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Tuesday June 18th, 2024

Sri Lanka flexible for investor to start Grand Hyatt operations – Minister

ECONOMYNEXT – Sri Lanka is ready to be flexible on the construction cost of the Grand Hyatt building if an investor is ready to complete the building, start operations, and repay a $35 million loan, State Minister for Urban Development and Housing Arundhika Fernando said.

Hyatt building was constructed by then president Mahinda Rajapaksa government with $60 million public money funded by state owned Sri Lanka Insurance, Employees Provident Fund, and Litro Gas Lanka Ltd.

Later it also borrowed $35 million for the construction, Fernando said, amid the construction cost alone doubled in the face of sharp depreciation of the currency and the building with the government failing to find an investor to complete the 48-floor building and start business.

“We are flexible on the $60 million,” Fernando said referring to the public money spent on the project.

“We are ready to give this to an investor who is ready to complete the construction, start the marketing and operations, and repay the $35 million loan.”

“Thera are some issues and we are addressing the issues and trying to find an investor.”

Grand Hyatt is located near the new United States Embassy and in front of Cinnamon Grand, a high-end five-star hotel in the heart of Colombo.

The construction process was suspended when former president Maithripala Sirisena was elected as the country’s leader in 2015 with an investigation into financial misappropriation.

However, the building is yet to be completed and Fernando last year estimated the project needed further $90 million for the completion and start operation.

However, no investor has come forward so far amid the island nation facing an unprecedented economic crisis. (Colombo/Oct 27/2023)

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Sri Lanka telecommunications bill some clauses ruled unconstitutional by SC: Speaker

ECONOMYNEXT – Sri Lanka’s Supreme Court has found a number of clauses in a proposed amendment to the Telecom Telecommunications Amendment bill unconstitutional, speaker Mahinda Yapa Abeywardana said.

“Clause No 8, proposed section 9A 2 of the bill is inconsistent with Article 12 1 of the constitution, however this inconsistency shall cease if word ‘may’ will be replaced with word ‘shall’ as set out in the determination of the supreme court.”

“Clause No 9 is inconsistent with Article 12 1 of the constitution and only can be passed with special majority required under paragraph 2 of the Article 84. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.

Clause No 12, proposed section 17 10 of the bill is inconsistent with Article 12 1 of the constitution and can only be passed with special parliament majority required under Article 84 paragraph 2. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.”

Sections of clauses 13, 18, 20, 33 and 35 were also in violation of the constitution, and could only be passed by a special majority of parliament. (Colombo/Jun18/2024)

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Sri Lanka to exempt one house from imputed rent wealth tax: President

ECONOMYNEXT – Sri Lanka will exempt one house from a proposed wealth tax outlined in an International Monetary Fund program, President Ranil Wickremesinghe said.

About 90 percent of the people’s houses are likely to be exempt from the proposed tax, he said.

“[O]ne house will be exempt from this,” President Wickremesinghe told parliament Monday.

“It is going to have a very high threshold and I do not think the vast majority of the people in this country should even be worried about their house

“Don’t worry your house will be safe.”

The IMF program document however did not mention an exempt on one house, but did mention a threshold.

Taxing houses and thrift in general could have detrimental effects on people’s well-being housing stock and their willingness to remain in the country without migrating, critics say.

Related Sri Lanka to tax imaginary rents on houses under IMF deal

The mechanism of imputed rents was used because rates on houses was assigned to provincial councils and courts could strike it down.

Opposition legislator Harsha de Silva said the Samagi Jana Balwegaya welcomed President Wickremesinghe’s statement. (Colombo/June18/2024)

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Sri Lanka rupee opens weaker at 304.30/55 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee opened at 304.30/55 to the US dollar on Tuesday, while bond yields were broadly stable, and stocks opened 0.02 percent up, dealers said.

The rupee closed at 304.00/15 to the greenback on Friday, before the long weekend.

In equities, Colombo’s All Share Price Index opened 2.06 points higher at 12,312 while the S&P SL20 of more liquid stocks opened down 0.07 percent or 2.63 points to 3,642.

The market turnover was 3.3 million rupees.

In the secondary market, yields were broadly stable, dealers said.

A bond maturing on 15.12.2026 was quoted at 10.10/30, up from 10.05/30 percent.

A bond maturing on 01.07.2028 was quoted at 11.05/30 percent, up from 11.05/20 percent.

A bond maturing on 15.09.2029 was quoted stable at 11.80/85 percent.

A bond maturing on 01.10.2032 was quoted at 11.95/12.10 percent, down from 12.00/10 percent.
(Colombo/Jun18/2024)

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