A large area of forest east of Pallegama has been cleared for the construction of the dam and even more so for the construction of a new residential and agricultural colony east of the dam. The forest area cleared is adjoining Wasgamuwa National Park and linked the forests on the eastern side of Knuckles Mountain Range with the Wasgamuwa National Park. Elephants and other wildlife used to inhabit this area and used it as corridor. There are attempts to minimize environmental impact by reforesting catchment areas, and declaration of elephant corridors to Wasgamuwa, Girithale, Mineriya national parks.