HAITI RECONSTRUCTION

USAID Infrastructure 

Projects Have Had Mixed 

Results and Face 

Sustainability Challenges

Statement of David Gootnick, Director 

International Affairs and Trade

Testimony 

Before the Committee on Foreign 

Affairs, House of Representatives

For Release on Delivery 

Expected at 10:00 a.m. EDT

Wednesday, October 9, 2013

GAO-14-47T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-47T, a testimony before 

the Committee on Foreign Affairs, House of 

Representatives

October 9, 2013

HAITI RECONSTRUCTION

USAID Infrastructure Projects Have Had Mixed 

Results and Face Sustainability Challenges

Why GAO Did This Study

On January 12, 2010, an earthquake in 

Haiti is estimated to have caused 

about 230,000 deaths, resulted in 

300,000 injuries, and displaced about 2 

million persons. Following immediate 

relief efforts, Congress provided $1.14 

billion for Haiti reconstruction in the 

Supplemental Appropriations Act, 

2010. USAID, which is responsible for 

implementing $651 million of this 

amount, has allocated about $268

million of this and other funding to 

construct a power plant and port to 

support the CIP in northern Haiti and 

permanent housing in several locations

in the Port-au-Prince, St-Marc, and 

Cap-Haïtien areas. 

This testimony draws from GAO’s June 

2013 report on Haiti reconstruction and 

further examines (1) USAID’s funding 

obligations and disbursements; (2) 

USAID’s progress in two CIP-related 

activities—a power plant and port; and 

(3) USAID’s progress in constructing 

permanent housing. For this statement, 

GAO updated funding information and 

data regarding progress, based on 

information from USAID and 

Department of State officials. 

What GAO Recommends

GAO is not making new 

recommendations in this testimony. In 

its June 2013 report, GAO 

recommended that USAID (1) hire a 

port engineer to oversee port planning 

and construction and (2) provide timely 

community support mechanisms for 

each new settlement to help ensure 

the sustainability of its permanent 

housing program. USAID agreed with 

both recommendations. 

What GAO Found

As of June 30, 2013, the U.S. Agency for International Development (USAID) 

had obligated $336 million (52 percent) and disbursed $229.5 million (35 percent)

of $651 million in funding for Haiti earthquake reconstruction from the 

Supplemental Appropriations Act, 2010.

USAID has allocated $170.6 million to construct a power plant and port to 

support the newly developed Caracol Industrial Park (CIP). According to USAID 

documents and other studies, the CIP, power plant, and port are interdependent; 

each must be completed and remain viable for the others to succeed. USAID 

completed the first phase of the CIP power plant in time to supply the first CIP 

tenant with power. Port construction will begin more than 2 years later than 

originally planned, in part because of a lack of USAID expertise in port planning 

at the Haiti mission. According to current estimates of port construction costs, 

USAID funding will be insufficient to cover a majority of projected costs. The 

estimated gap of more than $117 million to $189 million is larger than initially 

estimated, and it is unclear whether the Haitian government will be able to find a 

private sector company willing to finance the remainder of the project. 

USAID has reduced the targets for its permanent housing program in Haiti, to 

which it has allocated $97.3 million. The agency decreased the projected number 

of houses by more than 80 percent, from 15,000 to 2,649. The estimated number 

of beneficiaries was reduced from a range of 75,000 to 90,000 to its current 

estimate of approximately 13,200 to 15,900. These reductions resulted from 

inaccurate original cost estimates that used inappropriate cost comparisons and 

from the Haitian government’s request for larger houses with improvements such 

as flush toilets. USAID currently estimates that construction will be completed 

more than 2 years later than initially scheduled. Delays occurred primarily 

because of difficulties in securing land titles and coordinating with partner donors. 

USAID is attempting to mitigate potential sustainability risks, such as affordability 

and community cohesion, through community development mechanisms. 

However, it is uncertain whether these mechanisms will fully cover all sites. 

View GAO-14-47T. For more information, 

contact David Gootnick at (202) 512-3149 or 

gootnickd@gao.gov.
 

