We must go ahead with reservoirs projects



In ancient times, thousands of minor tanks were constructed in the country and they played a vital role in the rural economy in the dry zone. The access to water was considered as important as the right to life in the rural agricultural society. According to scholars, the total number of minor tanks in Sri Lanka is in the range of 12,000-15,000; most of them are dilapidated.

In the meantime, a cascaded tank-village system in the dry zone of Sri Lanka has been designated as a globally important agricultural heritage system by the Food and Agriculture Organization. A cascaded tank system is of high potential to absorb shocks of floods and droughts and also nurture the surrounding ecosystems, though many such systems are not in operation today.

Today, in Sri Lanka, almost all reservoir construction projects are implemented by state organisations with either local or foreign funds. Like in many other development projects, analyzing the economic feasibility of a reservoir project is a critical factor during project appraisal, as reservoir projects are considered investments.

In the light of multipurpose reservoir projects, the benefits are usually considered agricultural production from potential irrigable lands, domestic and industrial water supply, and hydropower generation. Regarding small scale reservoirs in the remote areas, the expected benefits would mainly be water supply for agriculture and domestic needs.

Economic evaluation

For evaluating economic feasibility, Internal Rate of Return (IRR) is the criterion often used, though there are several others. The IRR for an investment is the discount rate for which the total present value of future cash flows equals the cost of the investment. In other words, it is the discount rate of the project which produces zero Net Present Value (NPV), and simply speaking, it is about probable gains of the investment. Working out such calculations involves project cost and estimated direct benefits of the project for the expected lifetime.

For many reservoir projects environmental impacts assessments are carried out as part of the project appraisal process and, nowadays, social impacts are also assessed. Even if there are considerable positive aspects identified during such studies, they are not regarded as economic benefits at the aforementioned evaluation stage, and one reason is the difficulty in quantifying such indirect benefits and converting them into financial terms. As a consequence, there are instances where some useful project proposals are either given less priority or discarded due to the unsatisfactory economic feasibility.

However, irrespective of its scale, a reservoir provides numerous advantages, which are often overlooked by those who adopt the present criteria of economic evaluation. Some of these vital socio-economic and environmental advantages are briefly discussed below.

Flood mitigation

A reservoir is a useful structure to mitigate floods being the best intervention among other alternatives. Many types of damages incurred by floods, like damage to agricultural crops, public property and disturbances caused to human activities can be mitigated by reservoirs constructed in the upstream of the vulnerable areas. During the economic evaluation these benefits would not be taken in to account unless the reservoir is specifically designed for flood mitigation.

Inland fisheries

At present, most of the reservoirs are used for inland fisheries. In some reservoirs, there are legally incorporated fishermen societies and extension services are provided by the National Aquatic Development Agency. Therefore, a reservoir used for inland fishery industry has a good potential to generate high income livelihoods among the rural population, and thereby to uplift their living standards. When the money spent by the country to import fish products is concerned, this would be a measure of saving foreign exchange, as well.

Other water uses

Some reservoirs can provide water for domestic uses in addition to agriculture. Even if people can get raw water free of charge from any source, the construction and maintenance costs of alternative facilities like tube wells are very high. Further, reservoirs enrich ground water resources and people who use groundwater for domestic, agricultural and industrial purposes are benefitted. It should be noted that some of the industries in Sri Lanka depend on ground water and the presence of reservoirs in the area will be a crucial factor for the sustainability of such industries.


Most of the reservoirs can be used for recreational activities and Gregory’s Lake in Nuwara Eliya city limits is an example, where boating, cycling and many other activities are very popular. If we are to develop our tourist industry the reservoirs have to contribute a lot by facilitating such recreational activities, and this can be achieved at a lower cost compared to the alternatives, which require costly new infrastructure.


Diminishing of wildlife has become a major environmental issue in our country. Elephants are perhaps the worst affected. These animals lack basic needs like food and water in their habitats, mainly due to human activities like forest clearing in addition to natural phenomena like droughts. This situation makes them walk out of their boundaries in search of food and water, and some would tend to destroy public properties as the extreme cases and often get killed by man, while some others are killed by trains and road vehicle accidents.

Today, the solution to the human-elephant conflict has been constructing electric fences to hinder their movements. If a reservoir is available within the area they live in, there is a higher chance that wild animals confining themselves to their specific zones without invading villages. A classic example is the Udawalawe sanctuary, where most of the elephants hang on closer to the Udawalawe reservoir. Generally, the catchment of a reservoir is protected as a reserved forest area devoid of human activities, and this would be a safer zone for the wildlife with the easy access to food and water.

Climate change impacts

Constructing more reservoirs is the most sustainable solution for many issues we are facing at the moment due to impacts of climate change. Although, we are focusing on floods and droughts, very little attention is currently being paid to reservoir sedimentation caused by catchment soil erosion. Reservoir sedimentation is an issue faced the world over. With climate change, rainfall intensities have increased and higher intensity rainfall escalates the soil erosion process. However, as a country which heavily depends on reservoirs for a multitude of uses, the question is whether we can take our existing reservoirs for granted. This issue is further aggravated by improper land use and other human practices taking place in reservoir catchment areas. Further, the irregular rainfall pattern causes floods and extended drought periods, as we witness at present. No other solution is better than increasing the water storage capacity of the country to mitigate these extreme cases.

Increasing storage capacity

Sri Lanka has still not utilised the full potential of available water resources. Nearly 25% of the annual rainfall received flows to the sea as runoff. Total rainfall storage capacity of the country can be further increased by constructing more reservoirs. The potential capacity increase would be much more than long-term capacity loss due to sedimentation. If implemented, they would mitigate both flood and drought issues, and satisfy agricultural and drinking water needs, while some even have the potential of generating hydro-power.

Final thoughts

Discussed above are some tangible benefits of reservoirs, though most of them are beyond quantitative economic analysis. It is high time we considered these indirect benefits fairly, and go ahead with our potential new reservoir projects and restorations of many abandoned minor tanks in the rural areas so that we can face the future with more confidence, given the fact that reservoirs can mitigate many potential climate change impacts. A well-known economist in a recent television debate said, Economics was a myth. This is very true as far as the economic evaluation of reservoir projects isconcerned, as economic criteria seem unable to assess the real benefits.

The author is a Chartered Civil Engineer. This article is based strictly on his personal views and does not reflect the positions he holds in any organization.


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