
lands, which are cultivated only in Maha season, will now receive water for Yala season
cultivation too thus increasing the cropping intensity (CI) to 2.0. Settlers under the existing
tanks will continue in their lands and receive assured irrigation water for both cultivation
seasons while new settlers will be settled in 1,700 ha of new lands.
II. To provide safe potable water to the people of the area. This is envisaged because the
ground water in the area where the reservoir is constructed is not polluted with agro-
chemicals and the surface water that will be collected is rain water and storm water from
the watershed of Kivul Oya, most of which is covered with forests.

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1.2.2 Justification
Although location and physical setting of Sampath Nuwara Area {Figure 2.1(A)} is ideally suited for
agriculture and livestock development it is obvious that available land, water and human resources
are not potentially utilized for the betterment of the people. In order to change this status, state
intervention on large scale investment to improve the living standards of the people of this area is
required. As more than 70% of the people of the area are engaged in agriculture, it is rather
equitable to invest on water resources and other infrastructure development by the state, so that
benefits of the investment will flow to a larger group of people. The most important factor for the
agricultural production in the area is the availability of water especially during dry (Yala) season.
Under existing small tanks in the proposed target area the cropping intensity is 1.0 as only the Maha
season is cultivated. With the implementation of the proposed project, 700 ha of rainfed lands could
be cultivated during the Yala season too, thus increasing the cropping intensity to 2. In addition
1,700 ha of new lands would also be cultivated during Maha and 1255 ha in Yala season. This will
enhance the agricultural production of the country.
Other main justification is that the project will provide safe potable water for the people in the area
as the water in the reservoir site is not polluted by agro-chemicals as most of the area that would be
inundated and its catchment is not used for agriculture. The surface water collected in the reservoir
also will be rainwater and storm water from the watershed of Kivul Oya, which is covered with
forests. Further the reservoir will also enhance the water availability for the wildlife as well.
Kivul Oya Reservoir Project will generate benefits to Sri Lankan economy in general by way of
increased agricultural production and employment generation through irrigation and development
of other infrastructure and services such as livestock development and drinking water supply.
Above developments would improve the general living standards of the beneficiaries. However, the
economic quantification of these is difficult. This area was severely affected during the armed
conflict which lasted for 3 decades. Many villagers that had fled the area due to lack of security
during the conflict period have now returned or are returning to their lands. As a result, these
communities need the support of the government to develop their livelihoods. Thus the
Government has given high priority to develop the livelihoods of this community.
The project is technically viable and economically justified as the benefit cost ratio at 10% discount
ratio is 1.59 and the IRR is 16.43%, as per the feasibility report.
Due to above reasons, the construction of Kivul Oya reservoir is justified provided that proper
measures are taken to mitigate adverse environmental impacts.
1.3 Objectives of EIA Report
Environmental impact assessment (EIA) for the proposed project is carried out to fulfill the
requirements under the National Environment Act No 47 of 1980, and subsequent amendments to
fulfill the following objectives.
i). Identify and evaluate the potential environmental impacts that will arise due to the
proposed interventions.

EIA FINAL Report
ii). Recommend appropriate mitigation measures to avoid, minimize, remedy or

compensate for the predicted negative impacts.
iii). Assess environmental costs that can be estimated and included in the economic
analysis, benefit cost analysis, IRR/ERR evaluation and sensitivity analysis.
iv). Provide a site-specific Environmental Monitoring Programme that will give adequate
project options in terms of mitigation measures, project alternatives and a monitoring
plan to achieve overall environmental sustainability of the project.
v). Provide an environmental management plan to achieve overall environmental

sustainability of the project.
vi). Analyze and discuss any alterations to the approved project as per the TOR.
1.4 Methodologies and technologies adopted in EIA report preparation
The EIA was conducted as per the Terms of Reference (TOR) provided by Central Environmental
Authority. In compliance with the TOR, the consultants covered all relevant aspects identified
therein through scoping sessions, field investigations and collection of secondary data as described
below.
After identification of impacts the impact matrix was prepared to identify significant impacts.
1.4.1 Literature Review and Preparation of Maps
Prior to the commencement of project activities all available information on this project were
collected. 1: 50,000 maps and other available engineering survey maps were perused to study the
project area. A map of the project area has been prepared using all available digital and printed data.
1.4.2. Hydrology, geology, irrigation related aspects, and civil works
a) Hydrology
The details of the methodology used were as follows
i. Reviewed the available reports on the feasibility studies carried out for the project, reports on
land use and water balance studies related to project and the reports on hydrology in the
project area.
ii. Assessed the adequacy of the hydrological studies carried out for the project with regard to the
existing water resources system, current and proposed storages/reservoirs, diversion patterns
in terms of quantity, space and time.
iii. Accepted norms and environmental flow requirements including the provision of passage for
natural streams through available secondary data and field surveys.
iv. Studied the historical records of Floods through available secondary data.
v. Studied the water management proposals within the project and, through available secondary
information.

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vi. Study of the groundwater conditions through field surveys and already available reports.
vii. Studied the existing water uses and user rights through field surveys.
Based on the above, the impacts on the current hydrology of the project area were identified.
Mitigation measures for identified adverse impacts were formulated. Hydrological maps showing the
streams, water bodies, rainfall stations land use etc. were prepared.
(b) Geology
Geological investigations carried out under the project included water pressure tests, and studying
geological logging, soil data using available geological maps, topographical maps and other available
geological reports. Using the available data, an assessment of rock quality, permeability and slope
stability was also made. The details of methodology were as follows:
i. Studied the detailed geological map for the study area (scale 1:50,000).
ii. Scrutinized Geological conditions at key locations by field surveys.
iii. Studied the weak zones that are already identified through field surveys.
iv. Suitable drilling locations were recommended based on studies.
v. Identification of special geological conditions, including conditions affecting slope stability

and/or groundwater table, which will impact the environment due to project interventions by
field surveys.
vi. Identified the areas where soil erosion could take place due to project interventions by field
surveys.
vii. Studied the recommended blasting methods and identifying the impacts.
Based on these, adverse impacts were identified and mitigation measures were formulated.
(c) Irrigation Aspects
Current irrigation practices in the area, existing irrigation systems including minor systems, proposed
canal and design assumptions, design criteria and adopted parameters and efficiency of conveyance
were studied using available reports and field surveys. The details of the methodology used were as
follows:
i. Preparation of a map showing the irrigation infrastructures in the area and the proposed
reservoir and conveyance system with irrigation structures using field surveys and GIS.
ii. Analyzed arrangements for future maintenance of developed infrastructure.
iii. Evaluated design assumptions, design criteria and conveyance efficiency.

