‘Chinese Face!’

Sri Lanka doesn’t have a street or boulevard called ‘China Town,’ but Colombo could well be tagged as ‘Chinese City’ soon. Even before the first sod is cut for the much-hyped Hong Kong-based Shangri La’s mega project at Galle Face, the Cabinet this week approved another five-star cum multi-complex to be built in the same vicinity by China National Aero Technology Import and Export Corporation (CATIC).

As per official sources, CATIC intends to purchase land around the Galle Face Green area to build a multifunctional complex comprising a five-star hotel and a shopping mall with a direct investment of nearly US$ 500 million.

The venture is called CATIC Grant Skyline Hotel and Rainbow Multifunctional Complex in Colombo.

On the recommendation of Minister of Economic Development Basil Rajapaksa, the Cabinet has approved CATIC’s project proposal to be proceeded on the basis of agreement concluded with the earlier investor, Shangri-La Hotels Lanka Ltd.

The combined projects would entail an investment of US$ 1 billion.

CATIC is a leading trading corporation of China with its core business is aviation

defence products, both import and export and secondary interests in hotels.

Headquartered in Beijing, CATIC has seven specialised companies, 10 regional subsidiaries in China and 56 overseas branches worldwide. With its total assets of up to RMB 24 billion and accumulated import and export volume of US$ 24 billion thus far, CATIC ranks among the first 20 of China’s top 500 enterprises for import and export.

The new Cabinet deal comes hot on the heels of the Government approving a project by Shangri La. It is purchasing six acres of land in Galle Face for US$ 76 million to build a multi-use complex with high-end retailing, deluxe apartments and a 500-key luxury hotel to open in early 2014.

Shangri La is also planning to develop a second property, a 300-key city resort on approximately 100 acres of land in Hambantota, to open in 2013.

The Shangri La deal has drawn lot of flak from the main opposition UNP. The leisure industry welcomes the entry of the world-renowned brand, though there are reservations about how the deal was struck. Both deals were unsolicited, whilst there wasn’t any competitive bidding, as a result of which the Government remains exposed for lack of transparency according to analysts.

Sources also said it wasn’t Shangri La which is investing but a different company on whose property the globally-famous brand will shine.

Hong Kong-based Shangri La Asia Limited, one of the world’s premier hotel companies, currently owns and/or manages 70 hotels under the Shangri La and Traders brands, with a room inventory of over 30,000.

Over almost four decades, the group has established its brand hallmark of ‘hospitality from the heart’. It has a substantial development pipeline with upcoming projects in Austria, Canada, mainland China, India, Macau, Malaysia, Philippines, Mongolia, Russia, Qatar, Turkey and the United Kingdom.

In announcing the Sri Lanka venture Greg Dogan, president and chief executive officer of Shangri-La International Hotel Management Ltd said: ‘Sri Lanka is a country of unsurpassed natural beauty, rich in cultural heritage and above all it is well recognized for its warm and hospitable population.”

“The local government is fully committed to rebuilding the economy following the end of three decades of conflict and we believe that Shangri-La will be able to assist in positioning the country as a prime global tourist destination. Both Shangri-La hotels strategically fit into the group’s ongoing expansion plans to link the Indian subcontinent and our South East Asia developments,” Dogan added.

In a Shangri La issued statement Treasury Secretary Dr. P.B. Jayasundera was quoted as saying ‘The entry of the Shangri-la global network is an endorsement of the economic prospects that Sri Lanka has gained since His Excellency the President, Mahinda Rajapaksa ending the long drawn conflict, and accelerating long term infrastructure development, through the creation of a stable economic environment while promoting a rural-centric development strategy. It also marks the beginning of a new journey of a high level of Foreign Direct Investment that Sri Lanka needs in order to accelerate an economic growth in excess of eight percent and position Sri Lanka as an emerging middle income country in Asia.”

The Secretary also confirmed that several of the world’s leading investors have expressed interest to undertake a wide range of investment activities in 2011.