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Rebuilding housing post-Ditwah: Lessons from Sri Lanka’s Tsunami experience

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Dr Nisha Arunatilake

The Ditwah Cyclone ranks second only to the December 2004 Tsunami in terms of damage to housing in Sri Lanka’s recent history. According to the government’s Disaster Management Centre, as of 9th December 2025, 86,488 houses were partially or fully damaged due to Ditwah. This is only slightly fewer than the nearly 100,000 houses affected by the 2004 Tsunami. The government has announced a redevelopment programme to assist affected families in rebuilding their homes in safer locations. It has many similarities to the 2005 post-Tsunami housing programme and holds important insights as outlined in the Post-Disaster Housing: Lessons Learnt from the 2004 Tsunami of Sri Lanka, to inform the Ditwah Cyclone housing initiative.

The Tsunami housing study was based on two surveys by the Institute of Policy Studies of Sri Lanka (IPS) covering 600 affected families across six districts in the Southern and Eastern Provinces to evaluate the efficiency and effectiveness of the post-Tsunami housing programme. The first was done in April 2005 and the same households were re-surveyed after 18 months to assess progress.

The Post-Tsunami Housing Programme

A key feature of the 2005 post-Tsunami housing programme was the no-build buffer zone in the beachfront of affected areas, as it was deemed unsafe to build within this zone. Given this demarcation of the no-build zone, the post-Tsunami housing programme took a two-pronged approach. Families living outside the zone received cash grants to rebuild their homes (owner-driven rebuilding), while those residing inside the zone were provided with houses in alternative areas closer to their original residences (donor-driven relocation).

Owner-driven rebuilding: All affected individuals living outside the no-build buffer zone could receive a government grant to rebuild their homes. The grant, given in stages based on the extent of damage, required households to prove ownership. They could choose to rebuild their old home or construct a new one on land they owned. Families that effectively used their grant could also qualify for a LKR 500,000 concessionary loan to meet additional housing needs.

The selection of beneficiaries and the assessment of grant amounts followed a three-stage process. The Divisional Secretariat (DS) established a Damage Assessment Team (DAT) in each Grama Niladhari Division (GND) to support this process. The DAT included representatives from the relevant GND, donor agencies active in the area, members of the village rehabilitation committee (VRC), and technical officers from the DS. VRCs were created explicitly in each GND to incorporate community input during reconstruction. In the first stage, DAT compiled a list of households eligible for housing assistance. During the second stage, the GND and DS published preliminary lists of eligible families. Any disputes about eligibility were recorded and resolved at VRC meetings. Conflicts that could not be settled locally were escalated to a designated grievance committee at a higher level. After finalising the list, beneficiaries received certificates to confirm their eligibility.

Donor-driven relocation: All those living within the no-build buffer zone were promised a house built with the assistance of donors on land designated by the government. The households were not required to prove land ownership. The new homes needed to have at least 500 sq ft of space and access to electricity, running water, sanitation, and drainage facilities according to guidelines set by the Urban Development Authority (UDA).

The main challenge of this scheme was to find suitable land for relocation. The District Secretary and the UDA were responsible for identifying land for the move.

Post-Ditwah Housing Programme

The post-Ditwah housing programme too employs a two-pronged approach. Families living in unsafe locations are to be provided with either land or LKR 5 million to purchase new land, along with another LKR 5 million to construct a new house. In contrast, houses damaged by Ditwah are to be allocated up to LKR 2.5 million for rebuilding, depending on the extent of the damage.

Lessons for Ditwah from the Tsunami Housing Programme

Identifying beneficiaries

One main issue in the post-Tsunami housing programme was defining a ‘household’. A ‘household’ was understood as all individuals living together before the Tsunami. Clarifying this early on was important because, in some cases, extended families consisting of several nuclear families shared the same dwelling. The three-stage beneficiary identification process described earlier helped select beneficiaries transparently, with the involvement of a representative group of stakeholders.

Initially, during the post-Tsunami reconstruction phase, donors lacked an effective system for selecting beneficiaries. As many distributed donations by directly visiting affected places, those near main roads received most of the donations, while less visible groups received less. The eligibility lists were a valuable means of providing information on the needs of the affected.

The post-Ditwah housing programme could also benefit from clarity regarding who is eligible for different types of housing assistance.

Identifying house ownership

The lack of documents to prove ownership and identity was one of the main factors delaying the progress of the housing programme. According to the IPS Survey, 23% of those surveyed reported losing their deeds, and 41% reported losing their national identity cards during the Tsunami. Furthermore, the requirement to show land ownership made several households ineligible for a new house because some of the damaged homes were built on land that had been encroached upon.

The post-Ditwah reconstruction can avoid delays by establishing mechanisms to replace lost documents and, where that is not possible, other means of proving ownership, which is essential for accelerating beneficiary identification.

