CEPR Research Associate and lead HRRW blogger, Jake Johnston, published the following piece on VICE news today:
After the devastating earthquake that hit Haiti in January 2010, the US government responded with an ambitious plan to build 15,000 new houses in the country. But the ensuing program to put roofs over the heads of displaced Haitians has included a boondoggle of epic proportions at one $35 millionhousing development, where shoddy construction practices and faulty sewage systems are currently the subject of an ongoing investigation.
On February 3, the US-based company Thor Construction was suspended from receiving government contracts because of its work in Haiti. Another contractor with close ties to the Haitian president has so far escaped punishment.
As the relief effort's flagship housing project comes under increased scrutiny, interviews with involved parties and an analysis of contract documents, independent reports, and congressional testimony reveals that the problem is far from a simple case of contractor malfeasance. Rather, USAID, the government agency responsible for administering foreign civilian aid, simply failed to provide meaningful oversight of its contractors and ensure adequate results for US-taxpayer financed projects.
In April 2012, Thor received $18.4 million to build 750 houses at a site on Haiti's northern coast called Caracol-EKAM, part of the international community's high-profile reconstruction project at the Caracol Industrial Park. At a star-studded inauguration of the park in October 2012, then Secretary of State Hillary Clinton toured the new buildings and spoke of "affordable homes with clean running water, flush toilets, and reliable electricity... built to resist hurricanes and earthquakes."
In June 2013, the Government Accountability Office (GAO) found that the initial target of 15,000 total houses in Haiti had been reduced to just 2,600 while at the same time costs increased from $53 million to more than $90 million. USAID Assistant Administrator Beth Hogan explained to Congress that the high costs were "because of the requirements" that the contractor "meet international building codes, that it comply with federal building standards," and "that these materials would be disaster- and hurricane-proof." Hogan added that she was "very happy with the quality" of the houses.
But a year and a half later, Hogan's story is coming apart at the seams. In November, USAID awarded a $5 million no-bid contract to US-based Tetra Tech to provide remediation services for the Caracol houses. An independent assessment conducted in August 2014 "revealed numerous deficiencies," with the houses, including roofs not being fastened, use of "sub-specification" materials, and "other structural and drainage issues," according to a contract document. Given the location's susceptibility to hurricanes and other extreme weather events, the document noted repairs must be "carried out immediately in order to prevent possible harm to residents."