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Tuesday, July 27, 1999 Published at 12:50 GMT 13:50 UK

World: Europe

Bank lowers bill for Kosovo reconstruction

Continuing arson attacks push up the reconstruction bill

The World Bank has estimated the cost of rebuilding Kosovo at $1.23 billion - considerably lower than previous estimates.

Kosovo: Special Report
"The amount of the damage is less than we thought," said Rory O'Sullivan, the Bank's special representative for Southeast Europe Reconstruction.

The Bank - working in collaboration with the EU's International Management Group (IMG) - has estimated the bill for repairing or rebuilding homes at $1.19 billion.

The total figure for reconstruction takes into account repairs to schools, health care facilities and electrical and water systems.

The EC's Roy Dickinson: "The political will of donors is needed to get the people through this winter"
In April, EU investigators proposed a "combined spending estimate" of at least $3bn.

Twenty European Commission officials have spent the past six weeks visiting 1,300 Kosovo villages to assess the rebuilding requirements.

"We found 78,000 houses that are beyond repair or destroyed," Roy Dickinson of the EC in Pristina told BBC World.

"The EU has said all along that it's a European problem and we are ready to bear the major share of the burden," Mr Dickinson said, adding that Europe needed help from other countries and institutions.

"It's the political will of donors that's going to count if we're going to get people through this winter," he said.

'Zero economic activity'

But Mr O'Sullivan warned that the World Bank's new, lower figure does not take into account lost production during the 16 months of conflict.

[ image: Land-mines have delayed the resumption of farming]
Land-mines have delayed the resumption of farming
"On the business and enterprise side we were struck by the total lack of economic activity. I mean it really is practically zero in terms of industry and enterprise," he told a Brussels news conference.

But the Bank agrees with aid agencies that short-term humanitarian assistance is needed badly - between $40m and $75m over the next couple of months for housing and other urgent needs.

The Bank's President, James Wolfensohn - who has been visiting the province ahead of this week's donor meetings - has said that money given now to prepare for winter would be "worth 10 times as much as in a year's time".

[ image: Churches as well as homes bore the brunt of war]
Churches as well as homes bore the brunt of war
One important short-term factor, international experts agree, is to get a real budget in place for Kosovo.

"The issue that particularly concentrated our attention was the need for urgent funds to run the administration in Kosovo, given the fact that there are no tax revenues as yet," Mr O'Sullivan said.

The World Bank and the EU are co-chairing an international donor conference to co-ordinate the Kosovo effort in Brussels on Wednesday.

That is to be followed by a second "donor summit" - involving more than 100 nations, international lenders and NGOs - in the Bosnian capital, Sarajevo, on Friday.

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30 Jun 99†|†Europe
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