Page 1 GAO-14-47T 

Chairman Royce, Ranking Member Engel, and Members of the 

Committee:

Thank you for this opportunity to discuss our recent work reviewing U.S.

efforts to aid Haiti in its reconstruction from the earthquake that struck on 

January 12, 2010.1

In July 2010, the U.S. Congress passed the Supplemental Appropriations 

Act, 2010,

That earthquake, centered near Port-au-Prince, Haiti, 

caused physical, social, and economic devastation to the poorest country 

in the Western hemisphere. The earthquake is estimated to have caused 

approximately 230,000 deaths, resulted in 300,000 injuries, and displaced 

approximately 2 million people from their homes. In June 2013, the 

International Organization for Migration estimated that about 279,000 

displaced persons remained in camps. According to Department of State 

(State) and U.S. Agency for International Development (USAID) officials, 

the disaster generated the largest international humanitarian relief effort 

ever undertaken and prompted the international community to pledge 

billions for reconstruction, including a pledge of $1.15 billion over the first 

2 years by the U.S. government—more than triple the average annual 

assistance provided by the U.S. government to Haiti between 2006 and 

2009.

2 which provided more than $1.14 billion in reconstruction funds 

for Haiti, including $651 million provided to USAID for bilateral 

reconstruction activities. USAID has allocated approximately 40 percent 

of this supplemental funding,3

 

1

GAO, Haiti Reconstruction: USAID Infrastructure Projects Have Had Mixed Results and 

Face Sustainability Challenges, 

as well as other funds, to support the 

construction of (1) a power plant that will provide electricity for the new 

Caracol Industrial Park (CIP) in northern Haiti; (2) a new port near the 

CIP; and (3) permanent housing in new settlements in the Port-au-Prince, 

St-Marc, and Cap-Haïtien areas. My statement draws from our June 2013 

GAO-13-558 (Washington, D.C.: June 18, 2013). We also 

previously reported on U.S. reconstruction efforts in Haiti in Haiti Reconstruction: U.S. 

Efforts Have Begun, Expanded Oversight Still to Be Implemented, GAO-11-415

(Washington, D.C.: May 19, 2011); and Haiti Reconstruction: Factors Contributing to 

Delays in USAID Infrastructure Construction, GAO-12-68 (Washington, D.C.: Nov. 16, 

2011).

2

Supplemental Appropriations Act, 2010, Pub. L. No. 111-212, 124 Stat. 2302, 2323 (July 

29, 2010). 

3

The Haiti reconstruction funding provided in the 2010 supplemental appropriations law is 

appropriated for the Economic Support Fund account.

 
 

Page 2 GAO-14-47T 

report that reviewed (1) USAID’s funding obligations and disbursements; 

(2) USAID’s progress on the CIP-related power plant and port; and (3) 

USAID’s progress in constructing permanent housing.4

For our June 2013 report, we reviewed reports, documents, and funding 

data and interviewed officials from USAID and State in Washington, D.C., 

and Haiti. To assess the reliability of funding data, we examined USAID 

and State data sources and conducted interviews with USAID and State 

officials. We determined that the data we used were sufficiently reliable 

for our purpose of reviewing U.S. funding provided for Haiti 

reconstruction. In Haiti, we visited sites under construction or planned for 

construction for the power plant, port, and permanent housing, and visited 

the CIP.5

The work on which this testimony is based was conducted in accordance 

with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on 

our audit objectives.

For this statement, in August 2013, we updated funding 

information, assessed the reliability of these funding data and determined 

the data to be reliable, and further assessed progress based on 

information provided by USAID and State officials. The information 

contained in this testimony was reviewed for technical accuracy by 

USAID officials.

In response to the destruction caused by the earthquake, Congress 

provided more than $1.14 billion in reconstruction funds for Haiti. As table 

1 shows, USAID received $651 million of these funds for bilateral 

reconstruction activities.

 

4

GAO-13-558. 

5

Our June 2013 report contains a detailed description of its scope and methodology. 

Background 
 

Page 3 GAO-14-47T 

Table 1: Fiscal Year 2010 Supplemental Funding for Post-Earthquake 

Reconstruction in Haiti, as of June 30, 2013

Dollars in millions

Recipient Reconstruction amount

State and USAID $917.7

State 144.7

USAID 773.0

Bilateral reconstruction activities

a

651.0

Transferred to Haiti Reconstruction Fund 120.0 b

Treasury 219.8

USAID Inspector General 4.5

Total $1,142.0

Source: USAID and the Supplemental Appropriations Act, 2010 (Pub. L. No. 111-212).

