Roads, rails, rebel area in Sri Lanka tsunami plan

COLOMBO - Sri Lanka plans to use more than half of its US$3.5 billion ($5.02 billion) tsunami recovery budget to build new towns, roads and railway and give rebel-held areas a piece of the pie, documents showed on Friday.

A copy of the draft recovery plan obtained by Reuters makes no mention of the Tamil Tiger rebels, who accuse the government of denying them aid. But it outlines projects in at least one district that is almost entirely in rebel hands.

Officials said funds would go into rebel territory, something that could stir controversy among the Sinhalese majority, while the prospect of gleaming new towns and transport links eating into a donor funded recovery budget was already under fire.

"If the plan goes through as it is, it would be taking immoral advantage of the suffering of people. The world gave this money because they saw people suffering, and the money should go to the victims," said Jehan Perera, director of the National Peace Council.

The government announced the recovery blueprint on Monday, the first for any country that suffered major damage from the Dec. 26 tsunami, which killed more than 226,000 people, 38,000 of them in Sri Lanka.

It did not release the draft document to the public and said that details could change once it was discussed with the opposition and relief agencies.

"Don't depend on this plan. It is being discussed and donors are chipping in as well. By next week it will be changed and refined." Lalith Weeratunga, a member of the Task Force to Rebuild the Nation, said when asked to respond to the criticism.

The total cost of US$3.484 billion is divided among three phases -- emergency repairs, reconstruction and improvements and additions. The last phase will take up US$1.5 billion, most of that on roads, railways, water supply projects and tourism.

The reconstruction phase of the plan also allocates US$500 million for rebuilding 62 townships with apartments, stadiums and commercial space.

Some towns are being moved to new locations, including Hambantota, the devastated southern town, where the reconstruction drive was launched on Wednesday.

"There are a lot of donors interested." said Weeratunga, who is also secretary to the prime minister.

Although trumpeted as a comprehensive reconstruction plan in the state media, the document appeared to be hastily drawn up. Even some of the numbers do not add up.

The document lists several projects in the northern Mullaittivu district which is virtually entirely rebel held, but makes no mention of any plans to work with the Tigers who waged a 20-year war for autonomy until a ceasefire three years ago.

Asked how the government planned to allow aid to go into rebel-held areas Weeratunga said: "Obviously it will... but I don't know how it will be done."

Aid has become a major bone of contention, with the Tigers appealing for donors to deal directly with them and accusing the government of diverting funds from minority Tamil areas.

Norwegian mediators travel to rebel territory for talks on Saturday expected to deal with reconstruction as well as the peace process.

"We are not happy with the distribution...of aid. So we'll have to have a serious discussion with the Norwegian facilitators to work out a common mechanism so that there could be an equal distribution of relief from the world community," said Anton Balasingham, the Tigers' chief negotiator.

Channelling funds into Mullaittivu would be impossible without the cooperation of the rebels, but that could spark a backlash among Sinhalese in the south.

A key Marxist partner in the ruling coalition is a vehement opponent peace talks with the rebels and has stepped up criticism of the government's handling of aid.

More than 64,000 people died in two decades of ethnic war in the north and east.

- REUTERS