TSUNAMI REBUILDING BILL OUTGROWS WORLD'S GIFTS

Reconstruction could cost Â£6.65bn, but so far only Â£2.92bn has been
pledged

Owen Bowcott, The Guardian, February 17 2005

The total cost of reconstructing areas devastated by the Asian tsunami
could be as high as $12.5bn (£6.65bn), according to the first overall
assessment by the UN.

The estimate comes as charities around the world world wide start closing
their appeals because they believe enough has been raised.
But so far promises for only $5.5bn (£2.92bn) have been received. The UN
development programme, which is coordinating the next phase of the aid
effort, fears it may yet suffer a shortfall in funds needed to pay for
longer term reconstruction.

In Britain, the Disasters Emergency Committee is due to announce today
that it will close its most successful appeal ever on February 26,
although it says that donations are still rolling in from sponsored runs
and supermarket collections.

It has collected more than £300m, and another £50m has been raised
independently by other British charities.

Initial estimates place the bill for Indonesia at up to $5bn (£2.7bn) and
for Sri Lanka $3.5bn (£1.86bn).Including India, the Maldives and Thailand,
the total reconstruction cost are expected to be between $9.8bn and
$12.5bn .

There is confusion, consequently, whether the extraordinary scale of the
world's generosity will be sufficient to deal with the unprecedented ma!
gnitude of the destruction inflicted by the disaster.

The massive sums involved and the complexity of the operation have also
caused a fear that money could be siphoned off by corruption and that
rival aid agencies may inadvertently duplicate aid projects.

The fluctuation in expectations is illustrated by the fact that the
foreign secretary, Jack Straw, said on January 3 that it was "almost
certain" the government would match the donations made by the public.

That now appears to have been quietly shelved.

So far, the UK government has announced that it will give £75m directly,
plus another £10m through the EU. It has also promised £50m over the next
decade in debt relief to affected nations.

The UN, embarrassed by the shortcomings of its oil for food programme in
Iraq, is determined that the tsunami relief programme should set new
standards in transparency and accountability.

Hafiz Pasha, the UN assistant secretary general in charge o! f the global
tsunami task force told the Guardian this week that UN agencies were still
$270m (£144m) short of the funds requested in the first appeal for the
recovery stage of the programme.

"Of that, $180m has been promised but has not yet materialised," Mr Pasha,
a former Pakistani finance minister, explained.

"The remainder is not yet committed."

In London, on his way to visit the affected countries, Mr Pasha hopes to
persuade the Department for International Development and aid agencies to
donate money raised but not yet allocated to specific projects.

The priority now, he says, is repairing the basic infrastructure of roads,
hospitals and schools. The difficult question, which has not yet been
faced, is deciding how much should be rebuilt of communities which have
been virtually eradicated.

"In parts of Aceh, it's like Ground Zero. People will not necessarily go
back to neighbourhoods they lived in," he said.

"There are demogr! aphic issues which could lead to [different]
resettlement patterns. Both Sri Lanka and Indonesia want to resettle
people a significant way back from the sea."

One recurrent criticism of aid work has been that cash is spent on foreign
consultants' fees.

"We have had to take on 300 extra staff in Indonesia, the Maldives and Sri
Lanka, but only 60 are expatriates," Mr Pasha said.

"But our aim is that the cost of delivering the programme should be not
more than 5% of overall costs."

"We are worried about corruption. One of the things we have done is to
strengthen our procurement processes in Bangkok to ensure that [our
operation] is competitive and transparent.

"We are setting up accountancy systems with firms such as PriceWaterhouse,
DeLoitte and Touche and Accenture. A lot of it is pro-bono work. We want
to ensure the money really gets to the target."

The other financial fear has been that the outpouring of generosity will
divert fund! s from less dramatic disasters.

Earlier this week the executive director of the UN world food programme,
James Morris, said: "We [must] ensure that the 'tsunami effect' does not
ripple across Africa, drawing funds away from humanitarian operations
there and adding Sudanese, Angolan and Liberian victims to its toll."