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Saturday April 20th, 2024

Sri Lanka govt has taken over Krrish project, in search of new investor: Minister

ECONOMYNEXT – Sri Lankan government has taken over controversial Krrish tower project after the Indian investor-led project failed to meet the deadline, State Minister for Urban Development and Housing Arundika Fernando said.

The $650 million mixed development project was initiated during the second term of former President Mahinda Rajapaksa. But it has been marred with controversy with allegations of secret payoffs to several VIPs including Rajapaksa’s legislator son Namal, who had denied the claim.

Minister Fernando said the government is now going ahead with its attempt to find a new investor to complete the project and start the operations.

“The government has already taken over this project. Now we want to find a (new) investor,” Fernando told reporters at a media briefing in Colombo on Thursday (26).

“We gave the deadline to the private sector who was involved in the project. They were given a license for the construction and that license has also expired now,” he said.

He said the Urban Development Ministry has already appointed a committee headed by W S Sathyananda, the secretary to the Ministry.

“Now it is our (state) asset, both the land and the building. The government does not have the money to complete the project. We are in talks with some foreign countries over this. The convenient way is to hand it over to an investor to complete the rest of the project.”

The UDA gave the 3.7-acre land located at the heart of commercial capital Colombo for a 99 year lease at 5 billion rupees in 2012.

The investor was Indian Krrish Group, which has interests in distilleries, breweries and real estate development in India. Originally, the project was scheduled to be completed in 2016 with Chinese constructor Zhongtian Construction awarded the building of the property.

The project originally consisted of two five-star hotels, two apartment blocks and two office complexes.


“The UDA has given one of the best available lands in Colombo. The investor has taken money from the public for residential apartments. So, they (investor) had taken money for the condominium from the public. Due to failure to deliver the promised apartment, there are some court cases against the investor,” Fernando said.

“We want to complete this project. We gave a deadline to them and said we will cancel their license if they do not deliver on time. But that deadline is already over.”

“There is a group of people who have given money (for apartments). There are some who have invested their black money. We don’t intend to return that money. We can’t help that. If they come with an agreement only their request will be discussed.”

The previous government headed by former president Maithripala Sirisena in 2015 investigated if there had been misappropriation in the project.

Namal Rajapaksa MP faced allegations of misappropriating 70 million rupees granted by Indian investor for the development of rugby in Sri Lanka. Rajapaksa has denied any wrongdoing.

Krrish Square was originally planned to have the base of a 10 floor podium for car parking, high end retail stores, shopping complexes etc.

The four high rise towers were to be built as a vertical city.

One of the residential skyscraper was to have the height of podium (10 floors) plus 80 floors and other two would be of podium plus 55 floors.

The fourth tower was to have the height of podium plus 85 floors and was expected to house the seven-star hotel, commercial office spaces etc.

“There is also a threat because the building is dilapidating,” Fernando said.

“So, we must complete this project. We have started assessing the building since we have taken over. We have already sought an engineering report on the building. This is why we have appointed a committee to look into this.”

“We must tell the truth to the investor when we are giving through either a due diligence or situational report.” (Colombo/Oct 26/2023)

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Sri Lanka discussing giving extra land, water for Chinese oil refinery

ECONOMYNEXT – Sri Lanka is in discussions with China’s Sinopec to give extra land and assure water supplies after the company decided to expand the capacity of a planned oil refinery in Hambantota, Energy Minister Kanchana Wijesekera said.

“There are concerns on how the water supply is going to be provided for the refinery,” Minister Wijesekera told reporters Friday.

The refinery will need more land and also revise conditions in a Board of Investment agreement, he said.

Read more
Sinopec to double capacity of new refinery in Sri Lanka’s Hambantota

Recommendations and decisions from Sri Lanka’s side had already been sent and Sinopec is expected to revert back in May.

“We are hoping to sign the agreement once everyone has agreed,” Wijesekara said.

The principle agreements are expected to be signed by June, he said.

The refinery could sell up to 10 percent of its output in the domestic market.

“There is no commitment by the government to purchase anything,” Minister Wijesekera said. (Colombo/Apr19/2024)

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Sri Lanka rupee closes weaker at 302.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 302.00/50 to the US dollar in the spot forex market on Friday, down from 301.50/302.00 a day earlier, dealers said.

There was increased demand for dollars after the central bank bought 715 million dollars from forex markets. In the previous two months it was buying on average about 200 million US dollars, leaving market participants and bank in a ‘oversold’ position.

There were some official dollars sales Friday dealers said.

READ Sri Lanka rupee quoted wide to US dollar as peg inconsistencies flare up

Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed at 11.30/40 percent down from 11.35/40 percent.

A bond maturing on 15.09.2027 closed at 11.95/12.05 percent up from 11.90/12.05 percent.

A bond maturing on 15.12.2028 closed stable at 12.15/25 percent.

A bond maturing on 15.09.2029 closed stable at 12.30/40 percent.

A bond maturing on 01.10.2032 closed stable at 12.40/50 percent. (Colombo/Apr19/2024)

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Sri Lanka stocks close down, banks trade down

ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.

The broader All Share Index closed down 0.38 percent, or 44.80 points, at 11,753; while the S&P SL20 Index closed down 0.53 percent, or 18.46 points, at 3,456.

Turnover was at 1.4 billion. The diversified financials (Rs366mn) and banks (Rs266mn) sectors continued to see selling pressure.

“This was possibly due to uncertainty around the bond discussions,” market participants said.

With the exception of Sampath Bank Plc (up at 77.50) all other banks traded down in the day. Commercial Bank of Ceylon Plc was down at 104.50, Hatton National Bank Plc was down at 188.50, and DFCC Bank Plc was down at 77.00.

LOLC Finance Plc saw the most trades and closed up at 6.40. Another LOLC company, Browns Investments Plc, also saw high traded volumes and closed up at 5.60.

Softlogic Capital Plc was up at 7.00, and Softlogic Holdings Plc was up at 11.20. A trading suspension imposed on SHL.N0000 was lifted effective today as the company submitted the annual report for the year ended 31st March 2023.

However, shares of the Company will remain in the Watch List “due to Qualified Audit Opinion and Emphasis of matter on going concern in the Independent Auditor’s Report in the Audited Financial Statements for the year ended 31st March 2022.”

Dialog Axiata Plc, which announced its merger with Bharti Airtel Thursday, saw its share price close up at 11.90.

“There was some traction on index heavyweights,” market participants pointed out.

Top contributors to the APSI included Aitken Spence Plc (up at 134.50), Ceylon Tobacco Company Plc (up at 1,245.25, and Lion Brewery (Ceylon) Plc (up at 1,048.50).

There was a net foreign inflow of 5 million. (Colombo/Apr19/2024)

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