Cargo Boat blames BOI for delay; abandons Rs. 2b Baybrooke commercial complex

Tuesday, 15 November 2016 00:17 -     - {{hitsCtrl.values.hits}}

A delay by the Board of Investment in approvals has forced Cargo Boat Development Company Plc to abandon its proposed commercial complex at Braybrooke Street, Colombo 2.

The company recently said that it has not invested funds in the proposed project by Renuka Land Ltd. at Colombo 2 and has withdrawn from the planned investment “due to the prolonged time taken by the BOI to extend the project implementation period stipulated in the Principal Agreement dated 19 November 2014.”

As the exemptions granted under the Inland Revenue Act No. 10 of 2006 in the Principal Agreement expires on 31 March 2018, prior to the expected completion date of the project, Renuka Land Ltd. had sought approval from the BOI to extend the project implementation to 30 June 2019. 

“However, the extended time taken by the BOI to finalise the extension hindered the progress and affected the feasibility of the project,” said Cargo Board, adding that it decided to withdraw from the investment.

This disclosure comes after the Colombo Stock Exchange (CSE) had inquired about the progress as well as the non-disclosure by the company with regard to the proposed new project. 

In its filing, the company said that for the same reason Renuka Hotels and Cargo Boat Development had not entered into a joint venture. 

“The project was only at a conceptual stage and since no investment was made, the Board of Cargo Boat Development Company decided there were no details to disclose relating to the project in the annual reports of FY2015 and 2016,” the filing to the CSE said.

As per the November 2014 announcement, Renuka Land, which is a joint venture between Renuka Hotels and Cargo Boat Development, had initiated a project to construct a modern rentable Class A office building in Colombo 2.

It was to be located on company-owned land at 29 Braybrooke Street, with an investment of Rs. 2 billion.

The release also said construction of the building, which was scheduled to commence in December 2014, would culminate in April 2017.

The proposed property was to consist of an area of 204,343 square feet of which 108,138 square feet was slated to be available on rent. It was to comprise a ground floor, basement and 13 levels of which five were to be allocated for parking with 160 parking bays and eight levels of modern rentable office space. 

Cargo Boat Development currently owns and manages 75,000 square feet of office space in Janadhipathi Mawatha Colombo 1 and Renuka Hotels owns and manages Renuka Hotel and Renuka City Hotel.