Sri Lanka Tsunami: Summary of World Bank Assistance to Sri Lanka

Summary | Livelihood Support Cash Grants | Housing Support Cash Grants | Health | Roads

Summary

The World Bank’s support to the Government of Sri Lanka directly after the tsunami of December 26, 2004 was to mitigate the immediate suffering resulting from the devastation; assist people to regain their livelihoods; restore basic services to the affected population; and to initiate the recovery and reconstruction process.

A post-tsunami Needs Assessment conducted jointly by the World Bank, Asian Development Bank, and the Japan Bank for International Cooperation estimated the reconstruction financing needs at US$2.2 billion. The World Bank committed a total of US$150 million.

• Owner-driven Housing program: US$65 million
• Livelihood support: US$34 million
• Roads: US$34 million
• Health: US$8 million
• Capacity Building: US$5 million
• Contingency: US$4 million

Sri Lanka has made satisfactory progress to regain normalcy, albeit hindered by the escalation of the twenty-year old conflict with an uncertain security environment hampering reconstruction efforts in the North and East. On the positive side, the relaxing of the “no construction Buffer Zone" made it possible for more people to reconstruct or rebuild houses in their earlier occupied land.

However, more needs to be done to ensure that affected communities have better access to information regarding policies, entitlements, and implementation procedures. Further, mechanisms to ensure uniform policy implementation, grievance redressal and accountability need to be reinforced. Of particular concern were unconfirmed reports of financial mismanagement, of the contradictory number of the houses destroyed and of aid not reaching the worst affected in sufficient quantity i.e. those living in what had initially been set aside as a no construction set back zone whose housing needs had not been met until a subsequent clarification of the set back zone. The discrepant pace of construction across districts has also blemished an otherwise decent record of post-tsunami reconstruction.

Livelihood Support Cash Grants

The US$34 million Livelihood support cash grants program was initiated by the Government of Sri Lanka in the immediate aftermath of the Tsunami to provide assistance to replace income losses of the most vulnerable households.

The cash grant program consisted of four rounds of cash grants of US$50 [LKR 5,000] given as direct deposits made to the beneficiaries’ passbook bank accounts. The first payment was made in March 2005 to nearly 250,000 families. The cash grants helped affected people get back to business in a short time and helped children return to school as the families were able to replace school supplies and school uniforms lost in the tsunami. It helped inject much needed cash back into a devastated local economy thereby contributing to the revival of economic activity.

A financial audit and beneficiary assessment carried out after this payment indicated that less than 6% of affected deserving families were excluded from the program. It revealed that geographic coverage was overly wide. In addition, 25% of beneficiaries of this first round were not acutely affected by the disaster as defined by housing damage, loss/disability of income earner, and loss of any business assets/livelihood. One of the steps taken to rectify these errors was to redefine the criteria of eligibility for the cash grants more precisely. In addition, statistics from the survey and the Census department were used to determine the maximum number of beneficiaries per district minimizing future errors in inclusion.

The government’s aim was to target subsequent payments to households with damaged housing or loss of income earners. Payments were discontinued for the least affected households. A second beneficiary assessment was conducted after the conclusion of the 4th payment. It found that among the group of income earners who were hit the hardest - the self-employed and casual workers - more than 80 percent regained employment within a year and a half after the Tsunami.

Housing Support Cash Grants

Sri Lanka ’s post tsunami housing reconstruction program needed to build over 100,000 houses for nearly a million people (234,000 families) who lost their dwellings in the disaster. Providing shelter for these families was a most vital part of the recovery and rebuilding process. For a country that normally builds only a maximum of 5000 houses a year it was a formidable task.

The Government and the World Bank partnered to design the homeowner-driven housing program based on the principles of inclusiveness, equity, transparency, beneficiary participation, and the application of subsidiarity. The World Bank financed operational costs and institutional strengthening of key implementing agency -- the Reconstruction and Development Agency (RADA).

The World Bank’s support for the housing reconstruction program was US$65 million and financed the reconstruction of 21,703 fully damaged houses and the repair of 22,691 partly damaged houses. This was phase 1 of the housing reconstruction program and constituted building homes outside of the earlier designated buffer zone. Out of 22,691 partly-damaged houses, close to 100 percent have been fully repaired within 21 months of the tsunami. Out of 21,703 fully-damaged houses in the same divisions, nearly one-third have been fully reconstructed in the same period.

