Earlier this year the Government of Ceylon, after consultation with the Canadian High Commissioner, put forward in programme form a number of requests for assistance under the Colombo Plan, to be financed from the 1956-57 Parliamentary appropriation. The total cost of the projects included in the programme amounted to approximately $2.5 million. This programme was examined in detail by the Interdepartmental Committee on the Colombo Plan and was reduced to $2.0 million, which is approximately the same size as last year's programme. This $2.0 million includes an allocation of $80 thousand for additional equipment for the Colombo airport which has already been approved by Cabinet (on August 29, 1956).²² The projects which are now recommended to the Cabinet for approval are those described in the following paragraphs:

(1) Continuation of the Aerial Survey. On June 8, 1955, Cabinet approved of a proposal that a Canadian firm should be given a contract to carry out an aerial survey of Ceylon.²³ Authority was given for a contract to be let for the then estimated total cost of the survey, $500 thousand. $200 thousand was allocated out of 1955-56 funds on the understanding that Ceylon would put forward a request in 1956-57 for the remaining $300 thousand with the highest priority in their programme. It would appear that no new Cabinet authority is needed for the allocation of $300 thousand out of 1956-57 funds, but authority is needed for the allocation of a further $36 thousand which it is now estimated will be required in order to make proper use of the information provided by the survey. The additional $36 thousand is required to meet the costs of technical assistance to the Ceylon authorities which can best be provided by the Canadian contractors.

(2) Diesel Locomotives. Canada has already supplied eight diesel locomotives to Ceylon. They now ask that a further two be provided at a cost of $370 thousand. The United States is supplying 15 diesel locomotives this year under its new aid programme. It would appear that the further provision of diesel locomotives would be a suitable Canadian project in view of the pressing need for improvement and expansion of transportation facilities in Ceylon.

(3) Equipment for Agricultural Stations and Schools. Canada has already provided equipment for 35 agricultural equipment shops. Additional equipment is now requested for shop and maintenance facilities for the tractor pools which are being established throughout the food growing areas in Ceylon. The Ceylon authorities originally asked for $150 thousand for this project, but $35 thousand remains unspent from the allocation under which Canada supplied maintenance equipment for the agricultural shops. The Ceylon authorities have been told that Canada would not consider an allocation for the tractor shops of more than $115 thousand, plus the carry-over of $35 thousand.

(4) Auxiliary Power Plant for Fisheries By-Products Factory. The most substantial project carried out by Canada in Ceylon is the Fisheries Cold Storage Plant and Fisheries By-Products Plant. It has now become clear that in order to make the most effective use of this plant it will be necessary to provide an auxiliary power supply to prevent spoilage when the electricity supply is interrupted. The Ceylon authorities consider this plant an urgent necessity. Its cost is estimated at $30 thousand.

(5) Pest Control Units. Ten pest control units have been supplied to Ceylon by Canada as a pilot project and are only part of the quantity originally requested. These units are now considered to have been very successful and the Ceylon authorities therefore request that we provide an additional 10 units at a cost of $27,500.

(6) Electric Transmission Lines for Gal Oya. The original electric transmission line financed by Canada is now nearly completed. The next stage in the development of the power transmission system for the Gal Oya valley (where the Ceylon Government is endeavouring to accommodate and provide employment for population moved from the crowded parts of the Island) consists in the provision of a number of transmission lines to serve various establishments - a paper factory, a primary substation, two municipalities, and a sub-station to feed a further transmission line to an irrigation system power distribution station. It is estimated that the costs of these additional transmission lines would be $400 thousand. This project is recommended, subject to a favourable report being received from a Canadian expert who will shortly be investigating this project.

There are three further projects which involve costs which the Ceylon Government suggests be met by the provision of flour from Canada, the sale of which would provide counterpart funds. These projects are:

(7) Veterinary Building for University of Ceylon. There is no adequate building in which to provide for the teaching of veterinary science in the Faculty of Agriculture in the University of Ceylon at Peradeniya. The earlier course work in veterinary science is taught at the Faculty of Medicine in Colombo. The Ceylon authorities urge that as there is a site available at Peradeniya, where they propose to establish the Science Faculty of the University of Ceylon, and as the need is most urgent for a new veterinary building, the construction costs of a veterinary building be met by counterpart funds to be provided from a gift of Canadian flour. The Ceylon authorities estimate that the total cost of the building might not be more than $41,500.

(8) Local Costs of a Trade School. The Ceylon Government asks that the Canadian Government provide $200 thousand worth of flour, the sale of which would provide funds for the construction of a trade school building. It is proposed to indicate to the Government of Ceylon that the Government of Canada would give sympathetic consideration to a request to provide equipment needed for this school. It is proposed to provide instruction for six major trades: building, woodwork, electrical work, metal work, motor mechanics, and printing. It is anticipated that when the school is in operation there will be about 400 full-time students and 900 part-time students, with about 450 students graduating each year. Given the need for the expansion of technical training in Ceylon, this seems a most desirable project.

(9) Rural Road Construction. Assistance has already been provided by Canada over the past two and one half years to the Ceylon rural road programme to the extent of $700 thousand by the provision of flour which generates counterpart funds. A check has recently been made concerning the amount of these counterpart funds that have been spent on rural road construction by the Ceylon Government, and it is evident that only a small portion remains unspent or uncommitted. A particular feature of the programme is that the Ceylon village population is encouraged to donate labour and land to the road construction. It is estimated that the value of labour and land donations has now reached $500 thousand. The road programme has been an almost entirely Ceylonese-Canadian project from its beginning. The Government of Ceylon, which is determined to push forward with this programme, hopes that it will be continued by Canada rather than by any other country. Present plans call for a further expenditure on rural roads of $400 thousand and it is clear that counterpart funds from the sale of flour are required to finance this construction which could otherwise not be undertaken by the Ceylon authorities.

It will be noted that the Ceylon Government's request for flour to generate counterpart funds to meet local costs for the three projects listed as (7)(8) and (9) above amounts to $641,500, which is slightly less than that provided last year. As Australia is the main exporter of flour to Ceylon, the Australian Government has been consulted and has indicated that it would have no objection to the supply of this flour to Ceylon.

The amount required for all of the above projects totals $2 million (including $80 thousand already approved for additional equipment for the Colombo Airport). A number of other projects have been considered by officials and discussed with the Ceylon authorities but are not recommended for inclusion in the 1956-57 programme for a variety of reasons. Projects which are not recommended include the provision of mechanical handling equipment for the Port of Colombo; equipment for a soil laboratory; the provision of duplicating sets; and the provision of milk collection vehicles and tanks.²⁴

L.B. PEARSON