COLOMBO (EconomyNext) – Sri Lanka’s John Keells Holdings said it will go ahead with its Waterfront property project without a casino but would continue to "engage" the goverment on the issue, after the island’s new adminstration said it had decided to block casinos in intergrated resorts.
The company said in a stock exchange filing the loss of its ability to lure gamblers will make it difficult for the property to command "premium rentals".
But it said the project’s diverse revenue streams gives the group confidence to continue with it.
JKH said the project has been branded as ‘Cinnamon Life’ and that "demand for both residential and commercial spaces continues to remain encouraging."
Construction work on the project has already started on freehold land at Glennie Street in Colombo.
In December 2014, John Keells Holdings said it has struck a deal with Standard Chartered Bank for a syndicated loan of 445 million US dollars for the project.
The high-rise property project, being done by a subsidiary Waterfront Properties (Private) Limited, includes a hotel, retail arcade, conference centres, and commercial office space and residential apartments.
On Thursday, the new government presented an interim budget and said it had decided to withdraw tax breaks given to the casino that was part of the Waterfront project, as well as two other casino projects.
The plan to set up casinos and the tax breaks given to them has drawn popular opposition.
JKH stock exchange filing Friday said the government had decided to amend its agreement with Waterfront Properties Pvt Ltd under the Strategic Development Projects Act to restrict the ability to rent space for gaming activities.
The company will "engage" with the government on the decision, JKH said.
"While the proposed amendment will constrain the ability to command premium rentals on this component of the project, the multi-faceted nature of this development gives your Board the confidence that the project will still be viable given its diverse portfolio of revenue streams and iconic design which we believe will transform the landscape of Colombo.
"As such, the project will continue as planned," JKH said.