Minister of Finance Ravi Karunanayake stated that the government is reviewing the USD 430 million TATA Housing Project, because the deal entered into with the earlier Mahinda Rajapaksa government is unacceptable.  

“The Tatas came in and said they will put in US$250 million, but they put in US$20 million, used our land, and sell it back to us for a higher price. How does that work?” Karunanayake asked in an interview with South China Morning Post published on March 9.

On February 25 the Sri Lankan cabinet decided to do a “complete review” of the TATA’s massive housing project for the underprivileged in downtown Colombo. The grounds given at that time were that the people at the site had been evicted illegally and proper compensation was not paid.

“This is part of a review of all foreign projects, including Chinese and Indian,” cabinet spokesman Rajitha Senaratne clarified at a briefing on February 26.

Though deemed to be a welfare project to give shelter to 65,000 families living in overcrowded and dilapidated houses in the very heart of Colombo, the housing project was resisted by the residents. Human Rights groups and the media took up the cause of the underdog, albeit unsuccessfully.

The project envisaged construction of three apartment blocks comprising 40 storeys, each containing 580 housing units, each unit being of 400 sq ft.  The construction was entrusted to the TATA Housing Development Ltd., which had formed a local company named “One Colombo Ltd.,” for the purpose. The TATA’s were to recover their investment by building 96 luxury housing apartments. Construction was expected to be completed in two-and-a-half years.

The total cost for providing relocation houses/commercial units was estimated at Rs. 5.8 billion (USD 43.6 million) including rental payments for temporary accommodation of the evicted families.

At its launch, the Defence and Urban Development Ministry claimed that almost all the families had agreed to renounce their rights to claim compensation for the respective land plots as they were to be provided with permanent houses with all facilities within two to three years.
(With inputs from The New Indian Express)