Big investors settling in tourism

Wednesday, 11 May 2011 00:05 -     - {{hitsCtrl.values.hits}}

By Cheranka Mendis

Sri Lanka has received huge investments in the tourism front, amounting to a stupendous US$ 784.75 million as at 30 April this year.

Data released by the Ministry of Economic Development yesterday showed that the authority has received 99 hotel projects within the first four months of the year for consideration, out of which 12 projects have been given the go ahead sign while four have been rejected.

The current hotel projects in the pipeline should add 5,938 rooms to the industry infrastructure and if given approval soon, are ready to start construction this year, said Deputy Minister of Economic Development Lakshman Yapa Abeywardhana.

The industry has been warning investors and the media that to reach the anticipated 2.5 million tourists by 2016, as enunciated by President Rajapaksa, local room capacity must be increased to 45,000 from the present 15,000.

Arrival performance in the first quarter of this year saw the industry setting new records with more than 250,000 arrivals, the first-ever for the country.  Already flying high, Abeywardhana claimed that if the country could achieve an average monthly growth of 26%, it would have to open its arms and welcome more than 800,000 tourists.

From the 99 project applications that came in, inspections have been carried out on 78 projects and 12 have been granted approval.

Four have been rejected so far. The four rejected projects come to a total value of US$ 113.31 million.

Among the approved projects, there will be a hotel ‘Chaaya Beru’ in Beruwala with 201 rooms by John Keells, a boutique hotel, ‘Rising’ in Colombo 3 by Rising Sun Properties with 19 rooms, hotel ‘Ananthaya’ in Chilaw with 74 rooms by Laugfs Holdings, a boutique hotel in Meepe with five rooms by Asian Management Services, two guest houses (one in Batticaloa with 30 rooms by Prince Gohagoda and another in Kalkudah with 10 rooms by D.H. Wijewardena Associates), an eco hotel in Kandy with 18 rooms by Hotels & Lodges (Pvt) Ltd., ‘Yala Properties Beach’ in Yala with 98 rooms by Jetwing Hotels, an apartment hotel in Colombo 3 with 45 rooms by Merchant Investments Ltd., a hotel in Bolgoda with 50 rooms by Lokuge Ltd., a 60 room hotel in Hikkaduwa by L.H. Piyasena Co. and another at Habarana with 15 rooms by Sounter Paradise (Pvt) Ltd.

As such the Western Province will have 33 hotel projects, Southern Province 23, Northern Province four and Eastern Province 22. “The Central Province will have six projects, Uva Province two, North Central Province one and North Western Province eight,” Abeywardhana said.

Sri Lanka, which has been a hot favourite among international hospitality tycoons, has attracted investments worth of US$ 558 million as well so far.

Leading the list is the much-anticipated Hong Kong-based Shangri-La with an investment of US$ 390 million, two Indian companies with investments of US$ 20 and 25 million, two other Hong Kong companies with US$ 50 million and USD 35 million, two Thai groups with investments of US$ 20 and 10 million, a Maldivian company with US$ 5 million and a Singaporean company with US$ 3 million.

According to the Minster, it is expected that work on the internationally-invested hotels will be completed within three years.

He also asserted that Cabinet approval for selling land for Rs. 20 million per acre had been revised and could now be given legally on the Government assessed value prices, if the company willing to invest was a local and internationally recognised one.

“This rule however does not apply to Kuchchaveli, but is valid in every other part of Sri Lanka. We have received approval from Cabinet to follow this as most investors have expressed concern over high property prices in the country,” Abeywardhana said. “This would also ensure that more investment can come in and accelerate the process further.”

Speaking of the large hotel projects (projects that are valued at more than US$ 20 million) that have been recorded by the end of the month includes three hotel projects in Gampaha for investments of US$ 50 million, US$ 40 million and US$ 25 million, four projects in Colombo with investments of US$ 40 million, US$ 35.5 million, US$ 33.75 million and US$ 26.8 million, one in Badulla valued at US$ 25 million and another at Ratmalana for US$ 20 million. Most of the projects are on hold awaiting the IEE and EIA reports from investors.