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iv. Evaluated proposed reservoir/canal operations and their compatibility with measures to
mitigate impacts on fauna and flora through scoping meetings with consultants.
v. Studies were carried out to determine whether modifications to the designs are required to
minimize the impact on the environment, and recommendations were made accordingly.
vi. Assessed interactions/interdependence of project components within them and among other
irrigation developments of the area and impacts on the current irrigation users.
Based on the above analysis, recommendations to improve irrigation efficiency and optimize water
use, augment water supply to current users including those benefitted by cascade systems of the
area with reference to the water balance were made and, mitigation measures for any adverse
impact on the environment from modified irrigation patterns were formulated.
(d) Civil Engineering /Infrastructure
The construction methodology of all the infrastructural developments were studied and, their
impacts on the environment were identified, and measures for mitigation of the impacts were
proposed. Need for service roads during the operation and maintenance phase, possibility of using
the existing roads for construction and O&M activities were also investigated. The details of the
methodology used are as follows:
i. Locations of proposed major infrastructure, existing access roads, proposed additional accesses,
proposed service roads during the O&M phase were identified by field surveys and using 1:
50,000 maps, GIS data and field surveys
ii. Borrow areas, quarry sites, material storage sites, camp sites and service facilities for the
machinery were identified using field surveys and a map was prepared.
iii. Current settlements and resettlement sites, including towns, roads and other rural
infrastructure were identified through field surveys.
iv. Infrastructure requirement for resettlement were assessed through field surveys and
discussions with community leaders and government officers of the area.
v. Construction material requirements, quantity of excavated material and possibility of re-use,

and proposed disposal methods of excavated material and other waste were assessed using
past experience and knowledge.
Based on the above, impacts from construction activities including any alterations to existing
infrastructure identified and suitable mitigation measures were formulated.
Study area for the physical and biological environment was considered as the inundation area and
area of 1Km from the project area boundary including the command area. Existing environment
relevant to other aspects are indicated under Section 3.3 Social and Cultural Environment

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1.4.3 Biological Environment
Flora
Major habitats/vegetation formations, populations and communities of flora (terrestrial and aquatic)
in the project area as well as the areas indirectly affected by the project activities (e.g. quarries,
refuse disposal areas, work camps, temporary access roads, etc.) were identified by field surveys.
In November 2013, a reconnaissance survey was done to identify major habitats/vegetation

followed by a detailed survey in different habitats in the project area to prepare a species inventory,
to record endemic and endangered flora and to identify possible ecological impacts due to the
proposed project activities and existing environmental problems/issues within the proposed project
area and vague surroundings of the project area.
The observed flora species were identified based on published descriptions and taxonomic keys
provided by Dassanayake and Fosberg (1980 - 1991); Dassanayake, Fosberg and Clayton (1994 -
1995); Dassanayake and Clayton (1996 - 2000); and Dassanayake, Clayton and Shaffer-Fehre (2006).
The conservation status of the species was recorded according to The National Red List 2012 of Sri
Lanka (MOE, 2012). Nomenclature of flowering plant was based on Revised Handbook to the Flora of
Ceylon Volumes I-XV.
Plant species found in all habitats along the proposed canal was recorded by walking along transects
to get a rapid assessment of the plant diversity. In addition, several transects were marked in
representative habitats and 5x100 m plots/quadrants were demarcated to enumerate plant
communities. Available land use maps (1:50,000 and 1:10,000 depending on the availability) were
used as the base maps for the study.
All vascular plant species were recorded on plot-by-plot basis (10 m x 5 m) within every quadrant
(100 m x 5 m) of a transect. The number, estimated height (with the exception of climbers) and DBH
(Diameter at Breast Height) of individuals exceeding 5 cm DBH were also recorded. When felling of
trees is required for project activities, a list of species where DBH is >30 cm was prepared.
Herbaceous species within a quadrate were recorded as present but individuals were not counted.
The presence of additional species encountered along the transect, between quadrants, were
recorded separately. Specimens of unidentifiable, previously unrecorded or otherwise notable
species were collected, photographed and deposited in the Herbarium of the University of Sri
Jayawardenepura.
Anticipated impacts on habitats, and populations and communities of plants due to the project
interventions, especially on ecologically sensitive habitats, endemic and threatened plant species
were studied and possible mitigation actions were proposed.
Fauna
Detailed field investigations were carried out at 22 sites in the proposed project area based on the
findings of a reconnaissance survey, land use maps and satellite images of the study area. A total of
12 sites were sampled within the reservoir bed and 10 sites within the command area.

