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Rising costs to jack up tsunami reconstruction bill: US Congress

WASHINGTON, April 14, 2006 (AFP) - Rising fuel and materials prices and skilled labor shortages are expected to push reconstruction costs for the deadly December 2004 tsunami past 10 billion dollars, a US Congress report said Friday.

Some key infrastructure projects could be delayed by the problems, compounded with land acquisition difficulties and changes in project design, said the Government Accountability Office (GAO), an investigative arm of Congress.

"Although pledges of 13 billion dollars exceed initial damage estimates of 10 billion dollars, escalating costs may increase the amount of funding needed for reconstruction," it said.

The US government contributed nearly one billion dollars while American individuals and corporations raised another 1.5 billion for relief and reconstruction activities following the Southeast Asia tsunami disaster, which left more than 220,000 people dead in a dozen countries.

The GAO report said the United States might have to consider increasing money approved by Congress for reconstruction in worst-hit nations Indonesia and Sri Lanka.

Congress initially approved 908 million dollars in assistance for relief, reconstruction and related programs for all affected areas. The programs are largely being undertaken by the US Agency for International Development (USAID) under the State Department.

GAO said that "primarily because of rising costs and scarcity of materials and labor, it appears that some projects may exceed USAIDs initial cost and schedule estimates" and could be delayed.

It recommended that Secretary of State Condoleezza Rice, in her departments semiannual report due to Congress in June, provide updated cost estimates and schedules.

"If the updated information differs substantially from initial projections, the report should also include alternative project scopes and the need for additional sources of funding, if necessary," it said.

The USAID was allocated 496 million dollars for reconstruction activities, including 349 million dollars for Indonesia and 85 million dollars for Sri Lanka.

The agency's "signature" projects in the two countries -- intended to generate greater visibility for overall US aid -- are expected to be delayed, the report said.

They are a 150-mile (241-kilometer) road construction project in Aceh Province in Indonesia costing 245 million dollars and due for completion in September 2009, and a bridge project at Arugam Bay in Sri Lanka scheduled for completion in March 2008.

USAID had initially planned to complete most of its other reconstruction projects, such as building schools and restoring livelihoods, by September 2007.

The report said that "since USAID made its initial projections in the spring of 2005, materials, labor, and fuel costs have increased substantially in both countries.

"In addition, changes to project scope and ongoing design work for key construction efforts may reveal actual conditions that differ from initial assessments, potentially leading to higher than planned costs." it said.

As cost contingencies included in the initial estimates may be insufficient, GAO said Congress needed updated information on projected costs and schedules to "provide appropriate oversight."
 

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3 years on, tsunami victims await help
28 December 2007
Daily Yomiuri

BANDA ACEH, Indonesia--Three years have passed since the massive earthquake off Sumatra, Indonesia, and the subsequent tsunami. But people in Indonesia's Aceh Province, the area worst affected by the disaster, are still struggling, living in relief housing for tsunami victims that often lacks electricity or water supply. More than 10,000 people continue to live in emergency shelters.

In Neuheun in northern Aceh Province, houses with eye-catching yellow walls stand on a hill above the port. Chinese characters on the gate to the area read "Indonesia-China Friendship Village," indicating that the new housing was constructed with aid from China.

Although more than 600 such houses were built for tsunami victims, 20 percent of them remain vacant as they lack electricity or water supply. There is one communal tap, but it is hundreds of meters from many of the houses.

A haulage company charges about 20,000 rupiah (2 dollars) to deliver 500 liters of water from the tap to a house.

"The residents here earn about 10,000 rupiah a day. We can't afford to pay a company to deliver the water, so I wonder if it would be better to stay in one of the shelters," said Rusdi, a 40-year-old school clerk. Many other housing developments in the province have similar problems.

In Bakoy, also in northern Aceh, about 600 people from 190 households are living in shelters, with only thin plywood divides for privacy.

"The government told us we could get out of the shelters in two years. But I've been here for three years," said Muhammad Nasir Ibrahim, a 28-year-old former fisherman.

According to the Aceh Rehabilitation and Reconstruction Agency, 103,000 of the targeted 120,000 houses have so far been built. People who owned land before the disaster were given priority in the allocation of relief housing. Those who did not own land were left out. A total of 10,000 people from 3,700 households in the province continue to live in the shelters.

Many of the foreign relief organizations have withdrawn from the area, making residents worry that the international community is losing interest in them.

"Financial support for the weak and vulnerable is going to be a more important issue in the days ahead," a worker at the local relief organization said.
 
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