confusing signals are emanating regarding the construction of a controversial power plant in Sri Lanka's central hills. The government recently said Japan had approved funding for the Upper Kotmale project. Japanese officials say the sanction is on hold. Meanwhile, environmental concerns linked to the project remain unresolved.

On December 12, 2004, the Sunday Observer quoted P Weerahandi, secretary, power and energy ministry, saying that the Japan Bank for International Cooperation (jbic) had agreed to provide us $297 million loan for the 150 megawatt project. But Shinya Ejima, jbic's chief representative in Colombo, told Down To Earth: "We have still not approved the project as the government has not discussed the changes yet.' He had earlier said the funding would be in jeopardy if project designs were changed to suit political and environmental considerations.

The Upper Kotmale project has been marred by controversy for the past three to four years (seeDown To Earth,