UDA sorts out certain contractual matters of TATA housing project
Sri Lanka’s Urban Development Authority (UDA) will be sorting out certain contractual matters relating to TATA housing project in Slave Island, Colombo with the company due to hand over the construction work to a prospective Investor, top UDA official revealed. “We are discussing some issues raised by some government ministers and parliamentarians with officials of India’s Tata Housing Development Company and all such matters will be sorted out by consultations, compromise and consensus,” Chairman UDA Ranjith Fernando told Business Times.
The commencement of the construction work for the redevelopment of buildings under the US$ 429.5 million Strategic Development Project would be delayed till a consensus is reached with the Indian company on some of the issues raised, he said without elaborating about concerns expressed by them.
One-Colombo Project (Pvt) Ltd, a 100 per cent subsidiary of Tata Housing Development Company Ltd, had partnered with the UDA to redevelop eight acres of land located at Slave Island, Colombo.
The company is developing around three acres of land for rehabilitation of the inhabitants in lieu of which, around four acres of land, net of areas for roads and public infrastructure, has been granted to it for a mixed use development project.
Under the agreement with the Board of Investment of Sri Lanka (BOI), it has committed to invest $429.5 million over a period of 8 to 10 years with a foreign direct investment of $130 million over this period.
The project envisaged construction of three apartment blocks comprising 40 storeys, each containing 580 housing units, each unit being of 400 sq ft. Tata was to recover its investment by building 96 luxury housing apartments. Construction was expected to be completed in two-and-a-half years.The total cost for providing relocation houses/commercial units was estimated at around $43.6 million including rental payments for temporary accommodation of the evicted families.
A senior Finance Ministry official, who wished to remain anonymous, disclosed that Tata India has so far made only a $20 million financial commitment for the project while being given generous tax concessions including a 10-year tax holiday.
Meanwhile Tata Housing Development Company refuted reports of a review of its mixed development project in Sri Lanka stating that these allegations are “not factual in nature”.
“Such actions by the government discredits the authorities in Sri Lanka that have been engaging with Tata Housing over the past three and half years and have granted multiple approvals for the project based on its merit. Besides, such arbitrary actions will also adversely impact confidence of overseas companies to make future investments in Sri Lanka,” a media release from the company said.
It said the whole process of land acquisition including negotiating with the inhabitants, payment of rental and compensation, signing of the agreements and demolition of earlier buildings was handled solely by the UDA.