USAID = U.S. Agency for International Development

a

Out of the $773.0 million provided to USAID, the agency transferred $2.0 million to the Smithsonian 

Institution.

b

The Haiti Reconstruction Fund is a multidonor trust fund organized to help finance high-priority postearthquake reconstruction projects.

In January 2011, the U.S. government released its 5-year strategy for 

Haiti, titled the Post-Earthquake USG Haiti Strategy: Toward Renewal 

and Economic Opportunity. This strategy encourages reconstruction and 

long-term economic development in three regions of the country, known 

as “development corridors.” In addition to assisting with reconstruction in 

the Port-au-Prince corridor, which suffered the most damage from the 

earthquake, the strategy notes the U.S. government’s intent to provide 

assistance to the Cap-Haïtien region on Haiti’s northern coast and the StMarc region on Haiti’s western coast (see fig. 1).
 

Page 4 GAO-14-47T 

Figure 1: Development Corridors and Selected Sites Targeted by U.S. Post-Earthquake Assistance

On January 11, 2011, the U.S. government, the Haitian government, the 

Inter-American Development Bank (IDB), and a private South Korean 

garment manufacturer, Sae-A Trading Co. Ltd. (Sae-A), signed an 

agreement to support development of the CIP that included the following 

commitments.
 

Page 5 GAO-14-47T 

• The IDB committed to provide funding to the Haitian government to 

build the CIP and some associated facilities;

• the U.S. government committed to build a power plant, contribute to 

the building of a nearby port, and support the construction of 5,000 

nearby housing units; and 

• Sae-A committed to be the anchor tenant and hire 20,000 local 

employees at the CIP.

Progress is ongoing in building the CIP and filling it with tenants. Sae-A 

moved into the first CIP building in March 2012, and two other 

companies, a paint manufacturer and a textile manufacturer, have since 

moved into the CIP, together employing about 1,450 Haitian employees 

as of August 2013, according to State officials. According to State’s 

Senior Advisor for the CIP, these tenants project that they will create 

approximately 21,000 jobs by 2016. As of August 2013, according to 

State officials, the government of Haiti was progressing in talks with 

another four potential tenants.

USAID developed the New Settlements program to address the severe 

post-earthquake permanent housing shortage in Haiti and to support the 

Haitian government’s goal of moving economic growth from Port-auPrince to other areas, such as near the CIP. USAID’s goal was to 

construct up to 15,000 new houses in the three development corridors. 

USAID planned to provide funding for the preparation of all of the 

settlement sites,6 which would each comprise a certain number of plots 

on which USAID or a partner nongovernmental organization (NGO) would 

build houses. USAID was to build 4,000 of the 15,000 planned houses 

and NGOs and other donor partners were to build 11,000. USAID 

estimated that about 75,000 to 90,000 people would occupy the 

completed houses as beneficiaries.

 

6

Site preparation includes activities such as grading the land and providing proper 

drainage, access roads, pedestrian pathways, and infrastructure for delivery of utility 

services. 
 

Page 6 GAO-14-47T 

As of June 30, 2013, almost 3 years after passage of the 2010 

Supplemental Appropriations Act, USAID had obligated7 $336.0 million 

(52 percent) and disbursed $229.5 million (35 percent) of the $651 million 

it allocated for bilateral earthquake reconstruction activities in Haiti.8

Figure 2 shows the percentage of funding obligated and disbursed.

 

7

An obligation is a definite commitment that creates a legal liability of the U.S. government 

for the payment of goods and services ordered or received. See GAO, A Glossary of 

Terms Used in the Federal Budget Process, GAO-05-734SP (Washington, D.C.: Sept. 1,

2005). This report defines obligations as the total amount of orders placed, contracts 

awarded, services received, and similar transactions during a given period that will require 

payments during the same or future period. USAID labels these actions “subobligations.” 

In State’s reports to Congress on Haiti funding, for USAID-managed accounts, funds listed 

as “total obligations” or “obligated” refer to these subobligations. Nonetheless, consistent 

with 31 U.S.C. §1501, which defines when an agency can record an obligation, USAID 

generally treats as an obligation the bilateral agreements it makes with other countries to 

deliver assistance. USAID therefore considers all Haiti supplemental funding to have been 

obligated upon the signing of a bilateral agreement with the government of Haiti, within the 

period of availability for obligation defined in the appropriation.

