India expresses concern over huge Chinese housing project in NE

Questions about competence of the company and large presence of Chinese workers

India has raised concern at the highest levels of the Sri Lankan Government about the manner in which a contract to build 40,000 houses in the North and East was recently awarded without tender to a Chinese company that has no history of building houses in the country.

The Resettlement Ministry last month secured Cabinet approval for China Railway Beijing Engineering Group Co Ltd and its country representative Yapka Construction ( Pvt) Ltd to construct 40,000 prefabricated concrete houses for the war-affected in the North and East. They are the same parties selected by the Disaster Management Ministry to build 10,000 houses for landslide victims.

However, the Sunday Times learns that the Indian Government has questioned the decision to give the hefty tender-- which is likely to see Chinese labour spread across the North and East--to a company that has “not even built one house yet in Sri Lanka”. It has also been queried how a company which is unfamiliar with conditions in those areas, including that of the soil and weather, could be given the contract without a comprehensive study.

The Indian Government has not raised issue about the granting of Cabinet approval to build 25,000 brickand-mortar houses to a consortium of humanitarian agencies led by UN Human Settlements Programme (UN-Habitat), the UN Office for Project Services ( UNOPS), Habitat for Humanity Sri Lanka and the Sri Lanka Red Cross Society.

One of the main qualifications the Resettlement Ministry seems to have considered is that the Chinese company was also awarded a deal for 10,000 houses in Badulla. However, only a model house has still been built. And that contract, too, was not given through a tender process.

The projects will be funded through private commercial loans at a base price of Rs 1.28mn a house.

New Delhi has particular interest in ensuring that projects in the North and East are genuine because of the physical proximity of those areas to India, political analysts said. It is also not known how much of Chinese labour will be involved and this has raised worries in addition to the fact that a contract was awarded in a “strange manner” to a company with no track record in Sri Lanka.

The Resettlement Ministry, which is promoting the project, is banking on Tamil National Alliance (TNA) support to push it through. Officials took four TNA MPs to Badulla in March this year to inspect the model house.

Subsequently, TNA Leader R Sampanthan issued a letter to Resettlement Minister D.M. Swaminathan stating that, “The MPs are satisfied with the house constructed using new technologies and they are of the view that this type of houses [sic] are suitable to the environment and acceptable to the people of the Northern and Eastern Provinces.”

However, Mr Sampanthan said yesterday that the TNA was not informed that it was a Chinese project. Nor was it made aware of any other details. “It was initially recommended as an alternative to the (metal) prefab houses,” he told the Sunday Times. “Some of our MPs went and saw model houses in the upcountry areas and seemed to be satisfied.”

“But now we have been informed that it’s a Chinese project and there are also some questions being raised with regard to the raw materials to be used,” he continued. “This is a matter of concern to us, something we were not aware of at the time our MPs went and saw the houses. We will see how it goes.”

The precast ALC concrete panel is to be made overseas and imported. However, the Resettlement Ministry has decided to establish two factories to produce the panels and other housing materials to be used for the projects throughout the North and East. Land has been identified for this purpose in the Mankulam and Batticaloa areas and the authorities hope to use fly ash from the Lakvijaya coal power plant to manufacture the concrete panels. This prompted protests by concerned locals in the East this week. The protesters said the ash was toxic.

India has funded 50,000 houses in the country on a grant basis. Of these 46,000 went to the North and East and 4,000 to the upcountry. Another 10,000 houses have now been pledged to the hill country.