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Point counts and short transects (0.5 to 1 km) are the two main sampling methods used at each of
the identified sampling sites. In addition, opportunistic observations were also made and used in the
construction of the species inventory. All the species observed were recorded with respect to its
location and the results were pooled according to the habitat. The current status of the ecosystem
with respect to disturbance by humans and the existing threats were also recorded. Possible
ecological impacts and existing environmental problems/ issues within the proposed project area
and outside of the project area were documented. In addition, secondary information on
biodiversity and environmental issues were collected through personal communication with villagers
and relevant officers. This was also done by reviewing published documents and unpublished data.
In addition, photographic records were made of the visual aspects of biodiversity.
Both direct observations as well as verifiable indirect observations such as nests, droppings,
footprints and calls were recorded. When direct observation was possible the identity and number
of individuals were recorded. Location of each sampling point was geo-referenced.
Aquatic fauna was surveyed using various sampling gear such as cast nets, fine meshed drag nets,
hand nets and scoop nets. Furthermore, interviews were conducted with the fishermen in the area
in order to collect information on the species present. Aquatic amphibians and reptiles were
recorded by direct observations.
Identification of fauna were based on D’abrera (1998), Fonseka (1998), Pethiyagoda (1991), Dutta
and Manamendra-Arachchi, (1996), De Silva (1996); Pethiyagoda & Manamendra-Arachchi, (1998),
Inskipp et al (1996), and Corbet & Hill (1992).
The conservation status of the species was determined according to MOE (2012). The endemism,
potential to become nuisance species such as weeds and invasive species and commercial
importance were determined based on the published information on these species.
Habitats and ecological status
Habitats needing special attention by the project including any areas beyond the project sites, where
there is potential for significant environmental impacts were identified based on the following;
- Endemic/threatened or other species requiring special attention
- Problems of Invasive Alien Species including locations needing special attention by the project
1.4.4 Socio-economic aspects
The sociological surveys were carried out in the following areas as defined by TOR;
1. Project sites
2. Areas beyond project sites, where there is potential for environment impacts by the
construction or subsequent operations.
3. Locations affected by the constructions and development activities.

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Following specific information were collected using primary and secondary data as per the given TOR
during the surveys;
a. Population characteristics, settlements, present water supply and water uses including
existing irrigation schemes
b. Distribution of income and sources, goods and services
c. Existing health and infrastructure facilities
d. Existing environmental/social/health issues in the area
A reconnaissance survey followed by a household questionnaire survey was conducted targeting 38

households living within the inundation area and within 100 m indirect impact area from the
proposed FSL. The information from the rest of the project areas was obtained using the available
secondary information.
Based on the field surveys, impacts on present and future water users and limitations in sharing
water and related issues specially in the basin, impacts due to development of new lands for
agricultural purposes, effects on existing and proposed settlements of the area, impacts due to
relocation of communities and loss of property including agricultural lands were identified and
measures to mitigate the negative impacts and enhance the positive impacts were proposed.
An environmental monitoring programme to ensure the effectiveness of the social impact mitigation
process was also proposed.
1.4.5 Archeological aspects
Archaeological analysis of the area was carried out by literature surveys and studying old records in
the museums, folk stories, maps, plans, aerial photographs and field surveys.
Field walking was carried out in the entire project area and archaeologically important sites were
identified. The impacts on archaeological sites due to the project were identified and
remedial measures were recommended.
1.4.6 Agronomic Aspects
Following information in the project area were collected from the field surveys and reports available
at MASL field level offices; Unit manager’s office, Block manager’s office and RPM office and at
Grama Niladhari Offices, Divisional Secretariats and District Secretariat, and from discussions with
relevant officers.
a. General demographic data at Grama Niladari (GN) level, Divisional Secretary’s (DS) level and
District level
b. Population practicing farming (agriculture and livestock) as a livelihood in the affected area at
GN level, Agrarian Services Centre (ASC) level, Agriculture Instructor (AI) range, Livestock
Development Instructor (LDI) range;

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c. The extents of cultivation, both under irrigation and rain fed; Crops cultivated and productivity;
Cropping intensities and vulnerability to droughts and floods;
d. Number of livestock, production, productivity;
e. Estimated annual income from farming
The following data were collected from existing reports available at the relevant government
institutions to assess the farming potential of the affected area and the area where the beneficiaries
to be resettled.
a. Rainfall and evaporation data to assess agro-ecological status.
b. Soil characteristics and drainage qualities to assess soil suitability for agriculture.
c. Data on irrigation potential.
d. Data on support services – seed, fertilizer, agricultural and livestock extension, insurance,
markets
e. Data on supporting infra-structure – roads, service buildings, electricity, drinking water,

communication and market intelligence
Based on these data, the alternatives proposed for re-settlers and the effects on the community
downstream that will be benefitted by the project implementation were assessed.
1.4.7 Mitigation measures and environmental management plan
Mitigation measures were identified through scoping meetings of the consultants. In this regard,
economic viability and social acceptance of mitigation measures were also considered. Effectiveness
of proposed mitigation measures (with respect to Sri Lankan standards where applicable) was also
analyzed. An Environmental Management Plan to implement mitigation measures, which include
the following was also developed through scoping sessions.
 Overall management requirements for biodiversity, ecological resources, environmental

pollution
 Special management programmes for selected faunal and floral species (threatened flora and
fauna habitats, elephants, endemic and other valued fish species, other mammals of
importance) and habitats under threat of importance for fauna
 Management plan for alien invasive species (flora and fauna)
 Suggested areas for conservation by Forest Department and the Department of Wildlife
Conservation.
 Water supply to people adversely affected by the project

