Document of The World Bank FOR OFFICIAL USE ONLY Report No: 84090-LK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SUSTAINABLE TOURISM DEVELOPMENT PROJECT CREDIT BOARD APPROVAL DATE MAY 13, 2010 TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA JANUARY 30, 2014 FINANCE AND PRIVATE SECTOR DEVELOPMENT SOUTH ASIA REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS GOSL Government of Sri Lanka IDA International Development Association MG Matching Grant PDO Project Development Objective SDR Special Drawing Rights STDP Sustainable Tourism Development Project SME Small and Medium Enterprise Regional Vice President: Philippe H. Le Houerou Country Director: Francoise Clottes Sector Manager: Henry Bagazonzya Task Team Leader: Sriyani M. Hulugalle 2 SRI LANKA SUSTAINABLE TOURISM DEVELOPMENT PROJECT CONTENTS Page A. SUMMARY ........................................................................................................................... 4 B. PROJECT STATUS .............................................................................................................. 4 C. PROPOSED CHANGES ...................................................................................................... 4 D. APPRAISAL SUMMARY.................................................................................................... 5 ANNEX 1: RESULTS FRAMEWORK AND MONITORING ................................................. 6 ANNEX 2: REALLOCATION OF PROCEEDS ......................................................................... 8 ANNEX 3: EXTENSION OF CLOSING DATE ......................................................................... 9 3 SUSTAINABLE TOURISM DEVELOPMENT PROJECT A. SUMMARY The Government has requested that the remaining unutilized project funds be cancelled as the priorities of the Government have changed. The on-going Dam Safety Project could not cover the North and Eastern Provinces due to the conflict and after the cessation of hostilities the Government would like to use the funds assigned for providing Matching Grants and training for the tourism related private sector to a more priority area of dam safety operations in the North and East. Therefore all the remaining unutilized funds (SDR 11,477064.60) are cancelled to be subsequently reallocated to the Dam Safety Project. B. PROJECT STATUS The Project originally expected to provide tourism related infrastructure for the Eastern Province, redesign the institutional framework, enhance skills development and provide Matching Grants to the tourist related private sector. However, with the cessation of hostilities in the North and Eastern Provinces, the Government had access to substantial funds locally and from overseas for infrastructure development and the Government requested that the funds be reallocated to the Matching Grant components to provide funds to the private sector to leverage investment in the tourism related Small and Medium enterprise sector and the Project was restructured in October 2012. In 2013 May, the Matching Grant Scheme was launched and the applications closed in June 2013. Subsequently the Government informed the Bank in October 2013 that the funds should be reallocated to the Dam Safety project for activities in the North and East as the priorities of the Government have changed. The Government refunded the remaining funds in the designated account back to IDA in November 2013. 4 C. PROPOSED CHANGES  Financing  Project Costs Project Costs per component Components/Activities Current Proposed (US$m.) (expressed in SDR) 1. Enhancing institutional framework 1.5 - 1.1 Establishing sustainable centers of excellence and increasing the accreditation 1.2 Promotion of product standard approved by the SLTDA 2. Tourism related Infrastructure Cancelled - 3. Support to Sustainable Tourism Business 16.0 8,143.72 Model (Matching Grants) 3.1 Establishment of a Matching Grant facility 3.2 Matching Grants 4. Incremental Operations Cost 0.5 100,313.72 Cancellation as on October 29, 2013 - 10,089,570.45 Cancellation as on November 26, 2013 1,387,494.15 Cancellation as on December 17, 2013 14,477.96 Total 18.0 11,600,000.00 Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised (1) Goods, works (1) Goods, works and and consultants’ consultants’ services under 902,200 8,143.72 100% 100% services Part 1 of the under Part 1 Project of the Project (2) Consultants’ (2) Consultants’ services services under under Part 3 (a) of the 64,500 _ 100% _ Part 3 (a) of Project the Project (3) Grants under (3) Grants under Part 3 (b) of Part 3 (b) of the 10,311,100 _ 100% _ the Project Project (4) Incremental (4) Incremental Operating Operating Costs 322,200 100,313.72 100% 100% Costs (5) Cancellation as on October 29, 10,089,570.45 2013 5 (6) Cancellation as on November 1,387,494.15 26, 2013 (7) Cancellation as on December 17, 14,477.96 2013  Cancellations: At the request of the Government all the remaining unutilized funds will be cancelled. (SDR 11,477,064.60)  Closing date: Closing Date will be advanced to January 31, 2014. 6