The impact of ground water depletion on land values in the affected areas of Uma Oya multipurpose development project
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Date
2017-10-12
Authors
Rathnasooriya, S. I.
Wijewardana, I.
Journal Title
Journal ISSN
Volume Title
Publisher
University of Peradeniya
Abstract
Introduction
The controversial Uma Oya multipurpose Development project (UOMDP) in Uva Province, Sri Lanka which commence the constructions in 2012, is proposed to divert water from Uma Oya to Kirindi Oya in order to develop hydropower, drinking water and to irrigate the dry and less developed Uva and southern regions of the country. The expected capacity of the electrical power generation of this project is 120 MW and it was estimated to have irrigation of approximately 25,000 acres of paddy lands.
The project is facing an unforeseen setback as major water seepages has developed in the main underground tunnel runs from Dyaraba Dam to Karadagolla. The first massive water leak into the tunnel began in 2014. That was only a few months since the underground drilling of the tunnels began. Water, at the beginning, was flowing at a speed around 500 liters per second. The second water leak began in June 2017. It is estimated that 976 liters of water is seeping into the tunnel every second. As a result of drastic decrease of ground water table in the area due to continues water seepage in to the tunnel, estimated number of 7,030 buildings, including houses, business places and religious places, have been damaged (approximately 2,000 building completely damaged). At the same time 3,112 wells, streams and water ways have dried up. These belongs to five divisional secretariat regions – Uva Paranagama, Welimada, Hali Ella, Bandarawela and Ella. Thus, people in more than 30 villages have been affected adversely with no safe drinking water, housing and means of livelihoods, mostly agriculture, including tea, vegetable, fruits, minor export crops and cut flower farming.
Objectives
This paper describes the finding of a study conducted, in selected villages from affected areas due to water seepage of the UOMDP, to examine the impacts of increased water scarcity on land market price.
Methodology
The methodology for analysis the data is quantitative. Ten affected villages as shown in the Table 1 selected for this study and 10 villagers from each selected village also selected arbitrarily for informal interviews. During the interviews prices of the agricultural, commercial (suitable for business purposes) and residential (suitable for housing purposes) land plots before the commencement of UOMDP and after the arise of water scarcity issue due to UOMDP were gathered. These collected price figures utilized to build the discussion of this study and standard formulas derived from the literature used to calculate the total land value loss or gain of the 10 villages. Total land area used in this study in each village is given in Table 1.
<Table 1 -Total approximate land area in the selected villages>
The prices of land plots (per perch) for each land category for each village has taken by calculating the average value using the figures given by each individual interviewed.
Results and Discussion
It is obvious that the construction work of the Uma Oya project, already completed one-third including the tunnel, has created social, economical, ecological and geological issues in 10 villages in Bandarawela. Due to the ad hoc development project, people in these villages have faced serious issues. A growing number of complaints on the damages to houses and drying up wells and springs have made the Government cease construction of the Rs.76.3 billion Uma Oya project temporarily time to time. Villagers and environmentalists claim that the present disastrous situation is created due to the ad hoc decisions by the short sighted politicians. Given this background, we investigate the impact of this project on land prices in the affected area.
As shown in the below Table 2, prices of agricultural, commercial and residential land plots in the selected villages before the commencement of UOMDP and after the arise of water scarcity issue due to UOMDP collected.
<Table 2 - Prices of land categories before and after the affects>
However, it was difficult to find the land area belongs to each land category in each and every village though total land area for each and every village was available. Therefore, calculation was done assuming 80 % land area of every village belongs to all three land categories and 20 % land area has no value in order to find the total economic lose. Accordingly, the average land price for each village was calculated as follows.
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<Table 3:Estimated total land values before and after the affects>
Conclusion and Policy Implications
The purpose of this research is to throw light on one problem that is emerging due to unplanned development activities implemented in haphazard manner, damaging environment, especially land resources.
According to the calculation, agricultural, commercial and residential land prices has reduced by 58 %, 18 % and 28 % consecutively. Accordingly, the biggest loss has incurred to the agricultural lands. Yet, falling of the market for residential and commercial lands in the villages would be stop for some extent by providing pipe born water to the villages. However, increase the price for agricultural lands cannot be guaranteed if the solutions to stop water seepages to the tunnel couldn't regenerate and improve the water table in the area as hoping. Providing irrigation water to all the affected areas are also impossible due to the diverse geography and topography of the region. According to approximate calculations, the total land value loss due to the water loss is Rs. 6,248,888,266.67 (RS 6.24 billion) approximately. Even only from these 10 villages, this loss is a colossal economic loss to the country.
According to the project of UOMDP, the total project cost is Rs. 76,316,307,770 (Rs. 76.31 billion). Thus, this loss is about 8.1% from the total project cost. Therefore, the total loss could go beyond the total project cost if the total land value loss calculated for all the affected areas. Considering that, if all physical, biological and sociological loss of the UOMDP calculated, that total loss can go beyond many times than total project cost. Therefore, further studies need to be conduct using accurate property valuation methods and covering all the affected villages.
References
Athukorala, W., Wilson. C. and S. Managi. (2017). Social Welfare losses from extracting groundwater for small-scale agriculture in Sri Lanka: a major environmental concern, Journal of Forest Economics, 29(S): 1-20
Chamikara, S. 2015. Uma Oya Project and its Impact for People in Uva, Movement for Land and Agricultural Reform.
Environment Impact Assessment Report. 2008. Uma Oya Multipurpose Development Project (UOMDP), Ministry of irrigation and water resources management.
Cooray. P. G. 1984. An introduction to the geology of Sri Lanka (Ceylon), 2nd edn. Colombo National Museums Department, 340
Weerasekara et al. 2009. Comparison of physico-chemical parameters of Uma Oya and Badulu Oya sub catchment with special reference to the water pollution, 65th Annual sessions of SLAAS.
Description
Keywords
Groundwater depletion , Development , Land value
Citation
Peradeniya International Economics Research Symposium (PIERS) – 2017, University of Peradeniya, P 87 - 92