Case Study:

Low Cost Environmentally Friendly Housing

Project for Government Clerical Officers at
Battaramulla Sri Lanka-
A Pilot Project

by
Ministry of Housing & Construction,
Democratic Socialist Republic of Sri Lanka
1. Problem Issue:
Housing is a major problem in Sri Lanka. According to the latest statistics (2012, Census
and Statistics Survey) there is a shortage of 700,000 houses in Sri Lanka. Providing a
solutions to the housing problem is a priority national objective of the country. One
major reason for this problem is the high cost of construction. Therefore low and middle
income groups face a serious difficulty with the housing problem. However there are
several government and non-government programs that focus to assist the housing
problem of low-income group but no program exists to assist the housing problem of the
lower-middle income earners. As a result majority of lower-middle income groups in the
country faces serious problems to construct a house in the lifetime and lives on rent
basis. The lower-middle income group are income earners between Rs. 12,000-
Rs.20,000 (monthly income) according central bank categorization in Sri Lanka. Further
the housing problem of this group can be solved through simple assistance, facilitation
and coordination from the government as they have a mode of income. Furthermore all
government servants are eligible to low interest housing loans from government banks
(which is 4% interest rate while the market interest rate is 19%). The loan limit is based
on their salary and the governments can assist them to solve their house problem through
proper guidance and coordination. The Sri Lankan public sector comprises of 1.3
million government officers and majority of them falls to lower-middle income category.
Clerical service workers are non-executive lower-middle income office workers which
represents the largest group in public organizations. ‘Battaramulla’ in the Colombo city
is the major area where majority of government offices are located. According to a recent
survey conducted by the Ministry of Construction, Engineering Services, Housing &
Common Amenities (the main national organization responsible for housing), nearly
around 8,000 clerical workers work in the Battaramulla “Sethsiripaya” government
office complex and around 5000 of this group lives on rent basis paying rent prices
decided by the market.

1.2 Proposed Project:

As a solution the a project using low-cost housing technology developed with of
experiments at National Housing Development Authorit, Sri Lanka is proposed. The

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‘Low-Cost Environmentally Friendly Housing Project for Clerical Officers’ is a two
year pilot project which focus to construct 50 low-cost houses for lower-middle income
government clerical officers at Battaramulla Sri Lanka. Further the project aims to
promote low cost environmentally friendly housing technology as a solution to housing
problem in Sri Lanka.

The main stakeholders of the project will be the Ministry of Construction, Engineering
Services, Housing and Common Amenities, National Housing Development Authority
(NHDA) which is the project implementing agency, Bank of Ceylon, Battaramulla (Sri
Lanka) and beneficiaries.

The Key Benefits of the Project:

 The cost of construction is estimated to be 40% low than the traditional
construction methods.
 Technology has proved to be a sustainable and environmentally friendly
 Speeding up of time and reduced cost for administration activities due to
government intervention and the ability to use resources and technical expertise
of NHDA for which legal provisions are available.
 The Bank will have more assurance on loan repayment

The project location is at Mt. Clifford land at Hokandara, a government land situated 7
Kilometres from the Battaramulla government office complex. A high demand for the
project is identified through environmental scanning. Further through benefit/ Cost
analysis and feasibility analysis the project is identified as a highly beneficial and
affordable for the target category.

Funding for the project will be made from customer housing loans as well as from the
government consolidated fund. The construction cost of houses including the land value
will be covered from the funds of customers. As this project is not a profit oriented but a
service oriented project, the administrative costs will be covered from government
budget for which legal provisions are available according to the mandate of the
organization. The project will use resources of NHDA, such as the technical expertise,

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labour, machinery and equipment. And with the experience of this pilot project it is
planned to expand low-cost technology throughout the country in the future.