AMBASSADOR DISCUSSES RECONSTRUCTION PROBLEMS WITH

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000557

SIPDIS

E.O. 12958: DECL: 03/18/2015
TAGS: PGOV PREL PTER TPHY EAID CE
SUBJECT: AMBASSADOR DISCUSSES RECONSTRUCTION PROBLEMS WITH
PRESIDENT KUMARATUNGA

Classified By: Ambassador Jeffrey J. Lunstead FOR REASON 1.4(D).

This cable contains an action request - see para 7.


1. (C) SUMMARY: Ambassador told President Kumaratunga that
reconstruction effort was running into problems, especially
on transitional shelter, with monsoon season looming. There
was a risk of major problems that could cost Sri Lanka the
international good will it had achieved in the emergency
phase. Problems included slow pace of land acquisition and
customs duties/slow clearance of reconstruction goods.
100/200 meter exclusion zone was also causing problems.
Kumaratunga promised to try to resolve land and customs
problems, but was adamant on maintaining exclusion zone.
Ambassador also said organization of reconstruction effort
was a problem, since only President seemed to have authority
to make decisions and enforce them, suggesting she appoint a
Ministerial-level person to be in overall charge. President
said she would consider this. Ambassador said we were not
aware of threatening geological activity near Sri Lanka, and
promised to get Kumaratunga more information on this. END
SUMMARY



2. (C) Ambassador Lunstead called on President Kumaratunga
on March 17. As Ambassador arrived, Kumaratunga was engaged
with Education Secretary Tara De Mel. After a short
discussion (lament) on the comparative costs of paying for
children's college education--Kumaratunga has two children in
the UK--Ambassador said that he had requested the meeting
because of our concerns about some aspects of the
reconstruction program. He was raising these issues as a
friend, and knew that we all shared the same goals of an
efficient reconstruction effort. He was not speaking on
behalf of other donors, but knew that they shared many of our
concerns. Sri Lanka had done very well during the emergency
phase, sheltering and feeding people and averting the medical
disaster that everyone feared. This had been in large part
due to a "get it done attitude" in which officials bypassed
normal procedures. We were very concerned now about what was
happening in the more difficult reconstruction phase,
especially in the transitional shelter program. It was
moving very slowly, in part because officials seemed to be
reverting to normal bureaucratic procedures. If the people
now under tents and in other unsatisfactory shelter were not
given something more substantial before the monsoon started
(probably end-April),we would likely face an outbreak of
disease (which we managed to stave off during the immediate
relief phase). The good will which Sri Lanka had earned from
the world could quickly turn sour as the media reported
problems.


3. (C) Ambassador said that one of the major hindrances in
the temporary shelter program was inability of the system to
make land available. As an example, USAID had funded one NGO
to build 4,000 shelters, but it so far had only received land
for 250. The land problem was compounded by uncertainty
about the 100/200 meter buffer zone. Perhaps some flexibility
in application of the zone might be possible, at least in the
provision of transitional shelter.


4. (C) President Kumaratunga replied that she was aware of
the problems and was working hard to resolve them. One cause
was an early and erroneous decision by the government to go
straight to provision of permanent shelter. They now realized
that was a mistake. She knew that land was a problem, but
thought that sufficient land was now identified and would be
allocated soon. At her request, Ambassador gave her a
spreadsheet detailing USAID projects.


5. (C) With regard to the 100/200 meter exclusion zone, she
said that she had made that decision personally and it was
"completely scientific." In fact, she said, the zone should
be as much as 500 meters, but that was not practical. She
said that most of the populace within the 100 meter zone were
eager to move--"only 5-10 percent don't want to go."
(Ambassador politely demurred.) The Opposition UNP party was
stirring up trouble among the exclusion zone inhabitants, but
that was purely political. The fishermen were afraid for
their boats and nets, she knew, and therefore the government
would construct lockable boat shelters, and the fishermen
could take turns guarding them at night.


6. (C) Ambassador said that it might be more practical to
allow people to remain and rebuild closer to the shore, but
provide a good warning system so they could evacuate in case
of a threat. This was the system followed in Hawaii, for
instance. Kumaratunga said that was practical for the US,
where buildings could be constructed to withstand a tsunami,
but not for Sri Lanka, where the buildings would be
destroyed. In Tamil Nadu, she said, there was a pre-existing
500 meter exclusion zone, and this had saved many lives when
the tsunami hit.


7. (C) Kumaratunga added that Sri Lanka was in greater
danger now because the chance of a nearby earthquake had
increased. Ambassador said that after the President had
mentioned this during her conversation with former Presidents
Bush and Clinton, and specifically the existence of a new
fault line 300 kilometers east of Sri Lanka, we had contacted
the US Geological Survey. Geologists there had told us they
knew of no such new fault line, but would look into it
further, and had sent us a map detailing the faults in the
area off the coast of Sumatra. Ambassador presented
Kumaratunga a copy of the map. Kumaratunga was quite
interested, and asked if we could get any further
information, which Ambassador promised to try to do. ACTION
REQUEST: Would appreciate if Dept could work with USGS and/or
other applicable USG agencies to provide some material for
President Kumaratunga.


8. (C) Ambassador said that another problem slowing up
reconstruction was imposition of customs duties on
reconstruction supplies and slow clearance from the port. He
had discussed this several times with Finance Secretary PB
Jayasundera, and some progress had been made, but the
situation was still not satisfactory. USAID grantees, for
instance, were still having problems clearing their goods and
were being asked to pay VAT, in contravention of a
decades-old agreement between our two governments.


9. (C) Kumaratunga said she was aware of this problem also.
Some of the duties imposed were correct, she said. For
instance, with the rice harvest about to begin in Sri Lanka,
they would not allow duty-free entrance of rice. She asked
Ambassador to send her a letter detailing the specific items
which USAID grantees were unable to clear, and she would see
that they were taken care of. Ambassador responded that he
would send such a letter, but the real issue was not specific
items, but the overall policy.


10. (C) Ambassador then said that the course of the
conversation had highlighted a major organizational problem
in the reconstruction effort. There were a number of GSL
agencies involved--TAFREN, TAFROR, the line Ministries, the
Government Agents in the field--but there was no one person
in overall charge except the President. She had mentioned a
number of cases where she had to make the decision. There was
no way that she could spend all of her time on reconstruction
and still run the country. Donors could not call her three
or four times a week, every time they needed a problem
resolved. President acknowledged the problem, but said that
donors should contact TAFREN head Mano Tittawela when they
had overarching problems. Ambassador responded that Mano, as
competent as he was, could not give orders to others such as
Finance Secretary Jayasundera. Perhaps she could appoint
someone with Ministerial rank in overall charge who could
make things happen. Kumaratunga thanked Ambassador for
raising this and said she would think about appointing
someone--musing that perhaps it should be Finance Minister
Amunagama.


11. (C) Ambassador then discussed issue of a "joint
mechanism" with the LTTE for reconstruction efforts in North
and East. Report follows Septel.


12. (C) COMMENT: Our guess is that this is the frankest
assessment CBK has received from anyone. Entire discussion
was held in a friendly, cooperative and problem-solving
manner. We hope President will now intervene to see that
land for transitional shelter is allocated more quickly.
Unfortunately, she seems adamant on 100/200 meter exclusion
zone. Appointment of a Ministerial-level figure with some
political weight as a "reconstruction czar" would be useful,
if she does it--and if she appoints the right person. We are
not sure the Finance Minister has the assertiveness needed
for the role. President needed to hear these points, and she
has. We will now see what she does with them.


LUNSTEAD