India, Sri Lanka sign MoU to build 1200 houses in Hambantota
October 28, 2017

India on 26 October 2017 signed a Memorandum of Understanding (MoU) with Sri Lanka to build 1200 houses in Hambantota, a southern port city of Sri Lanka. 

The MoU was signed today by Indian High Commissioner to Sri Lanka Taranjit Singh Sandhu and Sri Lanka's Secretary to the Ministry of Housing and Construction W.K.K. Athukorala.

Key Highlights

• The 1200 houses will be constructed through 50 model villages using Indian grant assistance of Rs 600 million.
• Out of these 1200 houses, 600 will be constructed in the Southern Province, while the remaining will be constructed across Sri Lanka with one model village in each of the 25 districts. 
• The project will target low income landless and homeless beneficiaries. 
• A cash grant of Rs 500000 will be provided to each beneficiary in five instalments.

India's Infrastructural assistance to Sri Lanka

• These projects are in continuation of India's commitment to assist Sri Lanka in the development of housing infrastructure. 
• India has already committed 50000 houses in the North and East Sri Lanka, out of which nearly 46000 houses have been completed. 
• Construction of 4000 houses is currently ongoing in the plantation sector in Central and Uva Provinces of Sri Lanka. 
• In May 2017, Prime Minister Narendra Modi committed another 10000 houses for beneficiaries in the plantation sector.

Background

The coastal city of Hambantota gained strategic significance after former President Mahinda Rajapaksa built a massive port and an airport with huge Chinese loans. In July 2017, Rajpaksa government sold majority stakes of the port to China to manage outstanding USD 8 billion debt it owes China.

Local residents, including supporters of Rajapaksa, earlier protested the selling of national assets to foreign entities. 

Earlier in October 2017, protesters clashed with the police outside the Indian consulate in Hambantota after media reported government’s move to lease out a nearby airport to India.