Reuters: COLOMBO, June 1 (Reuters) - Prices of building materials are rising sharply in Sri Lanka as aid agencies flock to rebuild the island's tsunami-ravaged coast and could translate into fewer houses being built, donors warned on Wednesday.
Some materials are scarce, a sales tax is compounding matters, and some donors worried that government bureaucracy will delay rebuilding have even resorted to buying land to build on rather than waiting for it to be allocated for free.
"The rise of prices is really very, very visible," Ivan Vuarambon Blas, acting Deputy Country Director or the Swiss Agency for Development and Cooperation, told a news conference held by the government's tsunami reconstruction arm.
International donors have pledged around $3.0 billion in aid to help Sri Lanka rebuild towns and homes flattened by the tsunami -- which killed nearly 40,000 people along the Indian Ocean island's shores -- including pledges for around 97,000 permanent houses.
The government hopes the houses will be completed by early next year, but only a few hundred have been finished to date and some experts say it will likely take far longer.
In the meantime, over 11,000 families are still living in tents and camps along the south, east and northern coasts, while thousands more are living in wooden shacks or often stifling concrete temporary shelters.
"There is a VAT (sale tax) component, which essentially means with the cost escalation less houses ... we can put on the ground," said Ajith Gunawardena, Director of John Keells Holdings group, who helps administer the Galleon Tsunami Relief Fund.
"It's going to take up some of the funding," he added. "The scarcity of building materials and sand is something we'll have to deal with."
The government has struck a deal with cement companies to keep prices down and is mulling issuing new sand mining licenses to enable companies to mine sand from the sea, but timber, roofing and brick prices are rising.
"The escalation of the building materials is a serious concern," said Mano Tittawella, Chairman of state tsunami reconstruction agency the Task Force for Rebuilding the Nation.
"If the price escalations go beyond a certain point, the number of houses built will be less," he added.
Donors said another difficulty they face is the ethnic and religious community mix that will live in clusters of houses once built, given often strained relations between minority Tamils, Muslims and the majority Sinhalese.
"If we mix up too many communities...it can be a paradise, it can be a disaster," said Tissa Jinasena, managing director of Sri Lanka's leading solid rubber tyre maker Loadstar, which has set up a tsunami relief fund.
Some tsunami survivors are unhappy with land the government has earmarked for reconstruction, which donors say is sometimes too far inland for fishermen or unsuitable, he added.
"We are purchasing all our land (for reconstruction)," Jinasena said. "We are not waiting for the government, because we feel this will delay the project too long."
Some materials are scarce, a sales tax is compounding matters, and some donors worried that government bureaucracy will delay rebuilding have even resorted to buying land to build on rather than waiting for it to be allocated for free.
"The rise of prices is really very, very visible," Ivan Vuarambon Blas, acting Deputy Country Director or the Swiss Agency for Development and Cooperation, told a news conference held by the government's tsunami reconstruction arm.
International donors have pledged around $3.0 billion in aid to help Sri Lanka rebuild towns and homes flattened by the tsunami -- which killed nearly 40,000 people along the Indian Ocean island's shores -- including pledges for around 97,000 permanent houses.
The government hopes the houses will be completed by early next year, but only a few hundred have been finished to date and some experts say it will likely take far longer.
In the meantime, over 11,000 families are still living in tents and camps along the south, east and northern coasts, while thousands more are living in wooden shacks or often stifling concrete temporary shelters.
"There is a VAT (sale tax) component, which essentially means with the cost escalation less houses ... we can put on the ground," said Ajith Gunawardena, Director of John Keells Holdings group, who helps administer the Galleon Tsunami Relief Fund.
"It's going to take up some of the funding," he added. "The scarcity of building materials and sand is something we'll have to deal with."
The government has struck a deal with cement companies to keep prices down and is mulling issuing new sand mining licenses to enable companies to mine sand from the sea, but timber, roofing and brick prices are rising.
"The escalation of the building materials is a serious concern," said Mano Tittawella, Chairman of state tsunami reconstruction agency the Task Force for Rebuilding the Nation.
"If the price escalations go beyond a certain point, the number of houses built will be less," he added.
Donors said another difficulty they face is the ethnic and religious community mix that will live in clusters of houses once built, given often strained relations between minority Tamils, Muslims and the majority Sinhalese.
"If we mix up too many communities...it can be a paradise, it can be a disaster," said Tissa Jinasena, managing director of Sri Lanka's leading solid rubber tyre maker Loadstar, which has set up a tsunami relief fund.
Some tsunami survivors are unhappy with land the government has earmarked for reconstruction, which donors say is sometimes too far inland for fishermen or unsuitable, he added.
"We are purchasing all our land (for reconstruction)," Jinasena said. "We are not waiting for the government, because we feel this will delay the project too long."