Process oversight and governance

The government formed the Task Force for Rebuilding the Nation (TAFREN) to ensure proper procedures in beneficiary identification and fund distribution in accordance with accounting standards. According to the IPS’ 2008 follow-up survey, the no-build buffer zone, difficulties in finding suitable land for family relocation, and issues with donor coordination were the primary reasons for delays in providing houses for the affected. The buffer zone was later relaxed to speed up reconstruction. In March 2006, the Reconstruction and Development Agency (RADA) was established to improve coordination between DSs and donors.

Effective donor coordination was essential to ensure that all beneficiaries received support without overlap, thereby optimising donation utilisation. During the post-Tsunami reconstruction phase, some donors’ reluctance to register with the DS led to ineligible people receiving houses, while eligible people did not. To resolve this, all donors – whether national, international, multinational, or private – supporting the reconstruction phase had to register with the DS. This enabled the government to match donors with affected individuals using eligibility lists. Even donors outside the official reconstruction programme were encouraged to register with the DS to avoid duplicate assistance.

Taking measures to register potential donors and map donor assistance to eligible lists helps to highlight gaps in the reconstruction programme. Such information helps attract new donors and ensures that all eligible persons receive assistance.

It is vital for the Ditwah-housing programme also to ensure that an identified agency is given authority to ensure proper governance and coordination.

Skills, materials for rebuilding

The lack of skills, materials, and labour for building their own houses was a primary obstacle to the progress of the owner-driven housing programme. The IPS 2005 survey revealed that 62% of the affected households were unable to manage the rebuilding of their own houses. The reconstruction boom following the Tsunami increased the input prices, making the initial allocation of funds insufficient. Further, identifying land for relocation was a central issue during the post-Tsunami relocation period.

Ensuring the availability of necessary inputs and skills is essential for speeding up reconstruction in the post-Ditwah reconstruction phase. Early identification of suitable land for relocating families and ensuring that allocated plots are ideal for beneficiaries’ lifestyles are essential to expedite reconstruction and ensure beneficiary welfare.

The measures announced by the government to provide grants to Ditwah Cyclone affected households to move to safe locations and rebuild their houses are commendable. Expediting the reconstruction process by minimising bottlenecks and clarifying beneficiary eligibility is essential to speed up reconstruction, as described above, thereby improving the welfare of those affected.

By Dr Nisha Arunatilake, Director of Research, Institute of Policy Studies of Sri Lanka (IPS)



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Norochocholai coal-fired power complex seen as facing staggering financial losses

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While the Parliamentary debates were purely focused on missing the calorific value benchmark, the excessive Ash content (21% in the samples tested) is also a reason to reject the shipment, as maximum allowed ash percentage in the tender is 16%. This means even if the tests clear the coal on calorific values, the shipments still must be rejected based on ash content as per tender terms. This fly ash and low moisture will create a massive ecological disaster to the communities in Norachcholai - Withanage

Sri Lanka’s first and largest coal-fired power complex at Norochcholai is staring at mounting financial losses running into millions of rupees as low-quality coal imports, rejected shipments and unusable stockpiles disrupt operations and expose deep flaws in coal procurement, power sector and environmental experts warned yesterday.

Energy sector sources told The Island Financial Review the economic damage has already begun, with rejected coal stocks, delayed payments and declining plant efficiency forcing the system to absorb losses from under-performance, additional handling costs and the risk of turning to more expensive backup generation.

Insiders estimate that continued reliance on sub-standard coal could result in tens of millions of rupees in losses per day, once reduced output, higher fuel burn and maintenance costs are factored in.

At the centre of the controversy is a recent coal shipment procured by the Lanka Coal Company (LCC), which has come under intense scrutiny after laboratory tests reportedly showed ash content of around 21%, far exceeding the 16% maximum allowed under tender conditions.

While parliamentary debate has focused narrowly on whether the coal meets the required calorific value, experts stress that excessive ash alone is sufficient grounds for outright rejection, regardless of calorific performance.

The situation worsened after coal stocks at the Norochcholai Coal-Fired Power Complex were recently rejected, leaving shipments in limbo and payments withheld. Power sector officials say this has resulted in logistical losses, demurrage risks and operational uncertainty, while existing low-quality coal stockpiles continue to deteriorate in storage.

“Coal that does not meet specifications is not just unusable — it becomes a financial liability, a senior electrical engineer said.

High-ash coal reduces boiler efficiency, increases fly ash generation and accelerates wear on ash handling systems, electrostatic precipitators and boilers — translating into higher maintenance costs and forced outages. Industry analysts warn that these hidden costs ultimately find their way into CEB losses or consumer tariffs.

Environmental Scientist Hemantha Withanage warned that accepting or burning such coal would push Norochcholai into a new environmental crisis, with serious consequences for communities in Norochcholai, Puttalam and surrounding areas.

“This is not just about calorific value. High ash coal means significantly more fly ash, Withanage told The Island Financial Review. “With low moisture and excessive ash, particulate matter spreads easily, contaminating air, soil and water. This is a massive ecological threat that will directly affect public health.”