8

According to USAID, supplemental funds provided for Haiti post-earthquake recovery 

were scheduled to be disbursed over the 5-year period that began with the January 3, 

2011, issuance of the Post-Earthquake USG Haiti Strategy. 

Most of USAID’s 2010 

Supplemental Funds 

Have Not Been 

Disbursed 
 

Page 7 GAO-14-47T 

Figure 2: USAID Supplemental Funding for Haiti Earthquake Reconstruction Obligated and Disbursed as of June 2013

Note: This report defines obligations as the total amount of orders placed, contracts awarded, 

services received, and similar transactions during a given period that will require payments during the 

same or future period. Nonetheless, consistent with 31 U.S.C. §1501, which defines when an agency 

can record an obligation, USAID generally treats as obligations the bilateral agreements it makes with 

other countries, such as Haiti, to deliver assistance. USAID therefore considers all Haiti supplemental 

funding to have been legally obligated upon signing the bilateral agreement with the government of 

Haiti, within the period of availability for obligation defined in the appropriation.

USAID = U.S. Agency for International Development

The amount of funds obligated and disbursed varies among six sectors of 

activities, as shown in table 2.
 

Page 8 GAO-14-47T 

Table 2: USAID Sector Activities and Amounts of Supplemental Funding Allocated, Obligated, and Disbursed as of June 30, 

2013

Dollars in millions

Sector of USAID Activity Allocated

Total 

obligations

Percentage 

obligated a Disbursements

Percentage 

disbursed

Shelter $83.1 b $49.2 59 $40.0 48

Energy 135.1 b 51.9 38 36.4 27

Ports and transportation 84.2 b 4.3 5 4.1 5 

Food security 82.5 59.6 72 26.0 32

Health and disabilities 99.4 38.4 39 18.3 18

Governance and rule of law 120.4 95.4 79 72.6 60

Operating and other expenses 46.2 c 37.2 81 32.2 70

Total $651.0 $336.0 d 52 $229.5 35 d

Source: GAO analysis of USAID data.

USAID = U.S. Agency for International Development

a

This report defines obligations as the total amount of orders placed, contracts awarded, services 

received, and similar transactions during a given period that will require payments during the same or 

future period. Nonetheless, consistent with 31 U.S.C. §1501, which defines when an agency can 

record an obligation, USAID generally treats as obligations the bilateral agreements it makes with 

other countries, such as Haiti, to deliver assistance.

b

Amounts of funding shown for the shelter, energy, and ports and transportation sectors include all 

fiscal year 2010 supplemental funding for those sectors. Funding for these sectors includes funding 

for the New Settlements Program, the CIP power plant, and a new northern port, which we discuss in 

this testimony.

c

Operating and other expenses apply to all sectors and are not a specific sector of USAID activity.

d

Because of rounding, the allocated and disbursed amounts shown do not sum to the totals.
 

Page 9 GAO-14-47T 

As of June 30, 2013, USAID had allocated $98.1 million to the CIP power 

plant project and had obligated 22 percent of these funds. Using this 

funding, USAID completed the first phase of the power plant with a 

designed capacity of 10 megawatts, 9 began to distribute some electricity 

outside the CIP, and procured a contractor to handle the operations and 

maintenance of the power plant for 3 years.10

USAID is planning to undertake other activities related to the power plant, 

including further expanding distribution of electricity to local communities 

over the next 2 years;

The power plant was 

commissioned in June 2012, 5 months later than initially planned but in 

time to provide power to the CIP as needed. The power plant project 

benefited from the mission having a Senior Energy Advisor on staff from 

April 2011 through February 2013, who used his background in electrical 

engineering to oversee and manage the project.

11

 

9

Although the initial power plant has a designed capacity of 10 megawatts, it currently 

produces 1.7 megawatts based on customers’ current electricity needs. Megawatt is the 

standard term of measurement for bulk electricity, such as the output of power plants. One 

megawatt equals 1 million watts, enough for 16,666 60-watt light bulbs.

building a solar energy farm with 2-megawatts 

capacity; and expanding the power plant’s capacity to at least 25 

megawatts, as needed.

10After 3 years, the Haitian government will take over plant operations.

