'Turning Sri Lanka’s Urban Vision into Policy and Action'
The recent modernisation of the city of Colombo and other cities have
drawn the attention of the World Bank to examine how this positive
initiative could be sustained to achieve the urban development vision
articulated in the government’s policy vision of urban development.
The report argues that by filling in the institutional and policy
gaps in the overall urban renewal framework, the Urban Vision could be
achieved by 2020. The report provides an assessment of Sri Lanka’s urban
characteristics, outlining the changes and broad policy direction for
turning the Urban Vision into action.
The Report begins by highlighting Sri Lanka’s vision to become a hub
between the East and the West and an upper-middle income country by
2016. In this context, in addition to creating a conducive economic
policy environment to achieve close to 8% economic growth rates and five
regional hubs, there is a defined policy framework for urban renewal and
Two major components comprise this policy framework. They are
contained in the following documents: (a) “System of Competitive Cities
Vision” as enunciated in the National Physical Planning Policy and Plan
2011 -2030 and the Mahinda Chinthana Vision for the future (MCVF)
(Section 7.4 and 8.3); and (b) “Adequate and Affordable Urban Shelter
for All” (MCVF, Section 7.3) - the vision to provide every family with
adequate and affordable shelter by 2020.
Under (a) the objective is the development of a system of cities in
five metro regions comprising Colombo, North-Central, Southern, Eastern
and Northern Regions and the development of nine metro cities -
Anuradhapura, Ampara, Batticaloa, Colombo, Dambulla, Hambantota, Jaffna,
Polonnaruwa and Trincomalee.
These are to be competitive, well-linked and be environmentally
Under (b) the intention is to cover the current backlog of 600,000
housing units, in addition to constructing one million new houses by
2020. In this exercise, the government has already initiated the
construction of low-income houses in Colombo under its Sustainable
Township Program. The overall objective is to construct 100,000 housing
units per annum nationwide until 2020.
In the achievement of these objectives as enunciated in the two
programs, the Report highlights a number of constraints. Of these, the
Report has indicated three as being noteworthy in respect of the first
initiative. These include the following:
The first involves the characteristics of Sri Lanka 'urban
footprints', these being low density, sprawl and ribbon development
which characterise the main roads and the coastal belt. Urban sprawl is
transport-intensive, difficult to plan and manage, and stems largely
from regulatory failures and enforcement of land use controls. Low
density sprawl and ribbon development lead to economic inefficiency and
makes service delivery uneconomical.
Secondly, Sri Lanka lacks an integrated policy and institutional
framework for urban infrastructure finance.
Urban infrastructure is financed almost exclusively through
traditional methods and within the framework of public procurement
procedures. Most projects are financed and managed through the line
Ministries and central agencies in areas such as telecom, energy, and
The third main deficiency is that provincial, Municipal and local
authorities have neither sufficient finance and technical personnel nor
resources to provide for efficient urban service delivery. Urban Local
Authorities account for less than 2% of total annual government revenue
and whatever expenditure incurred is largely for recurrent maintenance
rather than capital expenditure.
The Report identifies these three factors as the main constraints
that impede the achievement of the first objective envisaged in Sri
Lanka’s vision of urban development. In this context, the Report argues
that building long-term partnership with the private sector is crucial
for managing and financing large urban infrastructure which is the
centre of the Urban Vision.
An integrated policy and an institutional framework to leverage
private capital and expertise would be a necessary ingredient if the
constraints are to be overcome and a system of competitive cities built
as envisaged. The sustainability of the government’s recent initiatives
such as the urban renewal in the Colombo metropolitan area and urban
centres outside the Western Province will depend on the government’s
commitment to address these key institutional and policy constraints.
It moreover requires a committed long-term vision for urban areas at
national, regional and urban levels.
The Report in analysing the second part of the Urban Vision i.e.,
providing every family with adequate and affordable shelter by 2020 has
also identified a number of constraints. These involve constraints
primarily in the transport network, finance, land and housing markets.