Phase 1 of the World Bank-financed housing program would be completed in the southwest region of the country in December. This entails the reconstruction or repair of 12,651 houses. In the North East about 70% of the 31,743 houses will be completed by the same time despite the deteriorating security environment.

The on-site Homeowner-Driven Housing Program engaged affected families in designing and implementing their own reconstruction projects, creating a sense of ownership and providing the hope for the future throughout the process. A technical audit found that the quality of the reconstructed houses have achieved acceptable levels of structural stability, and many affected families are now living in better houses than before the tsunami. A Beneficiary Eligibility Audit did flag some irregularity in the identification of beneficiaries and the Bank would not cover such ineligible households. About 6% of the housing support cash grant recipients were ineligible to received such assistance.

The homeowner-driven housing program was adopted by other development partners such as the Asian Development Bank [ADB], the Swiss Agency for Development and Cooperation [SDC] , and German Development Bank [KfW] with each institution taking responsibility for a geographical area. The Government has also encouraged international NGOs to co-finance the homeowner-driven housing program as the government’s cash grant of US$ 2500 [LKR. 250,000] per family was found to be insufficient with the escalation of reconstruction costs.

A US$25 million trust fund from the International Federation of Red Cross (IFRC) is being administered by the World Bank and will be used to for the Phase 2 (inside of the former buffer zone) housing program.

The World Bank expects to wrap up Phase 1 of the housing program in the South West by December 2006, but some areas of the North and East are expected to continue to lag due to the deteriorating security situation. The IFRC-financed Phase 2, which is administered by the World Bank, started in mid-2006 after the Government relaxed the buffer zone limits and announced the revised housing policy. Phase 2 is expected to continue until at least mid-2007. A possible Phase 3 of the program is envisaged to cater for an additional 15,000 landless families that need permanent housing.

In retrospect, lessons could be learnt in the implementation of the NGO co-financing of the World Bank supported on-site home owner driven program. One notable failure was in the channeling of supplementary NGO resources. Some districts had a surplus of supplementary NGO top up funds while others, notably the North East, hardly received any. Better coordination and forward planning by RADA could have ensured smoother flow of resources in a more equitable manner leading to less grievance and disconnect.

The donor or NGO driven housing programs tended not to share the successes of the home owner driven program in part due to the lack of environmentally suitable lands provided for such relocated housing schemes. Many of the new sites identified for the purpose lacked ancillary infrastructure such as access to safe drinking water, internal roads and the mitigation of environmental risks such as flooding and drainage. This program which entailed relocation faced considerable challenges leading to considerable delays in construction than the on-site Bank financed home owner driven program.

The initial post-tsunami restriction on construction within a 100 to 200 meter buffer zone led to confusion as to whether beneficiaries would be included in the on-site World Bank-financed home owner driven program or the off-site donor driven program. The relaxation of the buffer zone facilitated eventual clarity as to which housing program the beneficiaries was eligible to leading to a considerable influx of participants to the World Bank financed home owner driven program. However, the subsequently inflated lists of beneficiaries due to such recategorization led to confusion with regards to installment payments and the synchronization of the home owner driven program. It also led to price escalation and an upsurge in costs.

Health

The World Bank support for the health sector is US$8 million. The thrust of the IDA-financed program was to meet emergency health needs not covered by other donors. This included the reconstruction of health administration buildings, living quarters for health care personnel, and the technical supervision of all post-tsunami construction in the health sector. Most other donors focused on the reconstruction of hospital wards and health clinics.

Assistance was given to the Health sector in the immediate aftermath of the Tsunami, reimbursing Government expenditure relating to the procurement of drugs. This assistance was worth US$1.2 million. Additional support for this sector was designed to fill gaps in the government-designed plans for post-tsunami rehabilitation. The US$8 million of the allocated funds will be utilized for the reconstruction and refurbishment of District Health Offices in the Galle, Matara, Amparai districts damaged by the tsunami and for the purchase of essential drugs.

There has been some delays experienced in procurement in the health sector but the purchase of emergency drugs for the Medical Supplies Division is now complete. The contract to design and supervise identified reconstruction activities of all donor funded health care institutions was awarded in July 2005. 80% of the work under this consultancy has been completed and approximately 70% of the total contract amount has been paid.

Roads

Contractors have been mobilized and work is ongoing despite delays related to shortages of bitumen and delays in water supply projects which necessitate the laying of pipes under certain roads. The original plan was to complete all the three packages by the end of April 2007. This might now be delayed by several months.

 December 2006