11USAID has begun to connect some local customers to the CIP power plant. The first 

several residences were connected in October 2012, and 374 local customers had been 

connected as of May 2013.

USAID Completed 

Power Plant’s First 

Phase, but Port Is 

Delayed and Their 

Sustainability 

Depends on CIP’s 

Success 

USAID Completed First 

Phase of Power Plant in 

Time to Deliver Power to 

CIP 
 

Page 10 GAO-14-47T 

USAID has allocated $72.5 million to plan and contribute toward building 

a new port in northern Haiti; however, as of June 2013, the agency had 

obligated only $4.3 million (6 percent) because of planning delays. A lack 

of staff with technical expertise in port planning, construction, and 

oversight, such as a port engineer, at the USAID mission in Haiti 

contributed to these delays.12 According to a USAID planning document 

for the port sector, the agency planned to complete a feasibility study by 

March 2012, to initiate construction in spring 2013 through a private 

company that would supplement USAID’s funding contribution for port 

construction, and to complete construction in fall 2015.13

Port construction costs remain uncertain because the port site, design, 

and needed mitigation measures have not been determined. However, 

rough estimates in the February 2013 feasibility study project that the cost 

of port construction will range from $185 million to $257 million. Excluding 

However, the 

feasibility study was not completed until February 2013 because of 

unrealistic initial time frames; delays in awarding the contract for the 

study; and a statement of work for the feasibility study that did not require 

the contractor to include all information necessary to help select a port 

site. Lacking staff with port expertise, USAID consulted with officials from 

the U.S. Army Corps of Engineers (USACE), the U.S. Environmental 

Protection Agency, and the National Oceanic and Atmospheric 

Administration, who informed USAID officials that more studies should be 

undertaken to identify the additional economic, environmental, technical, 

and other information necessary to make a final site selection and design 

the port. According to USAID officials, USACE estimates that the 

necessary studies and design will take an additional 18 months to 2 

years. As a result of these planning delays, port construction will not 

begin until more than 2 years later than initially planned. USAID officials 

also initially estimated that port construction would take 2.5 years but 

have since learned that port construction may take up to 10 years, 

depending on the complexity of the port designed.

 

12According to USAID officials, USAID has not constructed a port anywhere in the world 

since the 1970s and does not have a port engineer or port project manager among its 

direct-hire staff. In January 2011 and May 2013, the mission in Haiti made unsuccessful 

attempts to fill a vacant port engineer position. 

13According to USAID documents, obtaining a private sector partner for the port will allow 

USAID to leverage funds and expertise from the private sector. A private company would 

contribute to port construction and then operate and retain revenues from the port for the 

term of a concession contract. 

Port Project Is Delayed, 

and Current Estimates for 

Construction Costs Are 

Higher Than Expected
 

Page 11 GAO-14-47T 

funding for feasibility studies, $68 million of USAID’s allocation to the port 

project remain for planning, design, and construction. USAID does not 

know what portion of this funding is needed for the additional planning 

and design; however, it is clear that the amount remaining will be a 

significantly smaller portion than USAID had initially planned to contribute 

to the port’s total construction cost, given the estimated funding gap of at 

least $117 million to $189 million.14 As a result, USAID officials recognize 

a risk that private companies interested in operating the port may not be 

willing to cover the remaining construction costs.15

Because of the complexity of port construction and the lack of port 

expertise at the USAID mission, we recommended that USAID fill the 

vacant port engineer position at its Haiti mission within time frames that 

will help avoid future project delays. In written comments on the report, 

USAID agreed with this recommendation, noting that it issued a 

solicitation for a ports advisor in May 2013. According to USAID officials, 

this solicitation did not result in any qualified applicants; thus, as of 

September 2013, the mission was in discussions with USACE about this 

agency providing a port advisor to fill the position.

Thus, the Haitian 

government may need to secure additional donor funding to build the 

port.

The sustainability of the CIP, port, and power plant are interdependent in 

several respects.

• The CIP depends on a functioning power plant and port access. 

Before the CIP, northern Haiti did not have the energy infrastructure 

or port capacity to support a completed industrial park. The existing 

ports in Haiti have high port costs and ports in the Dominican 

Republic are distant from the CIP, raising the cost of doing business 

at the CIP.

