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Sri Lankan Govt Sets The Record Straight On Much Criticised Arcelor Mittal 65,000 Houses Project in North

The Sri Lankan Ministry of Prison Reforms, Rehabilitation, Resettlement and Hindu Religious Affairs has issued a statement in response to criticism levelled against the Govt approved project of constructing 65,000 houses for war affected civilians in the North through Arcelor Mittal owned by Indian steel tycoon Lakshmi Mittal

In the statement issued by the ministry the Sri Lankan Govt position on the controversial project is clearly stated.

The statement explains details of the approved project thus effectively responding to criticism against the project by the Tamil National Alliance


The full statement of the Ministry is given below:

Since several parties have raised concerns about the tender process, durability of the housing units, eco friendliness and the implementation of the 65000 housing programme the Ministry of Prison Reforms, Rehabilitation, Resettlement and Hindu Religious Affairs would like to shed light on how the particular construction company was selected through the tender process and how the housing project will be implemented.

As per the decision of the Cabinet to construct 65000 housing units for the persons in conflict affected areas it was decided to call for proposals from International and National house builders can undertake the construction of houses by bring concessionary financing arrangements.

In order to facilitate the procurement arrangement, the Cabinet of Ministers had appointed a Cabinet Appointed Negotiating Committee (CANC) and a Project Committee (Technical Evaluation Committee). Request for Proposals (RFP) were invited from the pre-qualified bidders for the Construction of 65,000 permanent houses under concessionary financing arrangements for resettling conflict affected families.

The Request for Proposal requirements included 550 square feet floor area, two bed room, one living room, kitchen and detached toilet. The requirement also provided for brick and motor type houses and other innovative models including pre-fabricated houses.

35 companies submitted expression of interest the technical evaluation committee and the Cabinet appointed negotiation committee evaluated the expression of the interest based on the approved criteria. Accordingly 15 bidders were pre-qualified.

The price of the ArcelorMittal for a single unit of prefabricated house including Kitchen with pantry cupboard, gas cooker gas cylinder, sink, water tab, cooking utensils; dining room with table and four chair; living room with 3 pieces of sofa sets; coffee, table TV stand, TV, free standing fan; master bed room one double bed, two bed site tables, free standing fan; second bed room with 2 single beds two single mattress one writing table one chair, laptop computer with WIFI facility , free standing fan. house also include solar panels with light fittings with electrical connections, tube well pump 500ltr water tank and ceramic floor tile in every room toilet is Rs. 2.18 million without taxes.

The price of the EPI-OCPL Consortium for single unit of conventional house with a toilet only is Rs.1,307,306/-(without other facilities)

Only two companies such as Arcelor Mittal and EPI-OCPL Consortium have submitted bid security for the amount of Rs.650million and acceptable technical proposal. Subsequently only the financial proposals of those two companies have been opened for financial evaluation. The financial proposals of other 6 companies have not been opened as they have not been qualified technically. In terms of the RFP requirements and following the two envelops tender evaluation systems.

Comparative cost of construction of on-going scheme to construct 10,000 houses

Under the current government funded scheme different Ministries have implemented different housing programmes some are contributory housing programmes others are owner-driven housing programms. There are contractor driven housing programmes. Plantation housing programme is more contractor driven housing programmes which cost Rs.1.2 million for basic houses excluding other facilities. Meeriabatta housing programme done by Sri Lankan army cost Rs.1.3 million. owner driven housing programmes under taken by the Ministry cost Rs.800,000/-. One cannot compare apple with oranges. The basic house under contracted driven process cost Rs.1.3 million. The furnished house with all facilities including solar system tube well, furniture’s, TV, Gas cooker, Computer WIFI and other facilities as set out under Para 5 above.


The warranty period for proposed construction

During the warranty period any damages will be met by the company as per the stranded terms and conditions. However the life of the house is more than 60 years


Reports on the environment suitability of proposed construction

The proposed housing model is environmental friendly and the heat inside the house will be lower at least 3 degree Celsius to 5 degree Celsius as compared to the outside temperature because of the insulation technology. Anyhow given the innovative model of the technology the Cabinet of Minister has decided to construct two model houses for demonstration purposes and to test the cultural, social and environmental suitability.

Durability of proposed construction, the local agent and the implementation arrangements

The durability of the construction is more than 60 years. The company provided guarantee/warranty for 30 years. The local agent is yet to be informed. The 65000 houses are proposed to be implemented under four tranches, 1st tranche is 11,000 house in 1st year; 2nd tranche 18,000 houses in the 2nd year; 3rd tranche 18,000 houses in the 3rd year; 4th tranche 18,000 houses in the 4th year. The project is to be implemented through the District Secretary and Divisional Secretaries. Special monitoring evaluation and supervisor arrangements will be also established.