The Report stresses that in achieving Sri Lanka’s Urban Vision the
underserved settlements in urban areas have to be addressed.
According to the 2011 UDA survey, close to 68,812 households in
Colombo live in 1,499 underserved areas, i.e., almost half the city’s
The substandard conditions in which they live particularly in respect
of latrines and sewerage which aggravated during period of floods,
constitute a pressing problem. Cities and towns outside the Western
Province also have their share of substandard conditions comprising
about 10-15%. For example, of the housing stock, 18% in Kandy, 20% in
Nuwara Eliya and 17% in Matara are in substandard housing.
In respect of the transport network, the Report states that transport
bottlenecks are well known with long journey times between urban nodes.
There are no formal arrangements for integrated planning and
coordination of the transport section.
In this respect it can be pointed out that in spite of many
developments still due, a substantial improvement in the road network
has taken place with the construction of highways and expressways,
improvement of roads, building of new bridges in the Eastern, Northern
and Up-country areas and many new undertakings continuing and due to be
In respect of finance, the Report points out that the key low-income
housing finance institutions are ineffective. Private commercial banks
are not eager to finance housing development due to various
complications. These include inadequate collateral, obtaining a clear
title to land, absence of credit guarantees, eviction laws such as the
Protection of Leaseholder Act (1959), the Rent Act (1972) and Ceilings
on Housing Property Law (1973).
The National Housing Development Authority focuses most of its funds
not to low income groups but to middle income groups. The Urban
Settlement Development Authority that works on community mobilisation
has also become less effective. In regard to the Urban Development
Authority the Report points out that it does not receive budget transfer
expect for Special Projects. Thus as highlighted in this Report and also
confirmed in the World Bank’s 2008 report on 'Housing Finance in Sri
Lanka: Opportunities and Challenges', the housing–finance system for
both bankable and non-bankable households is under-developed.
With regard to the land market, the Report points out a number of
factors that act as constraints. Sri Lanka has strict land market
restrictions with the state holding close to 82% of the land. Core city
areas are short of buildable land and private developers face
difficulties in assembling large parcels of land for residential,
commercial and industrial development.
Most private contractors concentrate on high-end condominiums or land
sub-division and sale with basic services.
These are primarily for upper or upper middle income groups and the
middle or low income groups are left in the lurch.
Land market restrictions have far reaching effects on rural urban
transformation. Land distributed to landless farmers by the Land
Development Authority cannot be leased, mortgaged or sold thus slowing
down the rural-urban transformation. While it has not restricted
temporary migration, it has discouraged diversification toward non-farm
activities in manufacturing and services.
The Report in this respect argues for a market-based land disposal
and conversion as alternative options, pooling and re-adjustment and
land banks. There are, however, a number of conditions necessary for the
operation of such alternative schemes. These include adequate knowledge
of land market demand in various locations, land-use plans for
infrastructure requirements, realistic financing plans and institutions
capable of and mandated for negotiating, auctioning and pooling land.
The report indicates countries such as Brazil, Korea and Gujarat state
in India as being successful in such efforts.
The overall policy framework advocated is in the Report consist of
* Moving towards strategic and integrated national, regional and
* Ensuing sustainable financing of regional and urban infrastructure.
* Repositioning Urban Local Authorities as an accountable service
provider and equipping them with adequate powers and facilities for
performance-based city management and finance.
* Promoting efficient and sustainable land and housing development
for improved city livability.
The report is a useful document to initiate on urban renewal and
Although it does not go into the political constraints of policy
reforms it provides a useful platform with other country experience for
Sri Lanka to overcome such constraints and initiate policy and
What is important to note is that Sri Lanka’s urbanisation is slow
compared to other heavily populated South Asian countries. Thus by
acting now, Sri Lanka can take full advantage of economic benefits of
urban transition, while mitigating the problems associated with fast
Published by the World Bank and UN Habitat.
Reviewed by Dr. Saman Kelegama Executive Director of the Institute of
Policy Studies of Sri Lanka.