 

14USAID initially estimated that construction would cost $103 million, approximately $40 

million of which would be paid for by a private sector partner. 

15In addition, the Haitian government has considered charging $260 for each container 

coming into the northern port, which the port feasibility study concluded would make the 

project financially infeasible. 

Sustainability of CIP, 

Power Plant, and Port Are 

Interdependent and Rely 

on Haitian Government 

Capacity
 

Page 12 GAO-14-47T 

• The port and power plant depend on revenues from the CIP, so the 

viability of these projects will depend on the Haitian government 

finding additional tenants and maintaining the park.

• All three projects depend on Haitian government capacity to maintain 

and manage the CIP and power plant and oversee the private 

company that will operate the new port. USAID documents and 

external studies on these projects have cited concerns about the 

ability of the Haitian ministries to succeed in these areas because of 

limited staff and technical resources as well as the need for legal, 

regulatory, and management reforms.

USAID allocated $97.3 million to the New Settlements Program16

 

16On the basis of original estimates, USAID initially allocated approximately $59.0 million 

to the New Settlements program. USAID increased program funding to $97.3 million, or by 

about 65 percent, after receiving multiple bids from private sector contractors for site 

preparation and housing construction. USAID’s total allocations to the New Settlements 

program include $83.1 million from fiscal year 2010 supplemental funding and about $14 

million from other appropriations in fiscal years 2009, 2010, and 2012. 

and as 

of June 30, 2013, had obligated about $50.3 million (52 percent) of this 

amount. USAID underestimated the construction costs of its New 

Settlements program. These costs are comprised of two main categories: 

(1) cost of site preparation per plot and (2) cost of construction per house. 

In its 2010 planning documents, USAID originally estimated costs at 

$1,800 per plot and $8,000 per house. However, as of April 2012, when 

USAID had awarded contracts for construction at its first two 

settlements—Caracol-EKAM and DLA 1.5—the total cost for a plot and 

house had increased by 151 percent, to $24,625. These cost increases 

USAID’s New 

Settlements Program

Has Been More Costly 

and Slower Than 

Expected, and 

Sustainability 

Challenges Remain

USAID’s Cost Estimates 

Increased Sharply and 

Program Funding Has 

Significantly Increased
 

Page 13 GAO-14-47T 

stemmed primarily from the inaccuracy of USAID’s original estimates, 

which were based in part on costs reported by the World Bank and an 

NGO that was building houses in northern Haiti. As a result, according to 

USAID officials, the original estimates did not adequately consider the 

stringent international building codes and disaster resistance standards 

planned for New Settlement houses and did not take into account the 

extent or complexity of service infrastructure USAID intended to provide. 

Furthermore, USAID officials noted that the demand for and cost of 

construction materials had increased.

After USAID awarded these initial contracts, construction costs increased 

further as a result of Haitian government requests for design changes. 

The requested changes included an increase in the size of housing units, 

from about 275 square feet to about 450 square feet, and the inclusion of 

flush toilets rather than the traditional dry toilet system.17 The Haitian 

government’s design changes increased the total cost for a plot and a 

house by an additional 34 percent, to $33,007. Therefore, as of April 

2013, average costs based on awarded contracts at the first two sites to 

undergo construction had increased by 433 percent per plot and by 193 

percent per house.18

 

17In addition to causing cost escalation, the use of flush toilets has led to potential public 

health concerns. Only one permanent wastewater treatment plant capable of processing 

sewage from septic tanks exists in Haiti, near Port-au-Prince. Another temporary 

treatment facility has been built at the CIP, with plans to replace it with a permanent 

facility. The number of settlement sites that will be served by these two facilities is unclear. 

In addition, one senior USAID official stated that failure to regularly empty septic tanks

would cause a potential public health risk. 

Figure 3 compares the original estimates, initial 

contract costs, and revised contract costs.

18We performed this analysis in April 2013 for our June 2013 report. In August 2013, 

USAID signed a contract for site preparation at three additional sites that reflects a perplot cost for site preparation of $17,068, significantly higher than the weighted average of 

the per-plot costs at the first two sites. 
 

