The U.S. Embassy in Colombo says that consistent with the Millennium Challenge Corporation’s worldwide policy in all partner countries, once the grant assistance agreement is signed, the Government of Sri Lanka will send it to parliament for approval. 

“Inasmuch, Parliament will have ample opportunity to review the grant assistance agreement,” it said, issuing a statement on the MCC’s US$ 480 Million grant to Sri Lanka. 

Cabinet had this week approved the implementation of the grant, which consists of grant funds for traffic management in Colombo, road construction islandwide, and land administration improvements covering the whole country.

“During that review period, the Government of Sri Lanka will develop plans to implement the grant assistance agreement and design projects to improve transportation and land administration”, the embassy said. 

This grant assistance agreement will directly benefit over 11 million Sri Lankans and meaningfully stimulate economic growth, it added. 

“Parliamentary review and approval are required by MCC to ensure the grant assistance agreement has the support of the government and the people.” 

The U.S. Embassy also provided the following information on the MCC grant:

Highlights of MCC Compact

• The Government of Sri Lanka and MCC together identified weak transport infrastructure and weak land administration practices as two binding constraints to economic growth in Sri Lanka.

• To address these constraints, the proposed compact consists of two projects: a transportation project and a land project. The total budget for the compact is $480 million.

• The $350 million transport project has an estimated economic rate of return of 19% and seeks to increase the relative efficiency and capacity of urban and provincial transport infrastructure in the Western, Central, Sabaragamuwa and Uva Provinces.

• The transport project will upgrade physical roadway networks, modernize traffic systems, and introduce policy and regulatory reforms. 

• These investments will reduce severe traffic bottlenecks, create safer, more reliable public transportation, and lower the transport costs required to connect people and goods with booming markets. 

• The $67 million land project has an estimated economic rate of return of 26% and aims to expand and improve existing Government of Sri Lanka initiatives to increase the availability of spatial data and land rights information. The project will initially focus on districts in the Central, North-Western, North-Central and Eastern Provinces.

• Land activities will help the Government create an inventory of state lands, modernize methods of valuing lands, strengthen tenure security for smallholders, women, and firms, and digitize deeds records so that they are less vulnerable to damage, theft, and loss. 

• Together, the two projects are projected to benefit 11.3 million people, which accounts for 54% of Sri Lanka’s population.

• The remaining $63 million will be used to support technical assistance, feasibility and design studies, project administration, and monitoring and evaluation. These funds will help the Government to effectively design, implement, manage, and monitor the compact program.

• The Government of Sri Lanka will establish a local entity staffed by Sri Lankans to coordinate implementation by the ministries and departments mentioned above. This entity will be accountable to a Sri Lankan Board of Directors comprised of eight government officials and three representatives from the private sector and civil society. 

MCC Land Project

The Land Project is budgeted at $67 million and aims to expand and improve existing Government of Sri Lanka initiatives to increase the availability of spatial data and land rights information. This project will help the Government identify under-utilized state land that can be put to more productive use and maximize rents from lands that the government leases. It would also increase tenure security and tradability of land for smallholders, women, and firms by digitizing deeds records so that they are less vulnerable to damage, theft, and loss and moving properties from the Deeds System to the Title Registration System. The Land Project has five activities, which enhance existing Government initiatives:

• Create a cadastral map of land parcels and complete inventory of state land, providing data to be entered into the Government’s e-State Lands Information Management System (eSLIMS). Budget: $23,400,000;

• Improve the valuation of state and private lands by improving data collection in support of a computerized mass appraisal system, building on Government efforts to strengthen the Valuation Department. Budget: $6,500,000;

• Improve the Deeds Registry by digitizing existing records and linking them to digital parcel information, building on the Government’s e-Land Registry initiative. Budget: $11,400,000;

• Improve tenure security for all land holders by moving properties from the Deeds system to the Title Registration system, expanding the Government’s Bim Saviya program. Budget: $19,300,000; and

• Research in support of measures to improve land administration policies. Budget: $6,700,000. 

The eSLIMS is an information technology system that contains maps of state land parcels vested with various Government agencies. The system tracks applications for land parcels and information about state lands that the Government already leases out and collects revenue on. The Government is currently automating the land valuation process that will accelerate property valuation for tax and other purposes. The eLand Registry system contains digitized land registry information to simplify and make more secure the completion of land transactions by property owners and buyers. The Bim Saviya program converts private land in the Deeds system to a more secure Title Registration system. Unfortunately, inadequate financial and technical resources has resulted in all of these efforts moving forward sporadically and without proper coordination. The MCC Land Project would fill these resource gaps.  

MCC Transport Project

The Transport Project is budgeted at $350 million and aims to improve urban and rural mobility in the Western, Central, Sabaragamuwa, and Uva Provinces in two ways. First, it will ease traffic congestion and improve public transportation in the Colombo Metropolitan Region. Getting transport right is key to making Colombo a more livable, well-functioning city. Second, the Transport Project will improve connectivity between the central part of the country and ports and markets in the Western Province. The Transport Project will upgrade transport infrastructure and systems and has three activities:

• $160 million has been allocated for an Advanced Traffic Management System (ATMS) for the Colombo Metropolitan Region. ATMS combines physical improvements and civil works with technology enhancements to optimize the efficiency of the existing road networks along eight heavily traveled corridors that link central Colombo with its suburbs. The activity will also introduce modern technologies for vehicle detection, real-time data collection and analysis of traffic flows; an interconnected traffic signal system; and dedicated bus priority systems throughout the network. ATMS is a proven and powerful tool that other global cities are deploying to safely facilitate flow of pedestrians, goods, and passengers within urban street networks to stay ahead of the congestion curve. ATMS involves civil works improvements to 132 junctions in greater Colombo and a traffic management center where implementation of effective traffic control strategies are coordinated along approximately 205 kilometers of existing road networks.

• The $50 million bus service modernization activity would improve bus services in greater Colombo. Bus service accounts for 45 percent of all passenger miles traveled in greater Colombo and disproportionately serves low-income individuals. The activity will introduce automated fare collection systems based on smart cards; create single schedules for multiple bus operators running on a given route; introduce GPS bus tracking to enable transit operators to know buses’ locations and determine if they are operating according to schedule; and improve safety and accessibility for women, the elderly, disabled and other vulnerable groups. MCC support will also help the Sri Lanka Transport Board and private bus operators develop sustainable financing arrangements for purchasing new state-of-the-art buses. 

• The $140 million rural transport activity would upgrade approximately 131 kilometers of interprovincial roads in the Central Ring Road Network connecting the Central, Sabaragamuwa, and Uva Provinces with ports and markets in the Western Province. MCC will rehabilitate various segments of the network. Passengers and goods from the Eastern Province also travel through this network. Improvements to this network would net several benefits as the central region is a center of the agriculture and tourism industries, is one of the most ethnically diverse, and has large concentrations of poor.