Millennium Challenge Corporation’s (MCC) Compact with Sri Lanka is only dealing with weak transport infrastructure and poor land administration practices and it has not intended to acquire land in the island, US diplomatic sources revealed.
MCC board of Directors has approved a five-year, $480 million Compact with the Government of Sri Lanka aimed at reducing poverty through economic growth.
The Compact seeks to assist the Sri Lanka Government in addressing two of the country’s binding constraints to economic growth: (1) inadequate transport logistics infrastructure and planning; and (2) lack of access to land for agriculture, the services sector, and industrial investors.
The Transport Project aims to increase the relative efficiency and capacity of the road network and bus system in the Colombo Metropolitan Region and to reduce the cost of transporting passengers and goods between the central region of the country and ports and markets in the rest of the country.
The goal of the Land Project is to increase the availability of information on private land and underutilized state lands or all land in Sri Lanka to which the Government is lawfully entitled or which may be disposed of by the Government (“State Lands”) in order to increase land market activity.
The Land Project would increase tenure security and tradability of land for smallholders, women, and firms through policy and legal reforms.
The $350 million transportation 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 $67 million land administration project has an estimated economic rate of return of 30% 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.
The US Government will not buy, sell, or own any actual land -- or take control of any actual land -- under this agreement
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