CATIC poser in P’ment prompts news of Govt.’s Hilton Colombo takeover

Thursday, 10 March 2011 00:55 -     - {{hitsCtrl.values.hits}}

Economic Development Minister Basil Rajapaksa yesterday told Parliament that ownership of Hilton Colombo has been acquired by the Government.

He made this disclosure in justifying the Government’s recent deal with China National Aero Technology Import and Export Corporation (CATIC).

This followed UNP MP Harsha De Silva raising issues about the Government selling Galle Face land to CATIC to build a five star hotel.

Minister Rajapaksa made the impromptu disclosure that Hilton was taken over after saying the UNP regime mismanaged the Hilton project.

The move was following its non compliance with the agreement with the Government as well as follow up to several litigations the Hotel faced several years ago.

Some viewed the statement as "political" as there is much damage control pending.

On Monday Daily FT exclusively reported that Hilton Colombo’s owning company Hotel Developers Plc (HDL) defaulting debt (to Government) had topped the Rs. 11 billion mark, with calls being made to investigate and take action against the serious loss of capital and profitability along with concerns over good corporate governance.

The Treasury owns a 64% stake in the now technically bankrupt HDL, whilst the Japanese Government holds a 28% stake along with 8% by the general public.