Krrish finally seals Transworks House land deal in Colombo
Indian real estate company Krrish Group has finally sealed the controversial Transworks House land deal, that drew allegations of huge pay-offs to politicians and officials, signing a lease agreement with the Urban Development Authority (UDA) in October.The new agreement, not known to the public until officials revealed it to the Business Times (BT) on Thursday, involves a block of land slightly smaller in size than the earlier proposed deal. Officials at the Board of Investment (BOI), which has been involved in the negotiations, said they were unaware of the new development but were checking on the query by the BT.
The move paves the way for work to begin at the long-overdue US$650 million mixed development project at a British era heritage building site in Fort. The signing of the new lease was confirmed both by a senior UDA official and an official at Krrish’s local office.In the aftermath of signing the agreement between the UDA and Krrish Transworks Colombo (Pvt) Ltd, the police Financial Crimes Investigations Division (FCID) launched an investigation into the irregularities and alleged secret payoffs in the Krrish project made to some top officials of the former regime including some powerful politicians to fast track relevant approvals, official sources revealed.
The UDA official said under the new agreement, 3.7 acres of land have been cleared for the Krrish Square project. The balance 0.6 acres – in the original plan to be given to Krrish – was not included in the latest lease agreement. This land had been leased temporarily to the People’s Bank and the Central Bank for Rs. 100.4 million by the UDA, he disclosed.Krrish’s Colombo office is now in the process of selecting an international contractor from three reputed (and already) shortlisted foreign companies, a company official said adding that an internationally managed hotel chain has agreed to partner this project. The delay in the project was due to a dispute over the last payment (about Rs. 600 million) which at one time was said to have been money given to a go-between in the transaction.
Prime Minister Ranil Wickremesinghe, Finance Minister Ravi Karunanayke, Deputy Minister Dr. Harsha de Silva and several UNP MPs were highly vociferous in and outside Parliament when they were in the opposition during the 2013- 14 period against the lack of transparency in the ‘Krrish deal’.Dr. de Silva in a statement in parliament in end August 2013 noted that names of several key figures including that of the then Chairman of the Securities and Exchange Commission Nalaka Godahewa had been linked to secret payments that have been allegedly paid to secure the legal rights to develop the land.Initially the UDA entered into a Memorandum of Understanding with the Krrish Group to formulate the project, but the lease agreement had not been signed, officials said.The company has initially deposited a sum of Rs. 499.5 million being 10 per cent of the total lease premium as a commitment fee on September 14, 2012.