India's ITC Ltd, franchisee for the US-based Sheraton leisure group, has finalized its hotel land deal with the Sri Lankan government paying 50% or US$73.5 million for the 5-acre plot of land opposite Galle face Green in Colombo, Minister of Economic Development Basil Rajapaksa said.
The Indian government has approved ITC Ltd's plan of investment in the Sri Lankan hotel sector as it hopes that the presence of ITC in Sri Lanka will be a significant contribution towards promoting Foreign Direct Investment and tourism in the country, he added. He told the Business Times that the conglomerate which has assets from tobacco to hotels will invest US$ 300 million to build an up-market luxury hotel with the world-renowned Sheraton brand name on land that was earlier assigned to CATIC from China. Wide-ranging tax incentives and the proposed tax exemptions will be issued to ITC after receiving the full payment of US$73.5 million, he said. The land adjoining the Army headquarters had been earlier demarcated for CATIC on outright purchase basis but the approval was reversed to a lease agreement which the latter was not in favour of. When asked about the US$ 54.4 million payment made by CATIC earlier to purchase the same land, he said that the money is lying in the Treasury and it will be reimbursed.
The tourism sector has been experiencing an impressive growth both in terms of arrivals and the revenue to the country in foreign exchange following the country's return to peace and normalcy in 2009. International investors including-Shangri-La Group, CATIC (China), the Minor group (Thailand) and M-Far Hotels (Oman) and ITC (India) have committed substantial investments in Sri Lanka while Six Senses Hotels, Banyan Group, Accor Hotels, and Dusit (Thailand),) have either invested or are currently exploring opportunities to make investments, officials said.