ISSN: 1391 - 0531
Sunday, December 3, 2006
Vol. 41 - No 27
Columns - The Sunday Times Economic Analysis

Will the white elephant chase the birds away?
By the Economist

The construction of an international airport at Weerawila has raised environmental concerns. The conflict between the preservation of the environment and economic development imperatives has been at the core of development debates in the last few decades. Ecologists tend to emphasise the need to preserve the environment, while economists (and politicians) consider the needs of development as superseding environmental concerns.

A man points to the proposed site for the controversial airport

It is for this reason that the world community came up with the concept of sustainable development, the notion that it was the responsibility of the current generation to pass on the environment to future generations in much the same state as at present, while undertaking development projects. The concept of sustainable development has this core principle in mind.

The concerns in global warming and fears that the sea would rise and gobble up some parts of inhabited countries and that atmospheric pollution would affect the health of human beings, are among some of the many specific issues that have become concerns in recent years. Equally important has been the need to ensure that animal species survive, that the beauty of waterfalls remain, that tropical forests and other diminishing environmental assets be preserved. Among them is the preservation of bird life. It is also due to the recognition of the importance of environmental preservation that all development projects in the country, even the setting up of a single industrial plant, requires the clearance of the Central Environmental Authority. An environment assessment is of much significance when an economic project is a major one affecting an entire area of a country.

In this context the question that is asked is whether the Weerawila International Airport project has had an environmental assessment. From all available information there has been no such assessment on the one hand, and on the other, environmentalists have pointed out clearly that it would drive away birds from one of the country's richest areas of bird life and a bird sanctuary. There is another counter issue as well that appears to have not been considered. That birds could be a threat to air planes were they to get in the way of aircraft on take off and landing. The crash of planes owing to bird intrusions is quite well known.

What are the hazards to the environment in the area? Will the bird sanctuary in close proximity in the region be affected? What are the ecological impacts on the low lying areas in the region and on paddy and other crop cultivation? Has an environmental impact assessment been undertaken? Has the Central Environmental Authority given its approval? How come an important national project has by-passed the regulation of requiring a clearance from the Central Environmental authority? This is the ecological aspect of the issue.

The economic aspects also seem to have been considered. Last week we touched briefly on the salient economic issues. Once again we bring out the issue of whether the airport would be financially viable. Were there studies to determine whether the cost of the project would be offset by the benefits, direct and indirect? Was the Department of National Planning consulted? What was their report? What were the views of the Central Bank that is the official Economic Adviser to the government? Was a feasibility study undertaken to determine the benefits. Were airlines consulted as to whether they are likely to fly into Weerawila say from London or Frankfurt or Singapore or Hong Kong or Tokyo? Would SriLankan Airlines find it profitable to commence international flights from Weerawila?

In short, was a feasibility study undertaken and a cost: benefit analysis done? The environmental concerns could have been incorporated in what economists call an Extended Cost: Benefit Analysis that internalises both the environmental benefits and environmental damage.

The other important issue is the question raised last week about the prioritisation of expenditure. The government has rightly placed an emphasis on infrastructure development that is a clear bottleneck to economic growth in the country. Within this prioritisation is the expenditure on an international airport, whose benefits are uncertain, justified? Apart from the development of highways, there is a crying need to modernise and even extend the railway network. Why should this large expenditure of US$ 1500 million not be spent on the development of the railways? This would have made a serious impact on transport of people and reduced the congestion on roads and in due course reduced expenditure on fuel. Why was this option not thought out? Once again what are the views of the Planning Ministry, Central Bank and the Institute of Policy Studies, on this project?

The vast expenditure on this airport is likely to exceed the amount mentioned today and an unjustified expenditure in the context of the country's dismal fiscal situation of a high budget deficit, huge public debt and increasing expenditure on the war. Such an expenditure channelled for the improvement of the country's railways would have made a positive impact on the economy, much greater than the construction of an airport that is likely to be hardly used by international airlines. Yet there is very little public criticism of the project. Instead mostly praise from sycophants and political stooges. Commonsense suggests that the WIA is likely to be a white elephant whether or not it drives the birds away.

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Copyright 2006 Wijeya Newspapers Ltd.Colombo. Sri Lanka.