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Aspects such as soil conservation, solid waste management, management of construction activities
such as quarrying, road construction, dumping of rubble and construction waste, blasting, water and
air pollution were given special attention
Safeguards were identified through scoping sessions of the consultants and included in the project
design to prevent or minimize adverse impacts especially during construction and operation period.
Opportunities for natural resource management and maximizing benefits to human communities
were also identified and highlighted in project design and operation.
1.5 Government policy regarding the Project
One of the priorities of the government is to implement a number of new projects to provide water
for agriculture and other water uses. Among them, Gin/Nilwala Diversion Project, System B (Maduru
Oya) RB Development Project, Malwathu Oya Diversion Project, System L (Weli Oya) Development
Project and Construction of the NCP Canal are given high priority. This project is a part of in-basin
development for system L and, as such government policy is very clear.
The MASL has taken action to settle families in this area since 1983. A total of 3,100 families were
settled in the left bank of Ma Oya in Weli Oya area. Some of these families left their lands during the
north east conflict, but now they have returned to their lands. Land problem of 2 nd and 3rd
generation families is also a considerable issue to the government. As such, now the government is
faced with the problem of developing livelihoods for those who have come back and also the
population who remained during the period of war. There is good potential for an agriculture based
livelihood development project in the area, when land and water resources are concerned.
The government has already recognized the need to develop this area under System L of Mahaweli
Ganga Development Plan. It was proposed to supply water through NCP canal under the original
plan. However, according to recent water balance studies, it has been realized that water availability
from Moragahakanda reservoir complex is not be sufficient to meet water demand required for the
development of the anticipated area. Therefore, the water resources planners have to depend on in-
basin water resources development rather than trans-basin water transfers. The government has
agreed to this policy of in-basin water resources development.
1.6 Conditions laid down by state agencies in granting preliminary clearance for the project.
There are no conditions laid down by state agencies for the project. The main agencies involved in
the project are Mahaweli Authority of Sri Lanka, Department of Wildlife Conservation, Forest
Department, Archeology Department and respective Divisional Secretaries.
The Department of Wildlife has expressed its concern on the movement of wild elephants and other
wild animals. In order to accommodate this requirement the project planners have set aside an
elephant corridor just downstream of the main dam.

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Approvals from the following government agencies are needed for the project.
No Agency Approval
1 Central Environmental Authority Environment approval for the project
2 Archeological Department Approval for constructions in
archaeologically important sites
3 Department of Wild life Conservation Approval for the project in wildlife area
4 Forest Department Conditional approval given (see note below)
5 Department of National Planning Approval for the project construction
6 Respective Predeshiya Sabhas Concurrence
7 Geological Surveys and Mines Bureau License for sand and rock quarries
Note: A meeting was held between the Secretary, Ministry of Mahaweli Development and
Environment and the Forest Department on 11.03.2019 regarding the use of land under the
management of Forest Department for the proposed project. At this meeting forest department has
given its consent for the use of lands under the management of the Forest Department subjected to
obtaining environmental clearance for the said project from the Central Environmental Authority
and with minimal damage to forest and the environment (Please see attached letter in Annexure V).
1.7 Conformity with other development plans in the area.
The project was explained to key officials of the area. There are no development projects planned in
the project area which will intercept with the development proposals of this project. At present,
lands are cultivated only during the Maha season, as the existing minor tanks do not have sufficient
water for Yala cultivation. As such, people in the project area have high hopes for this development
project.

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CHAPTER 6
6. EXTENDED COST BENEFIT ANALYSIS
The primary objective of the present analysis is to describe and evaluate the economic impacts
arising from implementing the Kivul Oya reservoir project. It seeks to evaluate the benefits and costs
accruing from the project in financial and economic terms based on current prices.
6.1 Project Configuration
The configuration of the project under consideration is:
 Construction of the main dam, spillway, coffer dam and diversion canal, main and feeder
canals and associated structures.
 Construction of secondary and tertiary canal system.
 Rehabilitation of Existing Tank System.
 Improvements to main road System and internal road System in the area
 Providing drinking water for about 10,000 families of the area
 Livestock development
 Improvements to Health and educational facilities
 Institutional development
6.2 Overall approach to the Economic analysis
The project configuration was realized through a progressive screening of alternatives for various
project components. This screening and subsequent optimization had been conducted on the basis
of economic criteria, such as the expected return on investment. The evaluation was concentrated
mainly upon the irrigation benefits; however, there are a number of auxiliary benefits such as
providing drinking and domestic water for users and industrial purposes. In this context it should be
noted that the economic analysis submitted in this part has been carried out with consideration of
the situation as it would be without the project as well as with the project. The benefits were taken
in to account excluding the revenue without project scenario or existing cultivation.
6.3 Basic Assumptions
1. In accordance with generally accepted practices the life span of the project is considered to
be 30 years.
2. In consideration of the changes to the developments in agriculture; the yield is assumed to
demonstrate an increase by up to 5.5 MT per hectare; the amount which is currently
obtained in Mahaweli System.
3. The cropping intensity in existing agricultural lands is expected to demonstrate an increase
from 0.0 to 0.74 in the Yala season.
4. The cropping intensity in new agricultural lands is expected to demonstrate an increase from
0.0 to 1.0 in the Maha season and from 0.0 to 0.8 in the Yala season.

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5. During the period of the project there will be no changes or improvements to the existing
agricultural patterns in the Maha season; but in the Yala season, 0.8 of the cultivation will be
Other Field Crops (OFC) due to improvements in the farming systems and water
management. The selection criteria of the OFCs are very popular among the farming
communities.
This increase is justified, as the main objective of the project is to provide irrigation water to
cultivate 700 ha that is not cultivated in the Yala season due to the lack of water. Further, 1700 ha
are allocated for OFC in newly developed left bank of Ma Oya and right bank of Chooriyan Aru
(WeliOya). The identified crops are paddy, green gram, black gram, big onion, red onion and chilies.
There are a number of secondary impacts relating to improvements of environment and socio-
economic conditions but these could not be quantified in physical or monetary terms. Providing
water for industries, drinking water for community, fishing income, impacts due to provision of
infrastructures etc., can be cited as examples.
6.4 Methodology
The financial and economic viability has been judged on the basis of three separate criteria;
1. Internal Rate of Return (Financial and Economic)

2. Net Present Value (NPV)
3. Benefit – Cost Ratio
The costs and benefits have been converted from financial terms to economic terms. Significantly,
the financial crop budgets are converted to economic terms since the financial prices of inputs and
outputs are distorted due to subsidies and taxes. Nevertheless, a large subsidy is given for fertilizers
and this subsidiy is reduced from the fertilizer inputs.
Rice is valued at parity price as it continues to be imported. A standard conversion factor of 0.9 and a
shadow wage rate 0.7 along with respective conversion factors for other inputs and outputs were
applied along with the value added to assess the due economic benefit.
The value of labour was not used as a cost but was added to the outputs. Residual values of the
assets for a balance period are considered as a benefit. Conversion factors for tradable goods refer
to a border process based on the import or export parity. Fertilizers and agro chemicals are currently
being imported and have been valued at the import parity price. Customs tariffs and fees are quoted
from the latest available sources. Other rates have been taken from various sources and through
discussions with professionals or have been estimated based on the information collected.
6.5 Project Cost
The total investment cost for the Kivul Oya Reservoir Project including environment mitigation cost
is estimated to be Rs. 7059 million. Investment costs are determined by the structural and

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operational requirements to the objective of the project. The details of the structural requirements
and costs have been discussed in the main report.
The cost is expressed in financial terms at the 2013 price level and includes costs of construction,
physical contingencies, engineering, administration & supervision and settler assistance.
The total investment cost breakdown of the project is as follows.