He stressed that fly ash contains toxic heavy metals and fine particulates linked to respiratory illness and long-term environmental degradation. “If tender conditions are ignored, the cost will be paid by communities, not the suppliers, Withanage said.

Critics say the crisis exposes serious weaknesses in coal procurement oversight, with questions now being raised about supplier selection, quality verification and accountability. They argue that repeatedly importing low-quality coal — only to reject it or burn it at reduced efficiency — amounts to systemic mismanagement of public funds.

By Ifham Nizam

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IRCSL launches ambitious mission to transform Sri Lanka’s insurance sector

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Dr. Ajith Raveendra De Mel

In a groundbreaking initiative, Insurance Regulatory Commission of Sri Lanka (IRCSL), announced an ambitious mission aimed at transforming the insurance industry into a cornerstone of national economic resilience and social stability.

To address this, the IRCSL will launch a nationwide education campaign titled “Insurance for All: For a Secure Future,” focusing on enhancing financial literacy across the country said Dr. Ajith Raveendra De Mel, the newly appointed Chairman IRCSL. Few sample events have already commenced last year in Matara, Jaffna and Kilinochchi that have set a strong precedent for future initiatives. “The positive response from participants highlighted the strong need for direct engagement and community-level awareness,” he said.

The IRCSL has also partnered with the Ministry of Education to integrate insurance literacy into the national curriculum, starting as early as Grade 5. This initiative aims to embed core concepts of risk management and financial protection, preparing students for future roles in the insurance industry. Complementing educational efforts, the IRCSL is also hosting an Inter-University Quiz Competition focused on insurance and financial literacy, aiming to engage university students and cultivate future thought leaders in the sector. Additionally, an e-Newsletter will keep stakeholders informed about industry updates and regulatory developments.

Dr. De Mel emphasized that this transformation it is not just about increasing insurance penetration, currently at a mere 1.1%, but about fostering a financially literate society where every citizen, family, and business is shielded from unforeseen risks. He said “Our mission is to cultivate a fully insured, financially literate, and future-ready society. The journey ahead involves profound regulatory, technological, and educational reform to create a modern, transparent, and robust regulatory environment that earns public trust while promoting innovation and sustainable growth in the industry.”

He pointed out the critical need for awareness, noting that many Sri Lankans perceive insurance as complex or exclusive to the wealthy. “We need to change how people think about insurance. Our goal is to make it simple, relatable, and accessible to everyone, particularly in rural and underserved communities,” he explained. The IRCSL will collaborate closely with the Insurance Association of Sri Lanka (IASL), the Sri Lanka Insurance Brokers Association (SLIBA), and the Sri Lanka Insurance Institute (SLII) to ensure that the message of financial preparedness reaches all corners of the nation. As Sri Lanka stands on the brink of an insurance transformation, Dr. De Mel’s vision promises a secure future driven by informed financial decisions and enhanced protection against life’s uncertainties.

The IRCSL is also focusing on digital transformation, enhancing operational excellence within the insurance sector. Key initiatives include establishing a Centralized Motor Insurance Database to improve transparency and efficiency in motor insurance, and advancing health insurance through digital integration, including standardized disease coding and electronic health records.

To ensure global competitiveness, the IRCSL is benchmarking against international best practices. A recent study tour to India has provided valuable insights into implementing risk-based supervision and capital frameworks, as well as developing accessible insurance products for underserved communities.

As the IRCSL approaches its 25th anniversary, it emphasizes the importance of staff development and alignment with other financial regulatory bodies to maintain high professional standards. The upcoming OECD/ADBI Roundtable on Insurance and Retirement Savings in Asia will further position Sri Lanka as a leader in insurance discussions, fostering regional collaboration and innovation.

by Claude Gunasekera

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Sri Lanka’s first public allergy awareness wristbands

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LAUGFS Life Sciences, in collaboration with the Medical Research Institute (MRI), Colombo, has launched Sri Lanka’s first-ever publicly driven allergy awareness wristbands, a groundbreaking initiative aimed at improving patient safety and preparedness in medical emergencies. The wristbands provide essential information about drug sensitivities, allowing healthcare professionals to respond quickly and effectively when time is critical.

The official handover ceremony featured distinguished medical experts, including Dr. Dhanushka Dassanayake, Consultant Immunologist and Head of the Department of Immunology – MRI, Dr. Rajiva De Silva, Senior Consultant Immunologist – MRI and Dr. Prabath Amerasinghe, Deputy Director – MRI, marking a historic milestone in patient care in the country.

Commenting on the initiative, Dr. Rajiv Perera, CEO of LAUGFS Life Sciences, said, we are proud to partner with the Medical Research Institute to launch Sri Lanka’s first-ever publicly driven allergy awareness wristbands. This initiative underscores our commitment to patient-centric healthcare by providing critical information that can save lives during emergencies. We believe that thoughtful collaborations like this can have a meaningful impact on patient safety, and we look forward to expanding the program to cover additional drugs and allergens, further advancing healthcare standards across the country.

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