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Asian development bank water project : Sri Lanka, Thailand, Pakistan, Nepal

Sri Lanka

The Government of Sri Lanka is receiving a $10.7 million loan from the Asian Development Bank to improve the management of water resources. This is part of a scheme promoted by the World Bank and the Development Bank to stop farmers growing non-export food crops and to start charging farming families for irrigation water. Both farmers and the poor will be forced to sell their water rights to high value sectors such as export food crops, industrial sectors or modern economic sectors in urban areas.

In 2000 ministers approved a ‘National Water Resources Policy’. Its major recommendation is that all the water resources should rest with the government. Once implemented every user of water will have to pay for their water entitlement. This is only one step towards transferring the ownership of water resources to international companies so they can make profits through distribution. Historically, water has always been regarded as the common property of the Sri Lankan people. The State is only a guardian. However, about 12 foreign companies have already visited Sri Lanka and held international workshops to explore business opportunities with water.

Paddy cultivation will be seriously affected if water is issued as a commodity on the market. The World Bank has advised the government that paddy cultivation in Sri Lanka is a non-profitable venture and recommended the diversification of agriculture into cash crops. Making water a commodity and fixing a market price amounts to taking away the livelihoods of the urban and rural poor, as well as farmers, animals and plants.

Visit the website of the Sri Lankan Environmental Foundation Ltd


In Thailand, the Asian Development Bank’s $600 million Agricultural Sector Program Loan demands fundamental reforms of national water policy, despite possibly contravening the Thai constitution.

The Asian Development Bank called for:

  •     a National Water Resources Policy;
  •     a Water Law;
  •     a policy on cost recovery in irrigation;
  •     an increase in National Water Resource Committee’s authority in managing water resources nationwide;
  •     river basin organizations in three pilot river basins;
  •     the privatization of the irrigation system so that farmers pay for the costs of private water management.

The Thai government has been required to use the free market model. Groups who can make a high profit from water are given priority in access to water resources. Farmers, who do not generate much profit from water, are given the lowest priority.

In drafting National Water Resources policy, the National Water Resources Committee obtained technical assistance from consultant companies hired by the Asian Development Bank and some committee members had close relationships with consultant companies hired by the Asian Development Bank. The decision-making was processed behind closed doors. Put simply, the direction of National Policy on Water Resource was determined by the Asian Development Bank.


The Government of Pakistan, with the help of the Asian Development Bank, set up the Water Resources Strategy Study. It was undertaken by the Ministry of Water and Power, the Office of the Chief Engineering Advisor and the Chairman of the Federal Flood Commission. The Study’s main objective was to prepare a road map for the future development of the water sector towards more efficient service delivery and the optimum utilization of resources to meet the competing demands of all water users in the future.

The Strategy and the Medium Term Investment Plan prioritize fairness in water allocation, improving and maintaining the quality of water, the conservation of the country’s water resources and the need for efficiency and financial sustainability in water service delivery. These terms mean privatization and full-cost recovery – higher tariffs for the consumer.

The privatization of Karachi ‘s water supply

The government has pointed to the massive losses that the public sector makes; and the World Bank has stressed quite correctly that it is the poor who bear the burden of these public sector losses because Pakistan have a very regressive taxation system. However, the only thing that Government can do is to bring in the private sector and replace public corruption with private profit.

If the Government guaranteed similar profits and salaries to the public sector, it would do just as well. Pakistan ‘s main problem is a lack of public funding as an enormous share of the budget, over a third of it, goes to the military. Another third or more goes to debt servicing and the remainder is for running the government. So the only way the Pakistani government can get the money it needs is through the private sector.


The Asian Development Bank has approved $1.4 million technical assistance grant to support water and sanitation sector reform in Kathmandu Valley. It includes the establishment of the National Water Supply Regulatory Board and the Kathmandu Valley Water Authority, and a private sector participation scheme.

The Nepal Water Supply Corporation says the Asian Development Bank has failed to supply efficient and affordable services or significantly to expand its service coverage for residents of the Kathmandu Valley. The Asian Development Bank project in Nepal is pushing for implementation of cost recovery, water costs and charges, and privatization.

Private management of the Nepal Water Supply Corporation would increase the price of water five-fold by the time water starts flowing in the pipes of Kathmandu.

Visit the website of the Nepali Friends of the Earth group, Pro Public

Find out more about the asian development bank.

Source: P. Raja Siregar (2003) “World Bank and ADB’s role in privatizing water in Asia Region” presented at the Asia Pacific Conference on Debt and Privatization of Water and Power Service , held by Jubilee South/APMDD, in Bangkok 8-12 December. P. Raja Siregar is Coordinator of KAU/ Anti Debt Coalition-Indonesia. The author also works with WALHI (Friends of the Earth Indonesia) as Policy Campaigner.