The main component of the IHDP is the construction of 5653 new houses to replace the temporary thatched huts and completion of 2232 partly completed houses distributed among 87 welfare camps in four divisions of Puttalam district over a period of four years. Further it is intended to finance the construction of 560 new houses for non-IDPs. Work had commenced on 4762 IDP houses. These included 4460 new houses to replace the earlier temporary thatched huts and upgrading of 302 partly built houses.

The Puttalam Housing Project includes provision of basic infrastructure projects for safe drinking water supply and internal road development in order to up grade them into sustainable habitat. Allocation for Water Supply Component: 9.93 M US$. Under Water Supply component, it has been clustered in to 12 Water Supply Projects covering all the IDP camps in 4 Divisions in Puttalam district. Communities would be responsible for operations and maintenance of stand alone schemes. The National Water Supply and Drainage board (NWSDB) is responsible for doing Investigation, Designing, Preparation of Bidding Documents and Consultation with the construction supervision.3 WSS have been awarded and construction is in progress. Another 5 projects are ready to award. Balance 4 projects are under design stage.

Environmental protection & improvement and benefits to people's welfare form key operational priorities in Infrastructure & Housing Development Project (IHDP) in Puttalam. The World Bank environmental safeguard policies are based on approach to environmental sustainability. World Bank Environmental safeguard policies are used to identify, avoid, and mitigate the potential negative environmental impacts, which are generated due to development activities such as housing, water supply and development of internal roads. And the PMU working towards common environmental issues (Ex: solid waste management) in IDP camps at Puttalam and Kalpitiya areas.

An information dissemination campaign would explain the PHP, the beneficiary selection process, the cash grants, disbursement procedures, the legal rights o f IDPs, on-going programs for non-IDPs and issues pertaining to water conservation. This is intended to ensure transparency, accountability and reduce non IDP resentment at the transfer of resources to IDPs.

The PHP is expected to have a positive social impact through the provision of housing, water, sanitation and environment improvement for IDPs who have made Puttalam their permanent residence of choice. Improved living conditions would permit IDPs to enhance their socioeconomic status and integrate in Puttalam. This would strengthen social capital as communities plan and undertake construction.