Strategic development project in Fort receives Govt. approval

By Ashwin Hemmathagama

Our Lobby Correspondent

An order enabling a project to construct, build and operate a mixed utility complex including a luxury hotel at Colombo Fort, identified as a strategic development project received the Parliament approval last evening. According to Gazette Extraordinary No. 1782/82, the project will be conducted by Welcome Hotels Lanka Ltd., enjoying a 10-year tax holiday and subjected to special rates thereafter.

Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr. Sarath Amunugama justifying the special consideration offered to large scale investments in Sri Lanka, identified them as “strategic development project that don’t come under the purview of the BOI but bring in much wanted foreign currency to Sri Lanka.” Drawing parallels between Sri Lanka and China, Amunugama noted the importance of mega investments that have helped China to reach its current position.

“The United States is the single largest investor in China. Vietnam is another example. The new finance minister Chidambaram introduced a series of proposals and enacted new laws enabling India to gear attracting more foreign investment. We also need to change things in a manner that will attract the much wanted investment in certain identified areas,” he stated.  He went on to say that the exploration of oil and gas in the Mannar basin, Shangri-la in Hambantota and Colombo, the Lanka Steel Corporation, the Southern Container Terminal under the Colombo Port Expansion Plan, the coal based power station in Sampoor, and the mixed utility complex are key investments that fall under this category. The mixed utility complex is a venture between ITC, India and the Sheraton. The total investment will be US$ 140 million out of which US$ 73 million will be invested upfront. “With the mixed utility complex, Sri Lanka will further secure its position as the best tourist destination in the world. The world’s leading travel and tourism publications have regularly identified Sri Lanka as a magnificent destination, which is value for money. But we will need 50,000 rooms by 2016.

“Many of our competitors have problems. Egypt has political issues and tourism is declining, Maldives, Thailand, Bali, are also among the destinations with reducing tourist arrivals. The highest ever figure of tourist arrivals was 350,000, reported in 1983 but we recently reported one million,” said Amunugama. In response, Opposition lawmaker Ravi Karunanayake said: “There is no involvement of the Sheraton but it has an involvement with the Gamini Gunarathne Company. How can they come up with a five star hotel and complex with such a low investment? Are they putting up a ‘bath kade’? Please do not tamper with the actual truth. Yes, we appreciate you eliminating terrorism but please don’t play around with the national economy.”

UNP MP Dr. Harsha de Silva made an interesting comparison likening Sheraton and Welcome Hotels respectively to Mercedes and Tata and noted Sheraton is coming but only Welcome is here.