PM-headed committee to devise procedures for NE housing project

The Cabinet has mandated the setting up of a committee headed by Prime Minister Ranil Wickremesinghe to submit procedures for financing and implementing an initiative to build 25,000 brickand- mortar houses for the war- displaced through a consortium of humanitarian agencies.

The project is to be led by United Nations Human Settlements Programme ( UN- Habitat), the UN Office for Project Services (UNOPS), Habitat for Humanity Sri Lanka and the Sri Lanka Red Cross Society. The Cabinet first approved the effort--proposed by the Ministry of National Policies and Economic Affairs-- in May this year but implementation has been pending since then.

“The Cabinet has approved the setting up of a committee headed by the Prime Minister and including Reconciliation Minister Mano Ganesan, Opposition Leader R. Sampanthan and others,” said M.Y.S. Deshapriya, Reconciliation Ministry Secretary. “This committee will submit the procedures for implementation.”

Financing for the project is likely to be from the Government, Mr Deshapriya added. The Government’s housing project for the war-displaced in the North and East is already years late. Months were squandered push- ing for unpopular prefabricated dwellings from French steel giant ArcelorMittal. This initiative was only recently abandoned. Economists pointed out that it was just as well because the depreciation of the rupee against the dollar would have made the foreign- funded project wholly untenable.

The consortium of humanitarian agencies, as an alternative, offered three housing options to the Government. The first costs Rs 1,099,500 per house; the second Rs 1,117,700; and the third Rs 1,116,800.

Their prices and financing terms-they were to have obtained loans from a local bank--were found to be “very much advantageous to the national economy” (nearly 50 percent of those of other bidders). They have pledged to use local labour, materials and small contractors to benefit the local economy and communities.

With the Government’s latest decision to fund the project, it remains uncertain what the financing terms will be. The line ministry for the initiative will be the Reconciliation Ministry.

“If the Treasury is to back the project, the implementing agencies could have concerns about the flow of money to carry out an initiative of this nature,” an NGO source said.