Wednesday Dec 11, 2024
Wednesday Dec 11, 2024
Friday, 5 October 2012 00:01 - - {{hitsCtrl.values.hits}}
By Uditha Jayasinghe
On the back of the lucrative Krrish Group deal, Cabinet has approved a US$ 140 million hotel project by the Indian Tobacco Company (ITC) to tap into the post-war tourism boom.
ITC announced the intention of leasing out land on the premier seaside strip of the capital earlier this year and paid US$ 73.5 million to the Sri Lankan Government in May. However, the ITC deal is far lower than the US$ 550 million project by Shangri-la, which will be next door. Both ventures are on former Army Headquarters premises.
This will be the second large-scale Indian hotel development project announced in a month, with Krrish Group signing a US$ 460 million mixed development project in September.
“The ITC venture will include luxury residencies and shopping malls as well as the hotel,” Cabinet Spokesman and Media Minister Keheliya Rambukwella told reporters. In July the Government gave sweeping tax concessions to ITC including a 10-year tax holiday starting from the first year of profits or three years after operations.
The firm will also get a tax concession of six per cent or half the rate of tax for hotels, whichever is lower, within the next 15 years.
ITC’s hotel business comprises over 100 owned and managed properties spread across India and started with its own hotel chain ITC-Welcomgroup Hotel Chola.
This is the latest investment since Sri Lanka’s tourism took off after the end of a three-decade war in 2009.
Several international brands including Shangri-la, Sheraton, Hyatt and Sun City have already signed on to invest around US$ 2 billion in hotel projects.
During the first eight months of 2012 arrivals rose 15.8 per cent to 622,661, with August numbers increasing 9.7 per cent from a year earlier. Sri Lanka has set a target of one million tourists for 2012.
