Expenses for the Uma Oya project now borne by the treasury

COLOMBO (News 1^st) - All expenses for the Uma Oya Multi-Purpose Development Project which was launched under Iranian Government funding, is now being borne by the Treasury. Work on the Uma Oya Multi-Purpose Development Project commenced in 2008 with a loan provided by the Export Development Bank of Iran. The project comprises of a 120MW hydro-power station, a 27-kilometer long tunnel and two reservoirs with an allocation of 525 Million Dollars for the project. However, as the US and its allies imposed sanctions on Iran the loan for this project did not come through. The Ministry of Mahaweli Development and Environment says it is the Treasury that is spending on all expenses for this project. The Government has reached a decision to withhold a sum of 800 Million rupees from the total estimate to the Iranian and German Contractors undertaking the tunneling for the project. The Government hopes to use these funds to provide compensation to the houses damaged during the excavation process and to launch new water projects in catchment areas that were affected. As an environmental feasibility study is yet to be carried out, the locals in Thanthiriya, Kinigama, and Udaperuwa are facing a serious difficulty in obtaining clean drinking water. The Ministry of Mahaweli Development and Environment says three new water supply projects have been launched and water at present is being distributed via bowsers. Farmers too have been impacted by this situation.