Table 6-1 Investment cost
Cost Item Rs. Mn.

Civil Cost
1 Access roads 50.35
2 Dam construction 3239.92
3 Spill way construction 874.15
4 Sluice construction 69.95
5 Buildings construction 64.50
6 Office equipment purchase (vehicles, water 263.50
bowsers, machines, generators etc.)
7 Construction of irrigation canal system 1479.72
8 Livestock Development Program 185.08
Subtotal – civil cost 6227.17
Mitigation Cost
9 Reforestation 720.00
10 Elephant fence 100.00
11 Resettlement cost 6.00
12 Dismantling and restoring of ancient monastery 1.00
13 Training of farmers 3.00
14 Sediment traps 2.00
Subtotal – Mitigation cost 832.00
Grand total 7059.17
6.5.1 Resettlement Costs
Sixteen families will need to be resettled. Currently, these people do not hold deeds or permits to
the property, since they live in state owned lands. These people will be given 1.5 acres of cultivation
lands and 0.5 acres of residential lands upon relocation by MASL. The resettlements costs will also
involve the provision of compensation for land development, costs of transportation, costs for
income restoration and a six-month food assistance plan until the resettlers are settled into their
new locations. The total cost of resettlement will be 6 million. Some families who were removed
during the conflict period are returning. For these settlers, facilities will be provided by the
government. In addition, the project will carry out the irrigation infrastructure development as well
as developments to the social infrastructure (area center, village centers) including settler transport
and food assistance.

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6.5.2 Maintenance costs
The maintaining of the assets during the period of use is essential. Assets for which the economic life
expires during the life time of the project will be replaced during the implementation period in order
to guarantee continuous operation. The economic life time of the civil structures (canals) are
assumed to be 40-50 years. Taking in to account the still usable proportion of such assets as a
residual value, 20% of the initial costs has been added to the 30th year as a benefit. 0.05% of the
total cost has been included as the annual maintenance cost during the project period. The
maintenance costs will be increased by 2% annually. The field canal maintenance should be carried
out by the farmer organizations.
6.5.3 Reforestation
The proposed project will have a significant negative impact on natural habitats due to the
inundation and land clearing in the command area, resulting in an overall loss of approximately
2500ha. Reforestation of 1000ha in extent is proposed as a compensation measure for the estimated
loss. The cost allocation for reforestation is Rs. 400 million. In addition, enrichment planting of
riverine forest, scrublands, tank catchments and planting along access roads etc. will be undertaken
under the project covering an estimated extent of 800ha at a cost is Rs. 320 million. Therefore the
total cost allocated for the reforestation programmes and enrichment planting of tree species in the
project area is 720 million.
In addition to the above, 500 acres will be planted with indigenous species of timber trees, especially
in home gardens as well as along drainage canals. In addition, another Rs. 100 million has been
allocated for establishing electric fences for protection of settler families.
Estimation of economic value of the lost carbon sequestration function
The submerged area consisted of various land uses and such vegetated landscapes perform
significant carbon sequestration function. The carbon sequestration function of a forest mainly
depends on species mix, organic matter content of species, and the age distribution of the stand,
type of soil, climatic characteristics and below ground biomass. Bundestag (1990)and Houghton et
al. (1987) provided estimates of carbon content of soils and biomass for different tropical land uses.
Applying those values to the above forest areas will provide an estimate of the total carbon lost and
the economic value can be calculated based on the value of damage caused by a ton of carbon
released to the atmosphere. The total loss will be Rs 532 million. The Table 6-2 provides details.

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Table 6-2 Global warming damage cost due to inundation
Forest type Area (ha) Total average Carbon Global warming damage
amount of each land cost of each land extent
use (t/ha) (Rs)
Bare Lands 114.4 63 25,081,056
Dense Forest 528.7 194.5 357,855,882
Open Forest 202.1 128.5 90,375,078
Paddy 8.1 63 1,775,844
Scrub 258.2 63 56,607,768
Total 1111.5 531,695,628
6.6 Benefits
Benefits had to be estimated with regard to the past experiences of similar projects, with special
emphasis to the Moragahakanda, Kaluganga, NCP, Maduru Oya Right bank and Uma Oya projects.
Most calculations depended on the data and information available through Department of
Agriculture, Census and Statistic Department and the Mahaweli Authority of Sri Lanka. The direct
benefits are covered by agriculture. Indirect benefits received through the establishment of the
project such as fishing, livestock, domestic use etc. are also significant. Considering the annual
benefits in financial terms the total net income is Rs. 1021 million and it is Rs.1318 million in
Economical term. As project completion will require 4 years the benefits will accrue from the 5th year
onwards.
6.6.1 Paddy Cultivation
The total cultivable area in this project is 2400 ha. This includes 1,700 hectares of newly irrigated
area. Currently, the existing 700 hectares of paddy lands are being cultivated only during the Maha
season. Through the project it is expected to provide water to cultivate paddy in Yala season also in
the existing 700 ha, increasing the cropping intensity from 1.0 to 2.0.

