at present pipe borne water supply coverage in the island is 44% and it is expected to increase it to 60% by the year 2020. The Government intends to engage local contractors with local Bank financing for capital investment in the sector and to significantly reduce the capital cost involved. The local contractors over the past few years have gained considerable experience in water supply projects, either working as Joint Venture Partners or Sub Contractors with Foreign Contractors. The proposal made by Hon. Dinesh Gunawardena, Minister of Water Supply and Drainage, to proceed with the programme by implementing 30 water supply projects at an estimated cost of Rs.29 billion, was approved by the Cabinet.