India voices concern over housing project

India has voiced concern to Sri Lankan authorities over 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.

The Indian mission has not commented on the issue formally, but sources in Colombo confirmed that top officials had flagged the issue. 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’s 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. The projects are being executed with a grant totalling nearly $400 million.

Source of funding

In a statement, D.M. Swaminathan, the Resettlement Minister, 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.

According to official data, as many as 1,65,000 houses are required in the north and east. 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.