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Table 6-3 Annual crop cultivation
With project Without project

Maha Yala Maha Yala
New New Annual Annual
cultivatio cultivatio total total
Existing n n
Paddy 700 1,700 900 3,300 700 700
Chilies 200 200
Big onion 120 120
Red onion 240 240
Maize 500 500
Ground nut 200 200
Soya Bean 240 240
Total 700 1,700 2,400 4,800 700 700
It is assumed that the yield will increase by at least one metric ton per hectare. The expectation of
additional production is 1,700 metric ton per annum and expected benefit is Rs. 54 million. The
breakeven point is the cross cutting line of the cost and income curves. The price per 1 Kg. of paddy
is Rs. 32 in financial terms and Rs. 36.80 in economic terms, but the breakeven point is located at a
lower level in comparison with the market price. The reasons for lowering the breakeven point to a
significant level are the fact that the water is issued free of charge, and provision of a government
subsidy for fertilizer. Therefore, Paddy cultivation remains popular at present.
6.6.2 Other Field Crops (OFC) cultivation
After the development of the proposed project, it is expected that in the Yala season 74% of the
1700 ha of newly established croplands could be cultivated with OFC Table 6-4. These are popular
among the farmers in this area and which can save foreign exchange to the country as current
imports can be reduced. When the prevailing climatic conditions are taken into account, positive
effects can be expected from improved water management and the situation of agricultural
production will yield more profitable results. Through efficient water management, farmers could be
motivated to increase benefits from OFCs.

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Table 6-4 Benefits indicators in economic terms
Agricultural benefits (Economic)

Crop Gross Total Net
Crop area Production value Production Net revenue labour benefit
TF1 Ha Mt Rs. Mn Cost per ha Rs. Mn output Rs. Mn
Paddy 1700 10450.0 384.56 63,996.50 262.97 95.76 358.73
Chillie 200 400.0 81.00 73,500.00 50.10 14.70 64.80
B- Onion 120 1680.0 75.60 153,631.00 57.16 7.11 64.27
Red-Onion 240 3600.0 291.60 265,715.00 227.83 9.07 236.90
Maize 500 2500.0 93.75 80,132.50 53.68 48.87 102.55
Groundnuts 200 400.0 46.80 62,484.00 34.30 19.71 54.02
Soya bean 240 480.0 41.15 55,245.70 19.14 11.79 39.93
Mango 58 1856.0 33.41 72,815.00 29.18 3.90 33.08
Papaw 58 1798.0 56.64 375,384.00 34.86 1.95 36.81

Total 3316 23164.0 1079.56 769.24 982.10
Benefit indicators in Economic terms and financial terms are given in Table 6-5 and 6-6 respectively.
The criterion used to review agricultural benefits ascribed to the project is the profitability of land
under irrigation. The gross income is used to signify the total value of the production. The gross
margin defined as the final value of the production per hectare has been calculated deducting the
cost of production or value of inputs. This is referred to as the variable cost. The cost of seeds,
fertilizer, agro-chemicals and hired labour is also included in to the variable cost. However, family
labour is not included.

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Table 6-5 Benefits indicators in financial terms
Agricultural benefits (Financial)

Crop Gross Total Net
area Yield Production Price value cost revenue
Crop Ha Mt/ha Mt Rs/Mt Rs. Mn Rs. Mn Rs. Mn
Paddy 1700 5.5 10450.0 32,000 334.40 146.22 188.18
Chillie 200 2.0 400.0 180,000 72.00 45.37 26.63

B- Onion 120 14.0 1680.0 50,000 84.00 43.68 40.32
Red-Onion 240 15.0 3600.0 90,000 324.00 81.74 242.26
Maize 500 5.0 2500.0 32,000 80.00 34.64 45.37
Groundnuts 200 2.0 400.0 130,000 52.00 16.84 35.16
Soya bean 240 2.0 480.0 125,000 60.00 7.72 52.28

Mango 58 32.0 1856.0 20,000 37.12 13.35 23.77
Papaw 58 31.0 1798.0 35,000 62.93 31.44 31.49
Total 3316.00 23164.00 1106.45 420.98 685.47
In order to assess the benefits in economic terms, the value added has been applied. A similar
philosophy was applied for the economic terms except that the hired labour has not been used as a
cost but has been added to the benefits together with family labour. Further, to calculate outputs
and inputs in the economic term use their respective conversion factor (SCF). The given amount of
benefits may increase according to improved conditions such as changes in the cropping pattern to
higher valued crops, price escalation of the outputs and the increase of yield per hectare due to
agriculture extensions and introduction of new varieties.
6.6.3 Benefits for Drinking and Domestic water
The project provides water for drinking and domestic use in Sampath Nuwara town area as well as
the surrounding villages in Weli Oya. Around 50,000 persons will receive this benefit. The allocation
for drinking water is 2 MCM per annum. The revenue per unit (1000 Liters) of raw water has been
valued at Rs. 5 in both Uma Oya and NCP benefit calculation. Therefore the estimated annual value
of drinking water is Rs. 10 million.
6.6.4 Inland Fisheries Development
The proposed reservoir can also be used to develop inland fisheries as the proposed reservoir has a
surface area of 1900 ha at full supply level. The expected income from inland fisheries is calculated
based on a minimum of yield of 200 Kg/ha per annum and a minimum cost of Rs. 80/= per Kilogram.

