UDA struggles to maintain displaced residents of Tata project
View(s):The Urban Development Authority (UDA) is short of cash to continue rental payments for 582 families evicted to make way for Indian Tata Housing’s US$429.5 million mixed development project at Slave Island, Colombo.
This is because the Indian company is yet to fulfill its financial obligations in accordance with contractual agreements, official sources revealed. Work on the project has been suspended pending sorting of some issues between the new Government and the developer.
Tata Housing India, shortly before launching of the first phase of the project in May 2014 to build a four tower apartment block for displaced residents at a 3-acre block of land in Slave Island Colombo, made a financial commitment to pay US$20 million to residents through the UDA. That amount has been paid.
However a senior official of the UDA told the Business Times that the money reimbursed by One-Colombo Project (Pvt) Ltd, a subsidiary of Tata Housing Development Company Ltd, is only sufficient to pay rentals of the displaced for less than 15 months. When contacted by the Business Times for comments on this matter, Tata sent an e-mail, stating that “in accordance with the terms of the contractual understanding with UDA, One-Colombo has reimbursed the rental and compensation payment to the UDA as per the agreed payment schedule”.
The total cost for providing relocation houses for displaced residents was estimated at $43.6 million which included rental payments for temporary accommodation of the evicted families for 30 months as it was planned to build this four tower apartment block for these families during this period.
According to the agreement, during the 30-month construction period of the housing complex, the Indian company had agreed to pay a monthly rent allowance to displaced residents ranging from Rs. 15,000 rupees to Rs. 52,000 based on the floor area they wer occupying at Slave Island.