Having announced their move into the Sri Lankan market with what is tipped to be the largest sole foreign investor project – Krrish Square at Fort – Krrish Group has been the talk of the town, with reports circulating on project delays, investor losing interest, and black money coming into the country. In an interview with the Daily FT, Krrish Group CEO R.P. Gupta shares his thoughts and views on the reports and assures his commitment to the project which he says will eventually change the landscape of Colombo
By Cheranka Mendis
Q: We heard there have been some delays on your part in starting the project?
A: There have been no delays whatsoever. We are actually ahead of schedule. We have paid what was required to the Urban Development Authority (UDA). What Sri Lankans must understand is that these projects take more than a year to plan. I feel that because projects of this magnitude have not happened in Sri Lanka before, people were not aware of the complexities that go with it. We have not lost interest. In fact we are vigorously following up on the process.
Q: Are we to understand that the sum payable to the UDA is now complete?
A: We had an agreed schedule of payment and we have paid more than what is required at this stage. The UDA is more than satisfied with our payment. The agreement with the UDA was based on certain conditions, and they have stipulated time periods to make the payment; accordingly we have planned our financial resources. I reiterate that we are paying more than what is required in the agreement.
Q: How much would this be?
A: It is still premature to give the total sum. However, it is a substantial amount and a major part of the land price.
Q: We also heard that the units are likely to be priced at Rs. 80-90 million each. In this backdrop, who are your target customers and does Sri Lanka have that kind of money to buy?
A: We have seen tremendous interest from Sri Lankan expatriates and locals in buying the units. Apart from this, we are targeting the Fortune 500 companies. We have former Chairman of Louis Vuitton North America Renaud Dutreil on our board and he is having discussions with top brands internationally and they seem quite interested in setting up here. As he was also a former member of France’s Parliament, his influence is wide-reaching and will no doubt add value to the project.
What they (big corporates and fashion houses) need is infrastructure, and we are in consultation with them to see what they want and how they want it at this stage in order to provide that. We also have on board a French architect (Edward Francois) to do the commercial areas, i.e. mall and hotel. This architect is the principal architect for Louis Vuitton Group. We are in that way active in various directions in bringing the kind of infrastructure needed for Sri Lanka. We hope that this project will be a source of pride for Sri Lanka and that Sri Lankans will be proud of this complex.
Q: When you initially launched in September last year, you mentioned selling of units would commence immediately. What came of that decision?
A: Seeing the negative reports on this issue, we decided not to go for it and held back. Now once construction starts in June this year and all planning is in position and the amount is paid completely to the UDA, we will start. In two to three months’ time we should be ready to start selling the units.
Q: What do you think triggered the negative reports?
A: Maybe because we were so busy in our planning process, we did not take time to look at the local media reports. This is the kind of project that requires a lot of planning, it is no ordinary project, and is one of the 10 biggest projects in the world. It needs a lot of input. We were totally focused on engaging the international consultants, discussing with them back and forth, holding workshops, inviting consultants together so that everyone is thinking on the same lines, etc. We were busy. We never thought it would be taken like this. Because we were busy we did not publicise the project, which is an essential part of the business. Maybe due to this, the people would have thought we were not interested.
Q: You said this was one of 10 largest projects in the world. Why pick Sri Lanka for such a development?
A: After peace having returned to Sri Lanka and the progressive policies the President has demonstrated to the outside world that show they are willing to attract foreign investors, give concessions to them and facilitate developments, we thought this was the best place to go and we got an opportunity. We had discussions with the relevant parties and decided to build this complex.
Q: There were also reports that the company has been laundering black money. Your comments?
A: Every single amount of money for the project has come through banking channels; every rupee has come that way. It is not possible to do as you say. And this is coming from an Indian bank and not one of those banks that are located in so-so places. It is coming from India. And this is all our own money.
Q: How do you plan on financing the project?
A: We will go to banks later because no such project can be completed with your own money. So far however we have financed it from our own internal resources. The UDA payment has come from our resources.
Q: There was speculation about the group’s lack of credibility, with no major project completed so far. What are your comments?
A: One has to see whether any project we have undertaken have been delayed so far. These types of projects take time to complete so whatever commitment we have given, we have not failed; whatever promises we have made to our customers have been fulfilled. No one can complain. If you come to India you will find that the image of Krrish Group is that we deliver. Krrish Township project in Gurgaon, which is one of our key projects, has been done according to plan, and on time. We have given the plots and everyone has made double the money compared to what they invested in the beginning. All I can say is that such projects do take time but progress is as planned and we are ahead of schedule already.
Q: By when do you hope to get your returns through Krrish Square?
A: Returns for such projects come after the completion of the project. We do not want share this commercial detail of by when we expect to get our returns at this stage. The real cost of the project will only be known upon completion and then we will announce our expectations.
Q: At the launch, you announced various parties that had been chosen for the project. Have they changed since then?
A: Our principal architect has changed. At the initial announcement we named C.P. Kukreja Associates as the architects for the project. They have now been replaced by Bob Atwal Associates. Bob Atwal was a former associate partner of UK-based Norman Foster, the king of architects in the architectural world. Atwal has experience in large-scale development and mix high rise buildings across the world.
Q: Why was this change made?
A: No major reason. However, when we went along with the planning and structural designs and various technical consultants came in, we found that it would be more appropriate if we have a higher level of architect. As the new principal architect has done a number of such complexes, we felt it best to have that experience on board.
Q: You said construction would start in June. From where will you source the labour?
A: It will be a mixture of Sri Lankans and Indians. Whatever is locally available, the first preference will go to the locals, but when there is a need for expertise not available here, then we will look at India. Sri Lanka is pretty progressive. Even if the people have no such experience for this kind of project, we are confident that very soon they will be up in their game.
Q: The group has interest in distilleries and breweries in India. Any idea of exploring the area here?
A: We have a high luxury brand of vodka from Paris which we are hoping to introduce soon. However, this will be independent from the Krrish Square in Fort. There will be no links between the two. We will reveal more details soon.
Q: What is your opinion of Sri Lanka?
A: Sri Lanka is moving forward at a fast pace. I think Sri Lanka is going to be the next business destination of the world. You have scenic strategic locations, scenic environment, and taking into consideration the high literacy level, level of work force, and at the top the Government polices – because ultimately Government policies are crucial to any investment to the country – Sri Lanka has what it takes to become the next business destination of the world . The country is quite progressive.
Q: Any final comments for our readers?
A: I dispel the notion that there is any doubt about the Krrish Group coming. We are here to stay and we are here to complete the project and make Sri Lanka proud of this project. I hope the people will realise this and be part of this venture that will benefit the country in many ways.