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Tsunami rebuilding - Questions for cash

News analysis - In tsunami-stricken Asia efforts are now turning from immediate relief to long-term reconstruction. Billions of pounds have been pledged, but who will get to spend it- Mark Hansford investigates.

BOXING DAY'S devastating unami was a disaster unlike any other in living memory, and the response around the globe was unprecedented. Putting an exact fi gure on the amount of money pledged to the region is impossible. Latest estimates suggest the fi ure will top £2bn, delivered in a myriad of ways - via bilateral aid, directly donated cash and from development banks.

So as attention turns from providing immediate relief to planning for long term reconstruction, one giant question remains unanswered: where is all this money going to go, and who decides?

In Sri Lanka, the government decided very quickly what it wants the money spent on, last week announcing a £1bn reconstruction action plan, including many projects already planned before the tsunami struck (News last week).

But it is the only nation so far to be so bold. Others appear to be waiting for major development banks such as the World Bank (WB), the Asian Development Bank (ADB) and the Japanese Bank for International Co-operation (JBIC) to take the lead.

Together these agencies have conducted whistle-stop tours of the affected region and are busy producing hefty reports.

The WB/ADB/JBIC preliminary damage assessment for Indonesia, published this week, runs to 128 pages, with accompanying 'reconstruction notes' occupying a further 339. But even this hefty tome shies away from putting a firm fi gure on the task ahead.

Indeed, only in housing and roads does the report state any fi ure at all: an astonishingly low £256M for housing; £108M for roads.

In every other sector, be it health, water or schools, costs are 'to be determined'. What is certain is that the fi nal cost will be much more than the £2.5bn total needed to repair all the tsunami damage.

Individuals and businesses have been affected in the main though; the tsunami ruined many of the assets and activities that support livelihoods - housing, commerce, agriculture, and fisheries. Loss of roads, government buildings, and other public infrastructure accounted for just 22% of the damages and losses.

estoring livelihoods is mainly the domain of the aid agencies, and this is where most of the aid money pledged to them will be channelled.

To date, United Nations figures show that aid agencies have together pitched for £543M of donations across the region.

Of this, £411M has been pledged directly, although just £111M is in the bank. Either way, this shows the aid effort more than £100M short, suggesting that donations for longer-term reconstruction may be in short supply.

This is traditionally where the development banks, with their low interest loans, step in, and they look set to do so again.

So far the World Bank has allocated £167M to Indonesia, £56M to Sri Lanka and £7M to the Maldives under its short term assistance programme. It says this may eventually total £830M, depending on needs assessments.

The ADB has allocated an initial £375M for the rehabilitation and reconstruction effort in Indonesia, Maldives, and Sri Lanka. A further £75M is on offer for 'priority rehabilitation and reconstruction needs' in Aceh and North Sumatra.

India too is keen to get a slice of the World Bank/ADB pie, and has requested assistance for reconstruction and rehabilitation work. Initial government estimates put the loss of property at £800M.

But this money may take some time to come through - and will certainly be slower than countries like Sri Lanka want.

Sri Lankan offi cials are bullish about progress and expect the £1bn programme it has identifi d to be completed within three years, with the bulk of the money spent in 2006.

It wants large infrastructure projects awarded as publicprivate partnerships to drive the investment. But World Bank president James Wolfensohn has warned it could take up to three months to work up detailed plans and that no money will be handed over until then.

The ADB is making more encouraging noises. 'We need to use this sad occasion to lay the roots for a better future for vulnerable communities, ' said its president Tadao Chino during a visit this week to tsunamiaffected areas in Sri Lanka.

'ADB stands ready to provide support to Sri Lanka, and will assist the reconstruction effort with about £111M in 2005. ADB is committed to providing assistance effectively and in a timely fashion.' The result on the ground is confusion, not least for the British fi ms looking to get involved in the reconstruction effort. Scott Wilson has offered its services free to the Sri Lankan Urban Development Authority;

Atkins likewise to the Ministry of Health. Both are waiting for news.

'Things are now needing to be sorted out at government level and are moving a bit more slowly, ' says Scott Wilson project director Colin Holmes.

'People are starting to realise that the process is going to end up like a normal ADB/World Bank project, albeit on a grand scale, ' adds Atkins Colombo offi e manager Andy Hayden.

'These projects have to be justifi d and that introduces a time lag. Money has not started to fl ow yet, and it won't until every e is happy with the structure.' Adding to the confusion are the countries who are coming in and snapping up specific projects funded by bilateral aid, adds Hayden. This is being actively encouraged by the reconstruction task force TAFREN, which has stated its aim to open up opportunities further for project-based aid by publishing a list of projects available on its website.

Atkins is attempting to help the Sri Lankan government deal with this at ministry level by offering its services across the country, irrespective of location.

'We're getting major country donors coming in, saying 'we'll do a hospital in such-and-such a place', ' says Hayden. 'So we've told the Ministry of Health 'You tell us where we can be of importance to you'.' Atkins is preparing to set up a team of architects, quantity surveyors, structural engineers, water engineers and electrical engineers who can design and cost replacement hospitals. It also expects to be sent off to the more remote, less user-friendly areas that project-specific aid is likely to miss.

He sees the real problems ahead as being more logistical than fi nancial or political. 'There may not be enough skills to meet the government's desires. Similarly plant and materials. Where do you get the sand from- There was a shortage in some parts of the country before this disaster.

Opening up quarries has got to be the priority now.'

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