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Cablegate: Sri Lankan Post-Tsunami Reconstruction Update (May

This record is a partial extract of the original cable. The full text of the original cable is not available.

181115Z May 05

UNCLAS COLOMBO 000914

SIPDIS

DEPT FOR EB A/S ANTHONY WAYNE; SA/INS FOR J. BRENNIG, N.
DEAN; PLEASE PASS TO TSUNAMI RECONSTRUCTION TASK FORCE;
TREASURY FOR C. CARNES

SENSITIVE

E.O. 12958: N/A
TAGS: EAID ECON PGOV CE MV
SUBJECT: SRI LANKAN POST-TSUNAMI RECONSTRUCTION UPDATE (MAY
18, 2005)

REF A) Colombo 890 B) State 91524

1. This cable provides updated information from Sri Lanka
for the May 18 post-Tsunami IAWG meeting.

Value Added Tax
---------------

2. (U) The Value Added Tax issue may be resolved.
Ambassador received a letter from Finance Secretary P.B.
Jayasundera over the weekend that provides a streamlined
solution for USAID and other USG contractors. Econchief and
Acting USAID Director will meet with Treasury officials next
week to try to finalize procedures and clarify a few points,
but we are cautiously optimistic.

Kandy Development Forum Tsunami Highlights
------------------------------------------

3. (SBU) We will report on the development forum septel,
but thought the following points would be useful for IAWG
consideration:

--Discussion of the 100m/200m coastal exclusion zone
highlighted both confusion within the government and
possible areas of flexibility. TAFREN Chief Mano Tittawella
indicated that flexibility could be shown in areas where
insufficient land was available, but Science and Technology
Minister Tissa Vitharana noted that the exclusion zone was a
temporary measure, until a more comprehensive coastal survey
can be completed. Ambassador asked how something could be
considered temporary once 50,000 families had been moved
into permanent shelter someplace else. No answer was given.
On the margins of the meeting, the Ambassador and Econchief
discussed the June 19 DVC with various participants and
believe there is keen interest in having discussions with
the USG on this issue.

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--There was universal support among the donor community for
the President's efforts to conclude a joint mechanism for
providing relief and rehabilitation services in the north
and east. We will report on the President's opening speech
septel, but she gave a determined, and somewhat emotional,
commitment to move forward with the mechanism in the near
future (points were similar to those made during her May 13
meeting with the Ambassador and DCM, reported Ref A). A
member of the all Buddhist monk party, the Jathaka Hela
Uramaya (JHU), interrupted proceedings for a brief moment
following the President's speech, calling on the government
to "destroy the LTTE airfield" and criticizing the
Government's willingness to deal with terrorists. During
donor representative interventions, all spoke about the need
for conclusion of a joint mechanism, both in practical terms
for facilitating the delivery of assistance, and for its
value as a concrete step that could help revive peace
negotiations.

--We had an initial discussion with the Central Bank on debt
relief during the forum, and they remain interested, but we
will need to review with them the points in ref b.

LUNSTEAD

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