Paradise for lease!

By Cheranka Mendis

The Sri Lanka Tourism Development Authority (SLTDA) is offering 2717.243 acres of land and 415.7 acres of water body in six selected areas for eco-friendly beach, wildlife and waterfront developments.

Located in Kalpitiya, Kuchc-haveli, Bentota, Pasikudah, Dedduwa and Yala, all land offered will be given on a long-term 99-year lease upon payment of total lease rental upfront as determined by the Valuation Department. The projects are all part of Sri Lanka Tourism planned development and are within the tourism zones previously identified.

Project proposals have been called from investors for the development projects and the expectation is to start the projects as soon as possible. No deadlines have been given for proposals.

Sri Lanka Tourism Director General Vipula Wanigasekera told the Daily FT that the land had been available for some time but due to issues on land clearance and wildlife guidelines, there had been delays in advertising it for development.

“We are now marketing all the land projects together to recreate awareness and for Sri Lanka Tourism to assess the projects and their capabilities of fulfilling the long-term objectives of SLTDA.”

Land is a very precious commodity and these are some of the last major land leases under tourism, he noted, adding, “This is all we have.”

Under the Kalpitiya Integrated Tourism Resort Project, eight separate islands containing a total land extent of 832 acres are in the market. An investor will only be given one island.

The largest Cabinet-approved tourism destination in Sri Lanka, SLTDA is targeting 5,000 rooms for the total area of 14 islands in Kalpitiya. A fine spot for high-end tourism, the target is to make Kalpitiya a destination of its own like Bali.





Project Architect for Kalpitiya Pradeep Fernando noted that the plan was to market rooms in Kalpitiya for US$ 250 per night on average, to be on par with the upmarket destinations closer to home such as Maldives and Mauritius.

“Another objective is to establish an eco-friendly green resort with zero carbon emission with sustainable development and renewable energy,” Fernando said. “We want to make this a benchmark project for the region.”

The eight islands are offered under Phase One of the Kalpitiya Integrated Tourism Resort Project where 14 islands have been identified for development. Previously two tenders were called in 2009 and 2010, of which the latter was cancelled, citing better investor prospects for the island.

Fernando stated that under the first tender five islands were offered for bidding, of which four have been taken up by two interested parties. Vellai Islands I, II and III were taken up by Let’s Travel Pvt. Ltd., while Ippanthivu Island was taken by Qube Lanka Leisure Pvt. Ltd.

“The investors have mobilised into the island and will shortly begin construction. The hotels should be in operation by 2014.”

A five-star high-end luxury resorts is to be built by Qube Lanka. An 18-hole golf course, special interest diving school, yachts, and marinas are expected to be erected.

After the cancellation of the second tender, during which the Land Alienation Policy changed to take in 99-year leases instead of the previous 30 years, SLTDA called for unsolicited proposals for the islands. Several proposals are now under scrutiny, he noted. “The eight islands we advertise now fall under Phase One development of 14 islands.”

A total of 17 islands have been identified under Phase Two development, of which 10 islands have recently been vested under Sri Lanka Tourism. Officials are now working to get the remaining seven also under Sri Lanka Tourism before calling for proposals.

A total of 1,318.4 acres of marshy land and 415.7 acres of water body are also up for grabs in Dedduwa, under the Dedduwa Lake Resort Project, where the whole extent of land is offered for one investor or developer. Expectation for the type of resort is a 100-room activity-based eco resort. Government valuation has not been given for the land as yet, sources said.

The Daily FT also learns that 510 acres of land in Kuchchaveli will be leased out for Rs. 20 million an acre, with a minimum of 10 acres per investor. The site, abutting the main road, contains 17 separate blocks of thick scrub jungle land with a beach frontage. Currently only one hotel operates in the area and SLTDA expects a beach resort of three-star or higher star category.

In Pasikudah, 56 acres are on offer to be developed as a public area with restaurants, food courts, shopping complexes, parks and aquariums. Currently two hotels, Maalu Maalu and Amethyst, are in operation and 12 are under construction under the 156-acre National Holiday Resort Pasikudah project.

The hotels are expected to be in operation by the end of the year, adding some 1,000 rooms to the total room inventory of the country. All hotels are expected to be three-star and above.

Just one plot of land of 0.843 acres is available for development in Bentota. Bordered by the sea from the west and the Bentota River from the east, the land is being offered for a luxury villa resort with 15-20 rooms for a sum of Rs. 99.5 million, SLTDA sources who wished to remain anonymous said. Seven hotels are currently operating in the designated development project area with 600 rooms between them.

In Yala, land is offered to set up park bungalows and camping sites and has been valued at Rs. 8 million per acre. The land is situated in the buffer zone, just 1.5 km away from Yala National Park.

Wanigasekera stated that selected proposals from those submitted to SLTDA would be sent to a Cabinet-appointed reviewing committee for final decision by the Cabinet of Ministers.