Page 14 GAO-14-47T 

Figure 3: USAID Cost Estimates for Preparation of One Plot and Construction of 

One House in Haiti, as of April 2013

Note: Cost estimates depicted are the weighted average costs of site preparation and house 

construction as of April 2013 for two active settlement sites designated by USAID as Caracol-EKAM 

and DLA 1.5. The costs are different at the two sites and may vary at future sites.

USAID = U.S. Agency for International Development

As of August 2013, USAID had reduced the number of houses it expects 

to complete, and therefore the number of beneficiaries, by more than 80 

percent. Of the 15,000 houses that it originally planned, USAID expects 

that only 2,649 will be completed across eight settlement sites. USAID 

plans to fund the construction of 906 of these houses and expects NGOs 

and other partner donors to fund the construction of the remaining 1,743. 

USAID also reduced the total number of projected beneficiaries, from an 

original estimated range of 75,000 to 90,000 to its current estimated 

USAID Reduced Projected 

Numbers of Houses and 

Beneficiaries
 

Page 15 GAO-14-47T 

range of approximately 13,200 to 15,900.19 Approximately 74 percent of 

these houses are to be built in the Cap-Haïtien corridor, with the 

remainder in the Port-au-Prince and St-Marc corridors (see table 3).20

Table 3: Numbers of Houses to Be Funded by USAID and Partner Donors, as of 

August 2013

According to USAID officials, the first 26 families moved in to DLA 1.5 at 

the end of September 2013, with more families planned to occupy houses 

at DLA 1.5 and Caracol-EKAM in October 2013. 

Development corridor

USAID 

houses

Partner 

donor houses

Corridor 

totals 

Cap-Haïtien 750 1,217 1,967

St-Marc 156 148 304

Port-au-Prince 0 378 378

USAID and partner donor totals 906 1,743 2,649

Source: GAO analysis of USAID data.

USAID = U.S. Agency for International Development

The U.S. government’s January 2011 strategy projected that all USAID 

permanent housing construction and site preparation under the New 

Settlements program would be completed by July 2012, but completion of 

some sites will likely occur more than 2 years later than planned.21

• Land titling issues. According to USAID officials, USAID spent 

substantial time trying to secure clear title to private and governmentowned land. In the end, USAID was able to acquire only one site from 

private owners because of difficulties in confirming legitimate 

The 

following factors have mainly accounted for these delays.

 

19The numbers of settlement sites, houses, and beneficiaries that USAID currently 

projects may differ from the final numbers achieved, given that USAID has not obtained 

firm commitments from partner donors for all sites where the agency expects donors to 

fund housing construction.

20USAID had initially planned for 67 percent of the houses to be built in the Port-au-Prince 

and St-Marc corridors and 33 percent to be built in the Cap-Haitien corridor. 

21According to USAID officials, the agency projects that the first two sites will be 

completed in fall 2013 and that site preparation of three more sites will be completed in 

March 2014. The officials said that the USAID has no estimated completion dates for the 

remaining sites for which there are not yet partners or procurement has not begun.

Land Title Issues and 

Reduced Partner Donor 

Participation Have 

Delayed New Settlements 

Program
 

Page 16 GAO-14-47T 

ownership. In addition, USAID found that secure land title for some 

government-owned sites could not be confirmed because of unclear 

or disputed ownership, which further reduced the number of site 

options and delayed site selection.

• Difficulties partnering with NGOs and other donors.22 Plans for 

USAID’s New Settlements program relied heavily on partners, which 

led to delays in the program when these partnerships encountered 

difficulties. For example, in January 2011, the American Red Cross 

(Red Cross) announced that it would partner with USAID to build 

homes on at least two sites; however, USAID did not sign an 

agreement with the Red Cross until August 2013 and the agreement 

was for just one site. According to USAID officials, that partnership did 

not develop as planned because of the delays in securing land title 

and because of turnover in Red Cross leadership that resulted in 

shifting approaches to housing in Haiti.

The sustainability of the new housing settlements will depend on factors 

such as available economic opportunities and support for community 

development. USAID is attempting to ensure the sustainability of new 

settlements by locating them in areas with employment, health care, 

education, and transportation. If those efforts do not provide adequate 

economic opportunities, beneficiaries may not be able to afford the fees 

and services connected with their new homes or may have to relocate 

altogether. The sustainability of the settlements will also depend on their 

ongoing support, maintenance, and management by local governments 

and community members. Specifically, beneficiaries will face site-specific 

issues such as affordability and community cohesion.

