India has voiced concern to Sri Lankan authorities about a housing project in the island’s Tamil-majority north and east, to be executed by a Chinese company, citing the Resettlement Ministry’s “lack of transparency” in choosing the builder.
According to a recent report in Sri Lankan newspaper Sunday Times , Indian officials have questioned the government’s decision to award a huge contract — to build 40,000 homes — to a Chinese company, reportedly without a fair tendering process. In May, Sri Lanka’s Resettlement Ministry obtained Cabinet clearance for the project, which involves China Railway Beijing Engineering Group Co. Ltd and its local representative, to construct 40,000 prefabricated concrete houses in the island’s war-affected areas.
The Indian mission has not commented on the issue formally, but sources in Colombo confirmed that top officials had flagged the issue in government and political circles. They particularly raised the “opaque” manner in which the Ministry finalised the project, apparently “excluding” experienced companies from India that would have been interested.
India has been a key player in post-war housing in Sri Lanka. Its owner-driven scheme of 46,000 homes across the north and east is nearly complete. Additionally, it is building 14,000 houses in the central highlands — which is home to several thousand tea estate workers whose ancestors hailed from India — and 1,200 houses in the Southern Province. The projects are being executed with a grant totalling nearly $400 million.
This is not the first time the Resettlement Ministry has been in news for its housing projects. D.M. Swaminathan, the Resettlement Minister, earlier faced strong opposition for involving Luxembourg-based steel giant Arcelor Mittal to build 65,000 prefabricated steel homes for the war-affected communities, at a cost of LKR 2 million each (roughly ₹8.5 lakh). The project was subsequently withdrawn in the face of mounting resistance from locals and engineering experts, who found it unsuitable and exorbitant.
Source of funding
In a statement, Mr. Swaminathan said on Monday that the Cabinet-cleared project came with a 100% financing option from the company, and was likely to be completed fast, in two years. The project, according to an earlier Sunday Times report, will be funded through private commercial loans at a base price of LKR 1.28 million per house. “We have also negotiated the setting up of two factories in the north and east to produce the materials required for construction... this would employ at least 5,000 people in construction labour and about 2,000 people in the factories,” the Minister said, adding that the Ministry of Disaster Management had roped in the same company to build 10,000 houses in the country.
According to the official data, as many as 1,65,000 houses are required in the north and east, where thousands of families lost all their property in the incessant and indiscriminate shelling during the protracted civil war. Locals have sought brick-and-mortar housing that are suitable for their warm climatic conditions, and have been pushing for initiatives that will generate local employment.
