Financial Times

Poor maintenance raises risk of Mahaweli dams cracking
The risk of a Mahaweli hydropower dam cracking after weakening owing to poor maintenance over the years because of inadequate funding has been highlighted by the Central Bank in its annual report.

It suggested that electricity consumers be charged a fee and farmers made to pay a user charge to maintain the hydropower generation and irrigation infrastructure which has been neglected.

"The weakening of structures as a result of inadequate maintenance increases the risk of a structural failure, which can potentially cause a massive destruction of human lives, physical properties, the eco-system as well as reduce the overall economic growth of the country," the bank said.

It noted that the recent burst of a relatively small dam 25-metres high and 147-metres long (about one fourth of the Randenigala dam), built very recently in 2003 in Pakistan washed away some 20 villages, killing hundreds of persons and leaving about 30,000 homeless.

Greater vigilance in construction and maintenance of projects of this nature is required as geologists have warned that Sri Lanka is now more vulnerable to earthquakes and other natural calamities, as the country is now not far away from the newly formed hyperactive plate boundary.

Introducing a reservoir maintenance contribution (RMC) payable by electricity consumers based on the water released from Mahaweli reservoirs for power generation can be considered as a source of financing maintenance, the Central Bank said.

"This will require only about Rs. 0.05 increase in the electricity tariff per unit, which will generate about Rs. 300 million per year." The Mahaweli power plants generated 1,428 GWh of electricity in 2003, to a value of Rs. 11 billion. The average electricity tariff could have been 25 per cent higher (by Rs. 1.93 per unit) than the current level (Rs. 7.70 per unit), if Mahaweli power plants were not available.

"Introducing a user charge on irrigation water also should be considered to part finance the cost of maintenance of irrigation infrastructure and also to reduce wastage of water," the Central Bank said.

Other forms of revenue generating activities such as licensing fishing rights in Mahaweli reservoirs subject to security regulations and promoting tourism and recreational activities also could be considered. The Central Bank called for the drafting of dam safety standards andregulations which do not yet exist in Sri Lanka.

The Mahaweli Authority of Sri Lanka (MASL) manages reservoirs, dams and irrigation facilities under the Mahaweli programme and the Ceylon Electricity Board (CEB) operates power stations.

The MASL depends entirely on funds allocated through the central government budget as it does not generate funds within to finance its operational and maintenance expenses.

Under the exiting arrangements, water stored by the MASL is supplied free of charge to the CEB for power generation and to farmers for cultivation and other activities.

Owing to fiscal difficulties faced by the government and non-recognition of reservoir maintenance expenditure as a priority item, allocations made for maintenance of reservoirs has been significantly less than what is required.

In addition to major repairs to be done once in a few years, the funding requirements for routine maintenance of major reservoirs is around Rs. 300 million a year, but amounts received are far less. "Mainly due to the lack of sufficient funds, standard maintenance practices have not been carried out as required," the Central Bank said.

The postponement of required maintenance work will not only result in an increase in the cost of maintenance substantially on a future date, but would also add a larger additional cost resulting from an exponential rate of deterioration leading to additional work or even replacement.

Problems relating to maintenance and protection of the catchment areas, silting, water management, financial management and human resources management also exist at the reservoirs which need early attention of the relevant authorities, the bank said.

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