Sri Lanka to renegotiate Tata property project
EconomyNext – Sri Lanka’s new government will renegotiate a property project in Colombo awarded to India’s Tata Housing Development Company for which generous tax breaks have lapsed after it was not to put to parliament for approval.
Government spokesman Health Minister Rajitha Senaratne said proper procedures had not been followed by the former Rajapaksa regime in seizing the land for the project with residents evicted by force using the military.
"We have to renegotiate with the developer," he told a news conference Thursday.
The mixed development project, on which construction is underway, is on eight acres of land in Slave Island, considered prime commercial property. It includes residential and commercial space and luxury apartments.
Tata set up a local company in Sri Lanka called One Colombo Project (Private) Limited. The projected is promoted by the Urban Development Authority.
"The land was seized by force. The army was used to evict residents," Senaratne said.
"Land acquisition will have to be done anew and compensation given in the proper manner. It was none not according to the correct procedure. Now we’re going to restart the procedure to compensate them accordingly."
Senaratne said the government will pay compensation as it was the government which acquired the land to be given to the developer.
The project given to Tata Housing Development Company also drew some criticism because of generous tax breaks given to the firm, including a 10-year waiver on corporate income tax waiver, other than from sale of apartments, and exemption for income generated through the sale of apartments is six years.
Dividends distributed to shareholders out of exempted profit were also to be exempted from income tax for at least six years.
But according to documents submoitted to the cabinet of minister to renegotiate the project, these tax concessions have lapsed as hey were not approved by parliament under the former regime.