Colombo-Kandy expressway: compensation for those affected

by Dr. Chandana Jayalath

The Central Expressway, also known as the Colombo-Kandy Expressway the proposed road project will link Colombo and Kandy.

It will essentially duplicate the route of the A1 road (Colombo-Kandy Road), thereby reducing traffic congestion on the A1 road to a great extent. The benefits would be enormous in the long run as it is one of the few projects of national significance.

The first stage from Kadawatha to Ambepussa (48.2 km) will be a four-lane, divided carriageway (with room for two more lanes to be added in the future). 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 approximately Rs. 70 bn, with more recent costs estimated at Rs. 130 bn. However, these figures will definitely vary as the work progresses.

The investor is expected to fully finance the building and also maintain and operate the expressway, collect the toll and after an agreed period transfer it to the government.

The investor is expected the design the road along the pre-selected corridor, acquire land, pay compensation and construct it with the facilities.

Compensation

The design and construction would be under the supervision of a reputed international firm, selected by the investor.

He will implement the Resettlement Action Plan subject to RDA approval and will identify the areas suitable for resettlement for those affected.

Building expressways through paddy fields is more economical than building them through densely built areas. This principle is economically viable.

Paddy lands on the first 30 kilometres of the proposed highway are now cultivated, to a large extent. The Enderamulla-Ambepussa stretch of the Expressway will be constructed parallel to the railway track, over paddy, marshy and uncultivated lands. However, a considerable extent of irrigable land will experience a severe topographical change.

It is not known whether the responsibility of acquisition and payment of compensation has been passed on to the investor.

In the 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 on a par with payments made in previous projects.

Compensation is a sensitive issue when large scale private properties and settlements are disturbed. As such, it is imperative to have a matrix in place that proposes the basis of eligibility and extent of payment for all types 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 anomalies over compensation and unnecessary political interference. Since the policies of 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 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 the masses are fully met. Those affected should be fully informed and closely consulted on resettlement and compensation options.

They must be contacted humanely without any influence. It is natural that people affected by resettlement will be 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, cost increases or even abandonment.

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 the use of the media in scattered or broad areas.

Humane basis

Compensation, as said earlier, is one of the key considerations where 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 houses, land, crops and vegetation, source of income, loss of business opportunity, and relocation costs. Accordingly, the cost of a house ascertained merely on a square metre basis with a budgetary restriction does not amount to fair compensation. Costs depend on a myriad factors such as type of construction, height and volume, number of rooms, types of finishes used, external amenities, and locational factors that heavily influence the quality, workmanship and performance characteristics inherited in these houses.

There will also be professional fees for design, supervision and a fee for government agencies including stamp duties. Land too has variables such as location, adjacent plots, local government payments, notary charges, and stamp duty.

In a nutshell, the value should replace the loss due to displacement and not the value of the property decided by market demand and supply forces as this involuntary resettlement is not the result of a buying and selling transaction.

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.

Assets

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 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 needed to duplicate another option. However, care must be taken as there may be artificial price hikes in adjacent lands. Whatever the method, compensation must be reflective of the foregoing considerations which will, if implemented, logically and expeditiously, render social justice and human worth for those who sacrificed their urumaya on behalf of a nationally important project.