Economist prefers community-driven housing for war-torn North Sri Lanka

Economist prefers community-driven housing for war-torn North Sri Lanka

Colombo, May 27 (newsin.asia): The Jaffna-based political economist, Dr. Ahilan Kadirgamar, says that the best model for housing projects in the war-torn Northern Province in Sri Lanka is one where the houses are built by the local community with outside financial and technical assistance.

“The community housing scheme will provide employment and business opportunities to members of the local community and the cost will also be lower,” Kadirgamar told newsin.asia.

A member of the ‘Collective for Economic Democratization’  Kadirgamar  was commenting on the Sri Lankan cabinet’s decision to construct 65,000 houses in the North for the war-displaced, with 40,000 being done by a Chinese company and 25,000 by a consortium of UN organizations with UN Habitat providing the technical assistance.

While the 40,000 houses to be built by the Chinese will be financed by a Chinese loan and will be executed by contractors, the remaining 25,000 houses will be built by the community as a whole using its local labor and other resources, with financial and technical assistance from the local banks and UN Habitat.

The latter method works out to be cheaper besides saving foreign exchange, Kadirgamar said.

According to Sunday Times the contractors for the 40,000 houses are China Railway Beijing Engineering Group Co Ltd and its country representative Yapka Construction (Pvt) Ltd.

They are the same parties selected by the Disaster Management Ministry to erect 10,000 of these houses for landslide victims.

Each of the 650 sq ft concrete Chinese built house will cost LKR 1.28 mn (US$ 8000). They will be funded by 100 percent “soft loan” with 15-year repayment and a minimum two-year grace period, Sunday Times said.

Consent was also granted to exempt items imported for the construction of the precast houses from value added tax, port and airport development levy and nation building tax.

The National Building Research Organization (NBRO) is to be appointed as the technical consultant to the project at a concessionary fee.

The paper further said that a model Chinese house was shown to a delegation of the Tamil National Alliance (TNA) and that the latter had approved it.

The cabinet also gave the green light to a separate bid by a consortium of humanitarian organizations to build 25,000 traditional brick-and-mortar type permanent houses for the war-affected.

This group is led by the UN Human Settlements Program (UN-Habitat), UN Office for Project Services (UNOPS), Habitat for Humanity Sri Lanka, and the Sri Lanka Red Cross Society. The paper was presented by the Ministry of National Policies and Economic Affairs.

The consortium has offered three housing options to the Government. The first costs Rs 1,099,500 (US$ 6900) per house; the second costs Rs 1,117,700 (US$ 7072) per house; and the third Rs 1,116,800  (US$ 7066) a house.

The National Housing Development Authority (NHDA) engineers’ unit price estimate was Rs 1.52 million (US$ 9617) without VAT.

“Their prices and financing terms of the UN agencies were found to be very much advantageous to the national economy  They will use local labor, materials and small contractors to benefit the local economy and communities. There is also no foreign exchange outflow in terms of their financing proposals,” Sunday Times said.

END