Deal for $ 250 m FDI project to be signed by end January

Wednesday, 8 January 2020 00:15 - - {{hitsCtrl.values.hits}}

Land valued at Rs. 7.8 b, Rs. 5.9 b to be paid before signing agreement
Contractor must start project before end April
Govt. reiterates no sale of land, project to be completed in six years

By Nuwan Senarathna

The Government yesterday said plans were proceeding swiftly on the $ 250 million mixed development project, which is the first Foreign Direct Investment (FDI) project for the new administration, with the

State Minister Lakshman Yapa Abeywardena

agreement likely to be signed on 31 January.

Speaking to media at the Media Ministry, State Minister of Communication Technology Lakshman Yapa Abeywardena said the plot of land for the project was valuated at about Rs 7.8 billion, and Rs. 1.85 billion has already been paid to the Government by the investor.

This was the new Government’s first FDI, which was approved under the previous administration in 2018. The investment will be made on a State-owned plot of land located near the Beira Lake at Baladaksha Mawatha in Colombo, by Perennial Real Estate Holdings. Under the initial Cabinet paper that was passed in 2018 by the Yahapalanaya Government, a payment of $ 10 million had to be completed before signing the agreement.

“The agreement will be signed once the investor makes the balance payment of Rs. 5.9 billion. They have agreed to make the payment by 31 January. The process will be transparent, and there will be no hidden agendas,” Abeywardena said.

The project consists of the construction of a 30-storey commercial tower with 700 new apartments. In addition, it will also have facilities for retail and food outlets. The initial proposal was to set up a 200-room hotel, 150 residencies, and a shopping complex, with a project implementation period of four years.

However, the proposal was revised on 16 January 2018 to have apartments, commercial retail space, and a mall, with project implementation extended to 6 years.

Abeywardena said the investor would have to start construction by end April, once the agreement is signed. He also insisted that the land will not be sold by the Government, which will instead sign the customary 99-year lease agreement with the investor, he added.

“We will not sell public properties to foreign investors. Our Government will protect public properties while attracting new foreign investments. This project alone will create multiple direct and indirect job opportunities,” he added.

Abeywardena noted the investment would create a Rs. 450,000 monthly payment structure until the end of the lease agreement in 99 years.

The Janatha Vimukthi Peramuna (JVP) earlier accused the Government of attempting to sell the land to the Singaporean investor, while questioning why the Government did not call for fresh tenders, rather than follow the proposal finalised by the United National Party (UNP) Government.