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Rapid urbanization, lack of adequate affordable housing and lack of a pro-active approach to development has contributed to the proliferation of slums in most cities in the world. Colombo being the commercial capital of Sri Lanka has the highest demand for land and housing. The Sustainable Township Programme (STP) was introduced to address the housing issue of the urban poor with use of voluntary relocation and resettlement into compact townships. The STP identified six compact townships within Colombo. The Slum Relocation project was implemented as the first phase of Sahaspura Compact Township under this programme. The objectives of this project were to resettle slum dwellers occupying several slum gardens in Colombo in condominiums and utilize the liberated land for urban redevelopment. Initially 651 families were relocated to Sahaspura, and 161 families refused to be relocated. It was reported that subsequent to resettlement, about 100 150 families sold their houses in the project and created an asset base to purchase a house in the suburbs or they sold their houses in the project and returned to their original settlements. This made it impossible for liberated land to be utilized for any purpose of commercial importance and hence, the entire development objective of the resettlement project was not achieved. The main objective of the research was to identify the factors leading to the rejection of the slum relocation project by the target group and to draw conclusions about what needs to be improved for them to be able to improve their lives through resettlement and thereby also benefit from the development causing their resettlement. The specific research objectives were to examine the factors that attract and keep slum dwellers in their original settlements, examine how the planning and implementation of the project was carried out and to identify perceived changes living in a high rise would bring about in the lives of the target group. The research was conducted as an exploratory descriptive type of research and resettlement project was treated as a holistic case study. A target group survey, focus group discussions and interview techniques were used in the research. The research findings indicated that the livelihood assets of the target group had a strong relationship with the decisions they made. The most influential factors that made a section of the target group refuse to be resettled and another section to sell off their housing units and move out were the perceived and experienced effects of the ability to obtain basic services, tenure, social disarticulation in every aspect, loss of income opportunities and dissatisfaction with compensation. The study also revealed that there are certain aspects of a project implementation that need to be changed in order for the target population to be more receptive to such projects. Therefore, it could be concluded that slum relocation project failed to achieve its objectives largely because the resettlement process did not addresses the disarticulation of community and other socio economic aspects. Making sure that there is no social disarticulation and incorporation of livelihood restoration activities will ensure the success in the implementation of development induced slum relocation projects. A participatory approach throughout the process will reflect the aspiration of the target group and make the project and compensation more acceptable to the target group. A conducive legal environment is of utmost importance for successful implementation of slum relocation projects to protect the rights of the target group while achieving the development objectives of the country.
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