Cyclone Ditwah: US $ 4.1 billion damage, replacement cost even higher

Cyclone Ditwah, which struck Sri Lanka in late November, has caused an estimated US $4.1 billion in direct physical damage to buildings and contents, agriculture and critical infrastructure, according to a World Bank Group Global Rapid Post-Disaster Damage Estimation (GRADE) report released . This damage is equivalent to about 4 percent of Sri Lanka’s GDP, the World Bank said.

It is one of the most intense and destructive in Sri Lanka’s recent history, and severely affected close to 2 million people and 500,000 families across all 25 districts, disrupting livelihoods, essential services, and the broader economy, the World Bank said.

According to the World Bank, the estimated US$4.1 billion in direct damage represents a significant shock to affected regions. The Central province was the hardest hit, with damages in Kandy district estimated at $689 million, primarily caused by flooding and to a lesser extent by landslides.

The World Bank has assessed the damages in this regard.  But, the replacement cost is going to be much higher, and that is the amount Sri Lanka needs in the post disaster economic rebuilding process.  Currently, the Finance Ministry, backed by other relevant agencies such as the Disaster Management Centre (DMC), is in the process of doing the Post Disaster Need Assessment (PDNA). That is to ascertain the exact amount of financial requirements to cover the replacement cost.

Earlier, Commissioner General of Essential Services Prabath Chandrakeerthi said that the replacement cost would be roughly in the range of US $ 6-7 billion.  In the wake of the latest World Bank announcement on the estimated damage, he said the replacement cost would reach the initial assessment

The cyclone that made landfall on November 28 unleashed torrential downpours that triggered landslides and floods.  

Infrastructure, including roads, bridges, railways and water supply networks, accounts for the largest share of damage, at an estimated US $1.735 billion (42 percent of total damages), disrupting connectivity and access to markets and services, the World bank said.

Residential buildings and contents have been heavily affected, with damages totaling an estimated $985 million. The widespread impacts on homes highlight the need to consider building locations, flood control structures and designs that are resilient to high winds and flooding.

Agriculture suffered an estimated US $814 million in damage, including to paddy and vegetable crops, subsistence farming, maize, livestock and agriculture infrastructure, as well as damage to inland fishing, posing serious risks to food security and rural livelihoods in already vulnerable communities.

Non-residential buildings (including contents), such as schools, health facilities, businesses, and large industrial facilities and factories located along major rivers and creeks, were also heavily impacted, accounting for $562 million in estimated damages, interrupting education, healthcare delivery, and local economic activity in cyclone-affected areas, the World Bank added.

Rebuilding now remains the challenge.  Infrastructures such as    highways and railways have to be rebuilt with risk –reduction measures.

The government is now exploring all possible avenues to mobilize money required for rebuilding at the moment. The Rebuilding Sri Lanka Fund has already been established to raise funds from donors. Corporate leaders have already made contributions.  

In response to the government’s request, the World Bank is making up to US$120 million in emergency support available by repurposing funds from ongoing projects.

The government is also seeking similar arrangements from other international organizations including the UN which have committed to carry out public investment projects.   Mr. Chandrakeerthi said he reached out to the UN and other organizations to make money available by repurposing funds from ongoing or committed projects.  

Like, during the 2022 economic crisis, India is the first country to respond to Sri Lanka’s rebuilding efforts.  In fact, Indian External Affairs Minister Dr. S. Jaishankar arrived in Sri Lanka on Monday. He announced US $ 450 million to Sri Lanka.  

 In his remarks to the press, he said, “Recognising the urgency of rebuilding, Prime Minister Modi directed that we now engage with the Sri Lankan Government to address their priorities in that regard. The assistance package that we have proposed is worth US $ 450 million. It will include US $ 350 million in concessional Lines of Credit and US $ 100 million of grants. This package is being finalized in close consultations with the Government of Sri Lanka,”

Earlier, President Anura Kumara Dissanayake sought assistance from China to rebuilding efforts, particularly the reconstruction of affected railway lines.    A new Chinese delegation has also arrived in the country at the moment.

Post –disaster reconstruction work is not easy given the enormity of damage.  Reconstructions should also be aligned with climate resilience. Highways slicing through the central hills should be landslides- resilient in the future.  A lot of investments are needed for smart –engineering measures.

Buildings should be resilient to high winds and flooding, as observed by the World Bank. Climate adaptation is a long discussed topic in the country.

With climate-related damages exceed Rs.50 billion annually   . As a result, financing climate action is central to Sri Lanka’s development agenda, according to the UNDP.

Climate sensitive sectors such as agriculture, forestry and energy should also be looked into further in future endeavors in this regard.  

Unchecked climate impacts could cost up to 15 percent  of the global GDP by 2050 under 2°C of warming, rising to 30 percent  by 2100 under 3°C. While global climate finance is growing, it needs to be accelerated. In 2023, USD 1.9 trillion was mobilized globally, with early estimates suggesting that 2024 flows surpassed USD 2 trillion for the first time. Yet, this falls short of the US $ 6.3 trillion needed annually to meet global climate goals between 2024 and 2030, according to the UNDP.

What lies before the government is a challenge of epic proportion.  First, it should come out with the Post Disaster Need Assessment. Once that is done only, the actual amount of financial requirements can be calculated.   Alongside, bureaucratic   hurdles should be removed to facilitate the rebuilding efforts.  

Sri Lanka is still recovering from the 2022 economic crisis.  The situation has been compounded worse by cyclone Ditwah. Speedy action is needed for recovery. There is no time left to be wasted.