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The estimated total annual production is 378 MT. Therefore the expected net income from the
inland fishery from Kivul Oya alone will be Rs. 45.6 million. In addition, five other tanks in the
command area will receive water from Kivul Oya reservoir and therefore, will be able to use for
inland fisheries production.
6.6.5 Settlement and Home garden development
Additional income can be expected through home gardening. These productions are mostly used for
family consumption and to generate additional income, which is difficult to count. The allocated land
for home garden for a settler is 0.5 acres and the total number of families is 6000. Considering these
figures there is a significant economic impact on family economy and the national economy.
However, these benefits were not included in the economic benefits due to lack of proper
information.
6.6.6 Development of Livestock farming
There is a significant economic impact to the community through livestock farming activity. Milk
production alone is expected to generate 4,562,500 liters. The estimated net benefit is Rs. 114
million annually. There are additional benefits of livestock farming which cannot be calculated.
These include factors such as using organic manure for the improvement of soil conditions and the
utilization of animals for various agricultural purposes such as farming, threshing and transport. All
these cannot be precisely quantified in economic terms but they should be considered as providing a
significant economic benefit in most respects.
6.6.7 Indirect benefits
Employment
Employment opportunities will be generated in the agricultural, construction and services sectors. It
is assumed about 2,000 employment opportunities will be created. Increase in the demand for labor
in the agriculture sector is due to more lands being made available for cultivation. With the increase
of OFC cultivation which is more labor intensive, demand for labor will further increase.
New jobs may also be created in the fields related to the supplying of inputs, marketing of
agricultural production and transport of inputs and outputs. Additionally, new job opportunities will
arise in the construction sector during the construction period. Agricultural production generated
from the project will reduce the import levels of foods and this will contribute to save foreign
exchange.
The intangible benefits of the project can be described as increased farm income, institutional
strengthening, secondary sector development, improving the socio-economic standards of the
community living in the area and regional development.

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6.7 Financial Analysis
In the calculation of benefits, only those accruing from the project were considered. Existing area of
700 ha already being cultivated with paddy in the Maha season has been excluded from the benefit
calculation. However, Yala paddy cultivation was included as this is a direct benefit from the project.
Financial prices for both the cost and benefit streams applicable during the assumed planning period
of 30 years have been calculated together with the net benefits of agricultural production in two
seasons (Yala and Maha). The evaluation includes an analysis in financial as well as in economic
terms.
Table 6-6 Project Performance indicators (Financial Terms)
Discount Rate (%)

Criteria Unit FIRR 8 10 12
Internal Rate of Return % 9.3
Net Present Value (NPV) Rs. Mn. 827.3 -278.8 -1130.9
Benefit /Cost Ratio 1.14 0.95 0.79
6.8 Economic Analysis
The difference between the economic appraisal and the financial appraisal, is that in the financial
appraisal, values are converted in to economic values by applying conversion factors. Conversion
factors were applied to output prices as well as to input prices. Economic values will thus reflect the
real value of the cost and benefits.
Table 6-7 Project Performance indicators (Economic Terms)
Discount Rate (%)

Criteria Unit EIRR 8 10 12
Internal Rate of Return % 14.8
Net Present Value (NPV) Rs. Mn. 3953.0 2353.8 1094.7
Benefit /Cost Ratio 1,78 1.49 1.24
The benefits will start from the 5th year when new irrigation activities will be commenced. Therefore,
cash flow becomes positive from year 5. From the 4th year, the construction investment will be
completed and annual net income will be increased to its maximum level of Rs. 1183 million.
6.9 Sensitivity and Risk Analysis
All of the decision criteria presented above indicates that financing of the Kivul Oya Reservoir
Development Project would be justifiable in economic terms. The internal rate of return gives the
maximum rate of interest that a project could pay if all resources were borrowed. It reaches 14.8% if
economic values are considered but becomes 9.3% under financial conditions. The benefits were
calculated at the minimum level.

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Table 6-8 Sensitivity Analysis (In Financial terms)
IRR Net Present Value (Rs. mn) Benefit Cost Ratio

Risk Case 8% 10% 12% 8% 10% 12%
%
Base Case 9.3 827.3 -278.8 -1130.9 1.14 0.95 0.79
a Cost + 10 8.3 -20.7 -1032.1 -1807.3 1.00 0.84 0.70
b Benefit - 10 8.2 139.5 -822.9 -1558.6 1.02 0.86 0.71
c Cost + Bene - 10 7.3 -465.6 -1394.8 -2099.3 0.93 0.78 0.65
In justifying irrigation projects, only the economic term is considered and an IRR of 10% would
suffice. However, in the present instance, the project has reached close to10% in financial terms
(FIRR) (Table 6-8) and 14.8% in economic terms (EIRR) (Table 6-9). Therefore, it can be surmised the
project is viable at every level.
Table 6-9 Sensitivity Analysis (In Economic terms)
IRR Net Present Value (Rs. mn) Benefit Cost Ratio

Risk Case 8% 10% 12% 8% 10% 12%
%
14.8 3953.0 2353.8 1094.7 1.78 1.49 1.24
Base Case
13.5 3118.4 1629.7 458.3 1.56 1.31 1.09
a). Cost + 10%
13.4 3049.5 1638.0 531.0 1.60 1.34 1.12
b) Benefit - 10%
12.2 2541.2 1157.6 76.8 1.45 1.22 1.02
c) Cost +10%, Benefit - 10%
The net present value reaches a positive value of Rs.3,953 million in economic term. In the discount
rate of 10% the net present value is 2,353 million – a positive value. Even in the discount rate of 12%
the net present value is a positive number of Rs. 1,094 million.
The total investment cost for the project is Rs. 7 billion and at end of the 30th year, the net present
value will be Rs. 25 billion. Further, nearly all irrigation projects give benefits to the country and the
society for several generations with proper maintenance; thus the present project has a vast
potential to benefit the state and the society.
In analyzing the costs and benefits associated with the project over a time span of 30 years, the
following conclusions can be drawn:

EIA FINAL Report
 Risks attributable to unexpected rises in construction costs (case “a” in above Table 6-8 and
6-9), due to increase in material prices and related inputs, but there is no threat to viability.
 Reduction of outputs (Case ‘b’ Table 6-8 and 6-9), due to physical losses and falling down the
prices for agricultural commodities or lower the production due to unexpected climatic
conditions, but there is no threat to success.
 Even in a worst case scenario, with 10% higher costs and 10% percent lower benefits (Case c
in Table 6-8 and 6-9) there is no threat to the project.
In summary (and with specific reference to the aggregate) it can be concluded that all components
of the project are viable to the highest degree.

