Compensating Victims of the Colombo Kandy Highway
Posted on January 13th, 2016

Dr. Chandana Jayalath

The Central Expressway, also known as the Colombo–Kandy Expressway is a proposed road project that will link Colombo, with Kandy. It will essentially duplicate the route of the A1 Road (Colombo-Kandy Road), thereby reducing the motor traffic to a greater extent. The expected benefits are enormous in long run so that this is one of the few projects having a national significance. Its first stage from Kadawatha to Ambepussa, as so far as heard, will be a four lane divided carriageway (with room for a future two lanes) for a length of 48.2 km. There will be interchanges at Kadawatha, Gampaha, Balabowa and Mirigama, with fifty overpasses and thirty underpasses along the route. The initial estimated cost of Phase One was approx. Rs. 70.0bn, with more recent costs estimated at Rs. 130bn. However, these figures will definitely vary as the work progresses.

It is also heard that the investor is expected to fully finance building, maintain and operate the expressway, collect toll and after an agreed period transfer same to the Government of Sri Lanka. The investor is expected the design the road over the pre-selected corridor, acquire land, pay compensation and construct with related facilities. The design and construction would be under the supervision of a reputed international firm, selected by the investor to ensure the required standards and quality. What was initially heard is that the investor will prepare acquisition drawings, pay compensation to affected parties at rates not less than paid in the other Expressways. He will implement the Resettlement Action Plan for affected parties subject to RDA approval and will identify the areas suitable for resettlement of affected parties.

It is also understood that using paddy fields are more economical than building up through densely built up areas. This principle is acceptable for the whole alignment, where economically viable. On section km 0-30, paddy fields are now used, to a large extent. The proposed Enderamulla-Ambepussa stretch of the Expressway will be constructed in most part parallel to the railway line over paddy, marshy and uncultivated areas. However, it is seen that a considerable extent of arigable lands will experience a severe topographic change.

However, the question of whether the responsibility of acquisition and payment of compensation has been passed over to the investor is unknown. In acquisition of properties and payment of compensation, however, government politicians play a major role. It would be interesting to observe what would happen. Under the stipulated conditions, the payment of compensation should at least be in par with payments made in previous such projects.

Compensation is a sensitive issue when large scale private properties and settlements are being disturbed. As such, it is imperative to have a matrix in place that proposes basis of eligibility and extent of payments for all kinds of losses (e.g., land, housing, businesses, and other income sources, temporary loss of income, displacement and moving costs). A matrix that sets standards for compensation is inevitable to avoid any potential anomalies over compensation and unnecessary political interference. Since the policies of any typical international funding agencies is, at least, to maintain the level of living under without-project” situation, a strategy for maintaining their former standard of living needs must be of top priority. The foremost is to avoid or minimize resettlement effects through technical modifications.

The next step is to develop entitlement guidelines to cover all project-affected people, including non-titled persons, and ensure that the common needs of masses are fully met. Indeed, the affected people should be fully informed and closely consulted on resettlement and compensation options. They must be contacted nicely and humanely without any sphere of influence. It is natural that people affected by resettlement are apprehensive that they will lose their livelihoods and communities, or be ill-prepared for complex negotiations over entitlements. Participation in planning and managing resettlement helps reduce any fear or obscurity and gives an opportunity to participate in key decisions that will affect their lives. Resettlement implemented without consultation may lead to inappropriate strategies and eventual impoverishment. Without consultation, the people affected may oppose the project, causing social disruption, substantial delay in achieving targets or even abandonment, and cost increases. Negative public and media images of the project and of the implementation agency may develop. With consultation, initial opposition to a project may be transformed into constructive participation. Consultation can be fostered by holding public meetings and identifying focus groups. Planners might draw on participatory problem-solving methods, supplemented by use of the media in scattered or broad areas.

Compensation, as said earlier, is one of the key considerations the government authorities must be insightful. Therefore, it is important that the eligibility matrix works on a fair and humane basis covering, though it is impossible to replace the mental agony and depression monetarily, the key cost components that are ascertainable scientifically. Such elements basically include replacement cost of housing, land, crops and vegetation, source of income, loss of business opportunity, relocation costs etc. Accordingly, the cost of a house ascertained merely on square meter basis with a ceiling budgetary restriction does not amount to a fair compensation. Costs depend on a myriad of factors such as type of construction, height and volume, number of rooms, type of finishes used, external amenities, locational factors, etc that heavily influence the quality, workmanship and performance characteristics inherited in these houses. In addition to that, there will be professional fees for design, supervision as well as fee for government agencies including stamp duties. Land too has variables such as location, adjacent plots, local government payments, notary charges, stamp duties, etc. In nutshell, it should be the value enough to replace the loss over displacement had there been no project. It is not the value of the property decided by market demand and supply forces since this involuntary resettlement is not a result of a buying and selling transaction.

Simply put, the replacement cost is the actual cost to replace an item or structure at its pre-loss condition. This may not be the “market value” of the item, and is typically distinguished from the “actual cash value” payment which includes a deduction for depreciation. The term replacement cost or replacement value refers to the amount that an entity would have to pay to replace an asset at the present time, according to its current worth. This concept is different from the book value used by accountants in financial statements or for tax purposes. Accountants use the purchase price and subtract the accumulated depreciation in order to value the item on a balance sheet. Replacement cost is the price that an entity would pay to replace an existing asset at current market prices with a similar asset. The replacement cost of an asset may vary from the market value of that specific asset, since the asset that would actually replace it may have a different cost; the replacement asset only has to perform the same functions as the original asset – it does not have to be an exact copy of the original asset. Replacement cost can also be used to estimate the amount of funding that might be required to duplicate another option, however, care must be taken that there are artificial price hike-ups in adjacent land properties. In whatever means, the compensation must be reflective of the foregoing considerations which will, if implemented logically and expeditiously, render social justice and human worth for those who scarified their urumaya on behalf of a nationally important project.


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