• Affordability. The Haitian government has determined that 

beneficiaries must make monthly payments of 1500 Haitian gourdes 

for 5 years before receiving title to a house.23

 

22Examples of partner donors that are not NGOs include the Qatar Haiti Fund; the InterAmerican Development Bank; and the Fund for Economic and Social Support, a Haitian 

government entity.

These monthly fees will 

go toward the maintenance of housing, public spaces, and septic 

tanks; management costs incurred by the Haitian government; and 

23As of September 2013, the monthly fee of 1500 Haitian gourdes was equivalent to 

approximately $35.

New Housing Settlements 

Face Sustainability 

Challenges
 

Page 17 GAO-14-47T 

incidental expenses. Beneficiaries will also face charges for utilities 

and services, such as electricity and water. 

• Community cohesion: The New Settlements program currently 

plans to create eight new “communities,” each consisting of 148 to 

1,283 households, with beneficiaries from various locations in Haiti 

and with varied income levels. USAID officials acknowledged that 

discord may arise among the beneficiaries or between the settlements 

and surrounding communities.

To mitigate these concerns, USAID has put community development 

programs in place at two sites and plans to fund or pursue NGO 

partnerships to support such programs at the remaining sites. For 

Caracol-EKAM, USAID obligated about $4.8 million to develop and 

manage the beneficiary selection process, establish a provisional 

community management committee,24

 

24Community management committees are self-governing bodies made up of selected 

beneficiaries to promote social cohesion, serve as decision-making entities, and act as the 

residents’ representatives with government counterparts. The provisional committee for 

Caracol-EKAM was formed from an initial pool of beneficiaries, but a permanent 

committee will be formed once all beneficiary households have moved in. Members will be 

trained to engage with local and national authorities to help ensure that community 

services such as grounds keeping, infrastructure maintenance, and solid waste collection 

are undertaken. 

and create other mechanisms to 

support community development. In addition, in August 2013, USAID 

signed a $1.5 million agreement with another implementing partner to 

provide support for the phased occupation of Caracol-EKAM and 

management of the settlement, among other activities designed to help 

ensure its sustainability. For community development activities at DLA 

1.5, USAID has entered into a partnership with an NGO that is providing 

such support through its own funding. USAID has allocated an additional 

$3.3 million to support community development efforts, including 

beneficiary selection and site management and operations, at the eight 

new settlement sites. In addition, USAID plans for partner organizations 

to contribute to these activities at some of the settlement sites. For 

example, the memorandum of understanding between USAID and partner 

donors building houses on three sites notes that partner donor funds are

to be provided for community development activities at those settlements; 

however, that memorandum does not fully secure such a financial 

commitment. In addition, it is unclear whether such partnerships will be 

available to support all of the remaining settlements. USAID officials have 
 

Page 18 GAO-14-47T 

stated that it is crucial that these support mechanisms are in place to 

ensure a smooth transition when beneficiaries move in and to set the tone 

for interaction among beneficiaries.

In our June report, we recommended that the USAID Administrator direct 

the mission in Haiti to ensure that each new settlement has community 

support mechanisms in place prior to beneficiary occupation, including by 

making funds available as necessary to help ensure this support. USAID 

agreed with this recommendation and noted that the mission is prepared 

to provide additional resources if they are needed to finance community 

development activities. USAID also elaborated on the ongoing and 

planned activities to facilitate community development and sustainability 

at the first two settlement sites. We acknowledge USAID’s efforts to 

provide community development support at these two sites and support 

the agency’s intentions to implement our recommendation at future 

settlement sites.

Chairman Royce, Ranking Member Engel, and Members of the 

Committee, this concludes my prepared statement. I would be pleased to 

respond to any questions you may have at this time.
 

Page 19 GAO-14-47T 

If you or your staff have any questions about this statement, please 

contact me at 202-512-3149 or gootnickd@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this statement. GAO staff who made key contributions 

to this testimony include Leslie Holen (Assistant Director), Lynn Cothern, 

and Heather Latta. Michael Armes, Ashley Alley, Etana Finkler, Justin 

Fisher, Courtney LaFountain, Mary Moutsos, and Brian Tremblay 

provided technical assistance.

Contacts and Staff 

Acknowledgments 

(320995)
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