When disasters destroy infrastructure, their opportunity cost becomes painfully evident (Palliyaguru et al. 2008). Construction represents most of every nation’s savings and the role of infrastructure in people’s daily activities and economic growth of a country is apparent (Palliyaguru et al. 2007). The physical infrastructure built through construction activity at great expense is the nation’s economic backbone. It constitutes the arteries for the facilitation of productive activity and the spreading of the benefits of growth by enabling goods and services to be distributed (Ofori, 2002). Infrastructure is critical to a safe and a resilient economy (Palliyaguru, et al. 2008). On the other hand, infrastructure has strong supply and demand side economic linkages (ESCAP, 2006). In much the same way, infrastructure caters directly to demand. Improving trade efficiency can do much more to spur economic growth than tariff reform and improving infrastructure is a major factor in improving the efficiency of trade. It is found that the availability of good quality physical infrastructure improves the climate for foreign direct investment (FDI) by reducing the ‘cost of total investment’ incurred by foreign investors and thus raising the rate of return.
[Source: Palliyaguru, R., Amaratunga, D. & Haigh, R. (2007), “Necessity of Post Disaster Infrastructure Reconstruction and Challenges Confront: The Case of Indian Ocean Tsunami”, Proceedings of 7th International Postgraduate Conference in the Built and Human Environment, Salford Quays, UK: 28th – 29th March]
Image: Tsunami damage to a railway in Sri Lanka
Sri Lanka experiences frequent natural hazards in the form of droughts, floods, landslides and cyclones and coastal erosion affecting hundreds of people over the years despite the tropical climate and heavy rainfall. The enormity of this particular tragedy generated an outpouring of aid from both the international and local communities. With an overwhelming immediate assistance to communities and local governments in restarting to function as speedily as possible and to rebuild their infrastructure and housing, they were able to again have normal lives and eventually recover from the trauma of the tsunami. In addition to immediate relief, the reconstruction phase in Sri Lanka was estimated to need some EUR 1.5 billion and would take 3-5 years. Sri Lanka received this full amount in pledges.
The massive damage to infrastructure and capital assets estimated at $1 billion, 5 per cent of GDP with a large proportion of losses concentrated in housing, tourism, fisheries and transportation. Coastal infrastructure, namely roads, railways, power, telecommunications, water supply and fishing ports were also significantly affected (ADB, 2006). Major infrastructure in the country was severely damaged, from which most of them have been continuously maintained without any significant capacity upgrade for nearly 100 years. Approximately 800km of national roads, together with about 1500km of provincial and local government roads were damaged due to the tidal waves (Palliyaguru et al. 2006). The road and rail transport from Colombo to Hambantota in the south and some parts of the Puttalam district were badly damaged along with 25 bridges and causeways located in the coastal belt of the country. 22,660 households lost electricity, 6500 Km of service lines & 600 Km of low voltage lines and 50 Km of medium voltage lines were damaged. Displaced persons were affected, 10 pipe borne water schemes were damaged and 15,000 wells contaminated due to salt water intrusion. Potable water treatment and reticulation systems were damaged or destroyed. Telecommunications in 10 districts were badly affected. Telephones to important places like Hospitals, Police Stations and Government offices completely disconnected. 25 Telephone Exchanges (PABX) were damaged along with cable networks in Hambantota, Matara, Galle, Kalutara, Panadura, Trincomalee, Batticaloa, Ampara, Kalmunai and Jaffna. Several transmission towers & telephone exchanges in the coastal belt were also severely damaged.
Key income generators in the country lost their livelihoods, causing greater susceptibility to poverty in fisheries, tourism and coastal communities. The largest share of output losses was due to lost income and production. In the fishing industry 8 out of 12 fishery harbours were completely destroyed leaving another 2 harbours with considerable damage. 75% of fishing boats were reported to have been damaged (Tsunami recovery & reconstruction in Sri Lanka, www.lankamission.org), with 16,919 fishing boats lost or destroyed and a further 7,266 damaged, including approximate 1 million fishing nets. Many of the landing sites around the coast were also seriously damaged. In the tourism industry 65% of the room capacity in the hotel sector was affected.