EIA FINAL Report
CHAPTER 7
7. ENVIRONMENTAL MONITORING PROGRAMME
This chapter provides an environmental management plan (EMP) which includes a summary of
anticipated adverse environmental impacts with mitigation measures, parameters to be monitored,
places and frequencies of monitoring, facilities and funds available for monitoring and
implementation arrangements.
7.1 Summary of anticipated adverse environmental impacts and mitigation measures
A summary of anticipated adverse environmental impacts with mitigation measures is given in the
Table 7-1.

EIA FINAL Report
CHAPTER 8
8. CONCLUSION AND RECOMMENDATION
The project is located in an area where there had been minimal development in the recent past due
to the security situation that existed in the area. Hence the living standards of the inhabitants are far
below the average conditions compared to other areas of the country. The Government of Sri Lanka
has given very high priority to this project because one of its main policies is to bring development to
the war affected areas in the North and East.
The main negative environmental impacts that will arise due to the proposed project include loss of
natural habitats, escalation of human-elephant conflict, relocation of people, disturbance to
archaeologically important sites, reduction in flow of water downstream of the dam site, increased
potential for development of salinization and pollution due to overuse of agrochemicals. An
estimated 2500 ha of natural habitats will be lost due to the project mainly in the area inundated by
the proposed reservoir and the command area for new agriculture development. These habitats
support a rich assemblage of terrestrial fauna and flora, including few endemic and threatened
species. However, such habitats are available in other parts of the dry zone of Sri Lanka and no
unique habitats are lost due to the project. Further, the project will create a new aquatic habitat,
which can be utilized by aquatic animals and plants. Due to the new aquatic habitats, inland fisheries
in the region could also be developed, which will provide high quality protein by way of freshwater
fish for the people living in the area at a affordable price.
The project will contribute to increase the agricultural production of the country because it will
provide irrigation water to cultivate 1,700 ha of new land both in the Yala and Maha seasons.
Further, 700 ha of existing agricultural lands, which are cultivated only during the Maha season will
now have sufficient water to be cultivated during the Yala season as well. Due to increase in
agricultural production, the local economy in the area will also be improved. Further, project will
enhance livestock production in the area and facilitate the supply of safe potable water to the
community. Therefore, the project confers many positive impacts on the community while the
negative impacts, are comparatively less in magnitude and intensity and can be mitigated by
appropriate measures
Kivul Oya project area is a part of system L of Maheweli Development Plan. Under this plan 39,000
ha were identified for development by diverting 612 MCM annually from Mahaweli River through
NCP canal. But, water resources assessments done recently with latest flow data have revealed that
available water resources are not adequate for the proposed development of system L. Therefore,
the development of in-basin water resources is needed to develop the area. Kivul Oya project is
envisaged to develop 1,700 ha of new lands and 700 ha of existing lands under minor tanks. The
project will also provide drinking water to Weli Oya area, improve internal and main roads and
improve health and education facilities in the area.
Due to the above reasons, the project is recommended to be implemented. However, during the
construction and operation phases the mitigation measures suggested should be implemented
under proper monitoring as indicated in this report.

EIA FINAL Report

Kivul Oya Reservoir Project ECBA

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Proposed Kivul Oya Reservoir Project

EIA FINAL Report

Salient features of the project

Mahaweli Authority of SriLanka i

Mahaweli Authority of SriLanka ii

Environmental impacts and mitigation measures

Mahaweli Authority of SriLanka iii

Impact Mitigation measure

Enrichment of degraded forest in identified areas such as

Mahaweli Authority of SriLanka iv

Monitoring of project activities should be done by an internal monitoring committee consisting of

Conclusion and Recommendation

Mahaweli Authority of SriLanka v

1.1 Background of the Project

Mahaweli Authority of SriLanka 1

1.2 Objectives and Justification of the proposed project

Therefore the objectives of this project are;

Mahaweli Authority of SriLanka 2

1.3 Objectives of EIA Report

Mahaweli Authority of SriLanka 3

ii). Recommend appropriate mitigation measures to avoid, minimize, remedy or

v). Provide an environmental management plan to achieve overall environmental

1.4 Methodologies and technologies adopted in EIA report preparation

1.4.1 Literature Review and Preparation of Maps

1.4.2. Hydrology, geology, irrigation related aspects, and civil works

The details of the methodology used were as follows

Mahaweli Authority of SriLanka 4

ii. Scrutinized Geological conditions at key locations by field surveys.

iv. Suitable drilling locations were recommended based on studies.

v. Identification of special geological conditions, including conditions affecting slope stability

(c) Irrigation Aspects

ii. Analyzed arrangements for future maintenance of developed infrastructure.

iii. Evaluated design assumptions, design criteria and conveyance efficiency.

Mahaweli Authority of SriLanka 5

(d) Civil Engineering /Infrastructure

v. Construction material requirements, quantity of excavated material and possibility of re-use,

Mahaweli Authority of SriLanka 6

1.4.3 Biological Environment

In November 2013, a reconnaissance survey was done to identify major habitats/vegetation

Mahaweli Authority of SriLanka 7

Habitats and ecological status

- Endemic/threatened or other species requiring special attention

1.4.4 Socio-economic aspects

3. Locations affected by the constructions and development activities.

Mahaweli Authority of SriLanka 8

b. Distribution of income and sources, goods and services

c. Existing health and infrastructure facilities

d. Existing environmental/social/health issues in the area

A reconnaissance survey followed by a household questionnaire survey was conducted targeting 38

1.4.5 Archeological aspects

1.4.6 Agronomic Aspects

Mahaweli Authority of SriLanka 9

d. Number of livestock, production, productivity;

e. Estimated annual income from farming

a. Rainfall and evaporation data to assess agro-ecological status.

c. Data on irrigation potential.

e. Data on supporting infra-structure – roads, service buildings, electricity, drinking water,

1.4.7 Mitigation measures and environmental management plan

 Overall management requirements for biodiversity, ecological resources, environmental

 Management plan for alien invasive species (flora and fauna)