Open letter to the Prime Minister on proposed 65,000 houses project in NE

3 February 2015

Honourable Ranil Wickramasinghe

Prime Minister of Sri Lanka

Honourable Prime Minister,

We welcome the initiative and responsibility embraced by your Government in deciding to construct 65,000 houses for war-affected communities in the Northern and Eastern Provinces of the country.

Apart from addressing much-needed housing needs, a project of this magnitude has the potential to create new opportunities for social mobilisation and stimulate the local economy. We therefore fully support the housing project in principle, but are compelled to draw your attention to certain serious concerns and questions with significant social, economic and political ramifications, not only for communities in the north and east but also nationally. 

a) While the outcomes of the procurement process have not been formally announced, the Minister for Prison Reforms, Rehabilitation, Resettlement and Hindu Religious Affairs is reported as saying in different meetings and forums that Arcelor Mittal will be awarded the contract to supply pre-fabricated metal houses. 

The Member of Parliament from Jaffna, M.A. Sumanthiran, is on record terming the tendering process “a sham” as the Minister had already informed them of the choice of this company as early as August 2015 (The Sunday Times, 17 January), even before the call for expressions of interest was issued. 

Moreover, the Construction Association and local industry have noted that the bidding process included several exclusionary conditions “completely disproportionate to the complexity of the work” (The Sunday Times, 24 January) leading to local companies being side-lined. All of this and other concerns expressed by civil society raises serious questions regarding the propriety, integrity and economic wisdom underlying the procurement process. 

Honourable Prime Minister, the risk this poses to both the project as well as the credibility of the government is but obvious. Moreover, it also points towards a troubling tendency to embrace supplier-driven housing solutions, which have proved to be expensive failures across the world including in Sri Lanka. 

b) We are deeply concerned that let alone the communities, even the provincial and local government officials as well as agencies that have decades of experience in housing have not been consulted in designing this project. A statement released on 22 January and signed by a number of citizens from the Northern and Eastern Provinces as well as elsewhere underscores this, noting the risks in by-passing meaningful community consultation. 

This is especially important given the new technology—pre-fabricated metal houses—the Ministry of Resettlement appears to be so heavily in favour of. We know from experience during the tsunami that innovation without a strong social process leads to waste and missed opportunities.  

The lack of consultation and a community-driven approach also risks undermining support for the Government in the north and east and is likely to adversely affect ongoing attempts at reconciliation.  

c) The proposed project, whose details are emerging only now, also raises a number of other important questions. How did the Ministry of Resettlement arrive at a cost of Rs. 2 million per house when most other estimates for a 550 sq. feet house, kitchen and toilet included, come to Rs. 1 million per house? How does the Ministry justify not having guidelines to ensure the project will strengthen the local economy and strengthen livelihoods—it fails to leverage the economic benefits of such a large public investment? 

This is especially serious given the prospect of the contract being awarded to Arcelor Mittal, which will only expand our import bill and place a greater strain on forex reserves while bypassing the local economy. Why is the Government assuming a greater debt burden for fewer houses and lower economic benefits?

Honourable Prime Minister, we recognise that meeting the housing needs of different communities Island-wide calls for a diversity of approaches. Relying on a one-size fits all approach and on a single contractor privileged through what appears to be a questionable procurement process poses significant social, political and economic risks. We also note that the inequities within communities that will arise from beneficiaries of different schemes being provided with houses of significantly different value and quality across the north and east will likely precipitate social tensions and impede both reconciliation and development. 

As a global pioneer of the right to housing, Sri Lanka can look to over 35 years of innovative, community-driven approaches to housing. A coherent policy framework informed by this history and based on sound principles is crucial to ensuring participatory, sustainable and effective housing programmes that also maximise the multiplier effects of the significant levels of national investment entailed by them. Given the social and economic dislocation suffered due to the war such an approach is particularly significant for the proposed programme to construct 65,000 houses in the north and east.

Honourable Prime Minister, in the light of above we urge you to:

Immediately review the current plan and the procurement process for the 65,000 houses programme; 

Expeditiously redesign the programme in consultation with concerned communities, especially women, and in keeping with the key principles and lessons emerging from Sri Lanka’s pioneering history in housing policy; 

Urgently convene a national policy roundtable on housing to ensure coherence, equity and basic standards and principles that must underpin all housing programmes undertaken by different ministries. 

Honourable Prime Minister, we hope you will give this memorandum your fullest consideration and we look forward to hearing from you at the earliest.

For and on behalf of a number of concerned individuals and organisations (signed electronically):

Jayantha Dhanapala

Dr. Rajan Hoole

Prof. Sumathy Sivamohan

Rev. Fr. I. D. Dixon

Chandra Jayaratne

Dr. A.C. Visvalingam

Geedreck Usvatte-Aratchi

Dr. Farzana Haniffa

S.C.C Elankovan

Danesh Casie Chetty

Shreen Saroor

Chulani Kodikara

Women’s Action Network

Mannar Women’s Development Federation

Rural Development Foundation – Vavuniya

Muslim Women’s Development Trust- Puttalam

Mullaitivu Women’s Development and Rehabilitation Federation

Suriya Women’s Development Centre Batticaloa 

Women’s Coalition for Disaster Management Batticaloa