IRANAWILA, Chilaw -- A Swedish national who had high hopes of investing in a good project in Sri Lanka that would boost the tourism industry and also provide employment for village youth is now left wondering whether the country is actually interested in foreign investors – after struggling with his project for the past four to five years, and spending Rs 50 million on the way!
Nilssonya Hotel nearing completion |
Ingemar Nilsson is no stranger to Sri Lanka as he has been involved in a development project that was financed by the Swedish government, and has been living here for more than 10 long years. After the project was completed, he bought a land in Iranawila along the beachfront near Chilaw and with his wife decided to make Sri Lanka their home.
Joining up with a couple of friends from Sweden, he decided to set up a hotel and got the approval of the Board of Investment (BOI) in 2004. The Tourist Board granted approval by letter - Dev/04/1057 dated 27/9/2006. The Board also asked Mr Nilsson to get clearance from the Urban Development Authority, Provincial Environmental Authority (North Western Province) and the Naththandiya Pradeshiya Sabha,he told The Sunday Times FT in an interview at the site. All this was done.
Just before construction began, he paid the contractor an advance of Rs 7 million and obtained an Advance Payment Bond from the Sri Lanka Insurance Corporation (SLIC). He said the Bond effective period was extended a few times as the contractor failed to complete the contracted quantities of work even by the last extended date of May 31, 2008. He then submitted a claim for Rs 6 million to the ICSL for breaching the Bond.
The SLIC sent an assessor to evaluate the status of construction who agreed that the required construction quota has not been done and therefore the terms of the Bond should be honoured, Mr Nilsson said.
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| Ingemar Nilsson |
However there were inordinate delays in settling the claim despite Mr Nilsson shuttling to and from the Insurance Corporation. In desperation he filed a complaint with the Insurance Ombudsman of Sri Lanka. After an inquiry, the Ombudsman concluded that “An independent Consultant Engineer appointed by the Sri Lanka Insurance Corporation Mr Bandula Amarasekera conducted an evaluation and agreed on the correctness of the claim/request to pay the Bond. In all the above circumstances, I kindly direct SLIC to pay Rs 5 million due on the above Bond to Mr Ingemar Nilsson.”
Mr Nilsson said in an indirect way the Insurance Ombudsman told the SLIC that litigation would end up with the SLIC paying the dues as stipulated in the Bond. The communication of the Ombudsman is dated 22/12/2008 and addressed to Mr Suren Galaboda, CEO/General Insurance, SLIC.
Mr Nilsson has now written to the Insurance Board of Sri Lanka to intervene in the matter prior to going for litigation as the last resort. His lawyers have also sent a letter of demand to SLIC.
Mr Nilsson said that he was pushed around to such an extent that “I wanted to give up the entire project’ but he couldn’t take such a decision as he has already spent a huge sum on the project.
After struggling through this crisis, from ‘out of the blues’ came a notice from the Coast Conservation Department saying he needs approval – a process he was not informed before by the BOI or any other state agency. The notice from the department (DC/2007/856 dated 23/3/2007) from H N R Perera, Director, Coast Conservation Department says that no building should be constructed after 1/10/1983 and before the expiry of two weeks of this notice, any building if constructed should be demolished.
All this happened after Mr Nilsson obtained all the approvals consequent to submitting the survey plans, building applications, etc and spent close to Rs 50 million on the project.
Subsequently – after his complaints – the department (Coast Conservation Department) by letter of PA/12/HT/06/153 of 19/6/2007 withdrew the earlier demolition order of DO/2007/856 of 23/3/2007 with no reasons given of any violation.
The point in issue is not the discretion of the officials to threaten to demolish a building that has been constructed adhering to proper procedure, but why officials in other state agencies didn’t advice Mr Nilsson on the steps to be taken in such an investment project.
Mr Nilsson’s nicely-built two storied building lies just beyond the Voice of America relay station. It is a 10-room hotel named ‘Nilssonya’ with facilities for conferences and other activities. He hopes to complete construction by May or June 2009.
Once completed, Nilssonya would be the first tourist hotel in the area with a few other hotels also coming up providing employment opportunities for village youth.
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