On paper, this brand new, model community sounds too good to be true. A year after Hurricane Mitch wiped out their neighborhoods, citizens from the city of Choluteca, the local government and foreign aid groups built a huge replacement community with thousands of cinder block houses, schools and parks on a neat grid a few miles from their old homes.

But on closer inspection, the model is missing a few pieces, including electricity, water, bathrooms and a sewage system. It is also missing people; many would-be residents continue to stay with friends and family in Choluteca and do not want to move here until basic services are installed.

"We have nothing but the roof over our head, nothing but this house," said Santos Eucebia Carbajal, 45, who lives in a new 10-by-13-foot cinder block shell with her father and four children. The family lost two houses, two acres of land and dozens of cows and chickens in late October 1998 when a hurricane-swollen river swept away their neighborhood. They are now forced to go to the bathroom outside and get their water from a community faucet.

From one perspective, this replacement town is an unqualified triumph. Despite the economic and physical catastrophe from Mitch--which killed more than 5,000 people in Honduras alone and caused about $5 billion in damage--it took just 13 months for this impoverished community to marshal the resources and manpower to raise a new town.

But Limon de la Cerca also illustrates many of the problems that Honduras and other countries are facing more than a year after Hurricane Mitch, which experts say was the worst natural disaster to hit Central America in 200 years. The hurricane, one of the most powerful ever recorded in the Atlantic, killed more than 9,000 people in Honduras, Nicaragua, El Salvador and Guatemala; destroyed roads and bridges and thousands of homes; wiped out coffee, sugar cane and banana plantations that employed tens of thousands of people; and set back development in the war-wracked region by several decades. (The region suffered another huge disaster in Venezuela on Dec. 15-16 when raging river torrents killed between 5,000 and 30,000 people and left 140,000 homeless in that South American country.)

In Limon de la Cerca and elsewhere in Honduras, heavy rains this fall stymied infrastructure projects. Aid workers, who rushed to build houses, now say they hope to add basic services within months.

Reconstruction has been plagued by a lack of coordination among aid groups and disputes between organizations that want to give aid with no strings attached and others that contend people should work in exchange for what they are given.

International donors, concerned about the country's reputation for corruption, have insisted on cumbersome accounting and public bidding procedures, and they want time-consuming public hearings and oversight to encourage greater democratization and decentralization. This has all slowed the delivery of foreign funding and the pace of rebuilding.

Still, hundreds of millions of dollars in aid have been given, but because of the magnitude of the calamity, tens of thousands of people continue to live without the most basic services. Temporary shelters are crammed with homeless people. Unemployment and crime are skyrocketing, and the national economy remains crippled.

To make matters worse, this year's rainy season was particularly destructive--killing at least 40 people, wiping out 23,000 acres of crops and destroying 27 bridges, including eight repaired from Mitch--even though the amount of rain was not particularly heavy. Officials said that the country's landscape was so changed by Mitch--which cut new paths for rivers, wiped out forests and deposited tons of sediment and materials in new places--that vast regions of Honduras are now more vulnerable to even moderate amounts of rain.

This year's heavy losses prompted some to question whether the central thrust of reconstruction efforts here--the so-called transformation of Honduras--is in fact proceeding. The idea is to use the estimated $3 billion hurricane reconstruction effort to implement structural and systemic reforms--greater democracy, decentralization, poverty reduction--that will make Honduras less vulnerable to future natural disasters.

"The deaths and losses caused by tropical storms and continuous rainfall in the first days of October of this year reinforce the belief that Central American governments and donors show no clear signs of being willing to attack the root causes of existing vulnerabilities," said a recent report by the development group Oxfam America.

In many ways, Limon de la Cerca is typical of reconstruction projects underway across Honduras, and like the nationwide rebuilding efforts, people disagree about whether the town represents a success or a failure.

"When I was driving into it, I said, 'This is not too attractive,' " said U.S. Ambassador Frank Almaguer. "But they will have streets and water and sewage and electricity and schools, and sports are being planned, and even though it's inadequate by our standards, it's far better than what they had before Mitch."

When international aid workers walk through town, however, they see something else. With no bathrooms, many residents relieve themselves in public areas, and during the rainy season, children played in mud piles that were indistinguishable from raw sewage. The houses are one-room shells on postage stamp-size lots. The community is five miles outside the city, and there are few job opportunities for adults, few social programs or other activities for children. There is no telephone service or police department.

"True, they may be living in the best house they've ever had, but we've got 5,000 to 6,000 people living in the desert without latrines, potable water and electricity," said Francois Audet, the local head of CECI, a Canadian development group that is coordinating projects by about two dozen foreign organizations.

Limon de la Cerca is really part of Choluteca, a city with 120,000 residents in the Pacific coastal plain of Honduras, about 55 miles south of Tegucigalpa. The city, the oldest and largest in southern Honduras, was founded by the Spanish in 1535 and sits on the banks of the Choluteca River. The region is a trading and agricultural center, particularly for the country's shrimp, cattle, melon and sugar cane industries.

When Hurricane Mitch struck, dumping as much as six feet of rain on the mountainous interior in a few days, it transformed meandering streams into raging torrents, many of which poured into the Choluteca River. According to satellite photos and town residents, the river rose about 30 feet and swelled to 20 times its width.

About 3,000 houses were destroyed--almost 20 percent of Choluteca--102 people were killed, and 67 are still missing and presumed dead. In some places, more than 10 feet of top soil was washed away, ruining swaths of farmland that now are dust bowls of silt and stone.

Today, Limon de la Cerca has about 5,000 residents living in 1,100 houses, said Choluteca Mayor Juan Benito Guevara. Another 1,200 homes are nearly completed, he said. When the construction is finished in about two years, the town will have 4,500 houses with as many as 20,000 residents, 10 schools, seven churches, a clinic and playing fields and parks.

The houses are heavily subsidized. Residents can buy one outright for about $110, or they can get a 10-year loan with monthly payments of $2.50. Per capita income in Honduras is about $16.50 a week, but officials said the local unemployment rate is about 40 percent.

Even with the unfinished work, the community represents a significant achievement. There have been no epidemics, no starvation, no economic collapse, no civil unrest. For the first time, local residents are deeply involved in community planning and decision-making. Town officials have access to a new U.S.-donated computerized satellite system that reads the river level and warns when it will flood.

"We want to help make a better life for ourselves," said Pedro Aronne, who is president of one of the eight neighborhoods that make up Limon de la Cerca. "Eight months ago there were flies all over and people were sick with diarrhea, but we have advanced so rapidly. Looking back, I didn't think we could have done all this."

But for others, the progress is too slow, the planning and coordination too haphazard, the human suffering too widespread. The community has the potential to become an isolated pocket of poverty, too far from jobs and shopping. Public transportation is poor. Most schools and public parks are still on the drawing board. Residents have no land for livestock and farming. There are no trees.

"Some people are really happy here because this is the first time they've had a house," said Wilfredo Alvarez, 40, who lives in a neighborhood called New Jerusalem. "But others had a big house and cars, and they lost everything. It's very difficult for them to live in this kind of a community."

CAPTION: Santos Eucebia Carbajal, her father and three children stand outside their new house. The family must go to the bathroom outside and get water from a community faucet.

CAPTION: Choluteca Mayor Juan Benito Guevara walks through the city's cemetery, only about 20 percent of which has been reclaimed since massive flooding caused by Mitch. Some people have excavated their family plots.