Committee to investigate irregularities in Grand Hyatt Project

• Delay in project has led to construction costs going from Rs. 30 b to Rs. 60 b
• PM informs Cabinet old contracts were terminated without justification after Govt. change in 2015, leading to massive losses
• Alleges mismanagement by project implementation company Sino Lanka under previous administration led to situation

 By Chandani Kirinde 

 The Cabinet of Ministers on Monday gave approval to appoint a committee to investigate the irregularities in the Grand Hyatt Project, the delay which has doubled the project cost from Rs. 30 billion to Rs. 60 billion.

Prime Minister Mahinda Rajapaksa, in his capacity as the Minister of Finance informed the Cabinet the Committee will inquire into whether the Government has incurred a financial loss due to the delay in the project.

Prime Minister Rajapaksa informed the Cabinet that the Grand Hyatt Hotel Project is implemented by Sino Lanka Ltd., a subsidiary of the Sri Lanka Insurance Corporation, Employees’ Provident Fund (EPF) and Litro Gas Lanka Ltd., and that it was initially scheduled to open in the first quarter of 2016 after the completion of construction.

However, most of the agreements signed by the Government in office prior to 2015 were unjustifiably terminated by the new Board of Directors of Sino Lanka following the 2015 Presidential.

They had subsequently entered into agreements with new contractors for the completion of the project, which brought about legal action from companies that were initially contracted. Sino Lanka was asked to pay an estimated sum of Rs. 1.8 billion as compensation.

The current cost of the project, which was originally planned to be completed at an estimated cost of Rs. 30 billion, is re-estimated to be around Rs. 60 billion.

The Prime Minister informed the Cabinet that the situation has arisen due to the irregularities committed by the previous management of Sino Lanka, and that it is important to appoint a committee to probe this.