By Prof. Mano Kumarasuriyar
Much has been said and written about the 65,000 houses programme being proposed by the Government. Its critics claim it to be an improperly conceived national expenditure with relatively high opportunity costs. On the other hand, its proponents, the Ministry of Rehabilitation and Resettlements, in particular, say those who criticise the project are ignorant of the reality and unaware of the ground conditions. It is, therefore, necessary to examine the project with the intention of facilitating sensible decisions since such a high profile matter is bound to impact significantly on many thousand households in the North and the East.
As at March 2016, some 70,000 odd war-displaced households have been settled thanks to several international donor-driven programmes implemented over the past six years. Another 3,000 more are to be settled within the next year. This, however, falls far short of the target of resettling all those who had been displaced by the war. The shortage has been estimated to be around 135,000, some of whom are still languishing in refugee camps while others have returned to their own lands to be sheltered in temporary shacks made mostly of material salvaged from refugee camps.
It is in this backdrop that the Government’s 65,000 houses programme is to be contracted out to a French company, ArcellorMittal. In this programme, each housing unit, made of steel frames, claddings and roofing, is said to cost Rs.2.1million. The basic houses constructed thus far with international donor assistance cost a maximum of Rs. 550,000 each. These conventional houses were built of cement blocks or clay bricks and clay tiled roofs with timber doors and windows. The recipients of these donor-funded houses may spend their own money to expand the houses and, may even add elements of luxury such as glazed tile floors or ornamental door sashes.
It has been speculated that the ArcellorMittal housing programme beneficiaries would also be receiving semi-luxury household furniture and furnishings, solar power assembly, gas cylinders and stoves for cooking, flat-screen TV, computers and Wi-Fi connections among other goodies. The total housing costs of the 65,000 houses are to be borne by the Government of Sri Lanka through a seemingly attractive financial package offered by ArcellorMittal. The US$1 billion (Rs.140 billion) low-interest loan is to be paid back over ten years with a grace period of one year.
On analysing the MIttal proposal it becomes evident that there are three specific aspects that may have influenced the Government to give the proposal serious consideration.
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