Famous Singapore retailer Mustafa returns to Colombo
The Board of Investment (BOI) is stepping on the pedal to revive Sri Lanka’s investment climate, facilitating clearances for several stalled projects worth millions of dollars in addition to new Foreign Direct Investments (FDI) this year, a top official said.
Several investors who abandoned their projects during the previous regime are returning to revive their stalled projects due to confidence building efforts of the BOI, an upbeat chairman of the investment promotion agency, senior lawyer Upul Jayasuriya told the Business Times.
This was a welcome sign for the New Year, he said adding that everyone at the BOI encouraged investors clearing negative publicity given by certain media as the country is in need of much needed foreign exchange at present.
In an interview with Business Times, he noted that the BOI has made it easier for foreign and local private sector companies to invest in the country by introducing new systems including public –private sector partnerships to set up joint ventures in investment zones, new reforms and liberalising land ownership.
The return of Mustafa is reminiscent of a famous Egyptian hit “Ya Mustafa Ya Mustafa” which was popular on Sri Lankan airwaves in the 1960-70s.
The popular Singapore retailer – where many Sri Lankans made a beeline for shopping – is returning to revive its mixed development project under the banner of Hotel Ten (Pvt) Ltd in an agreement that was originally signed in 2012, he disclosed.
The company has signed a supplementary agreement with the BOI to resurrect the US$115 million Hotel Ten project, Mr. Jayasuriya revealed.
The project will feature a 975-room hotel, a retail development store, 400 serviced apartments and a 1,000-vehicle car park, with a gross floor area (GFA) of 142,125 sq metres at Sir Ramanathan Mawatha, Colombo 15.
The Mohamed Mustafa Group has already made an upfront $10 million dollar investment with a bank guarantee of $3 million pledging to bring $60 million within three years during the project construction period, he added.
Overseas Realty (Ceylon) Ltd (ORCL), a unit of Singapore’s Shing Kwan group, will soon begin work on the stalled second phase of the Havelock City, a commercial complex including a retail mall with an investment of $5 million.
The initial agreement of this project was signed in 2010 and the supplementary agreement has been signed recently, Mr. Jayasuriya disclosed.
The $400 million 36-storied mixed development complex ‘Colombo Crown’ comprising a super luxury resort coupled with a mega hotel will be coming up on a 500 perch prime block of land at D.R. Wijeyawardene Mawatha in Fort.
This BOI agreement reached with Ravi Wijeratne, chairman-owner of conglomerate Rank Holdings during the previous regime as a project promoted by global casino magnate James Packer, is still valid to resume the project suspended in 2015 by the authorities who opposed a casino deal, he pointed out.
Rank Holdings has planned to build the country’s first integrated resort with 450 luxury rooms, a signature restaurant and bars, a spa and pool and a “thematic lake water feature, he said, but added “no casino complex will be allowed under the agreement”.
Referring to the recent Volkswagen saga Mr. Jayasuriya said that Volkswagen had abandoned its Sri Lanka project after being found guilty of an emission test fraud which has cost the company heavily for paying massive damages.
He added that they came to know about the withdrawal of the Volkswagen plant here only recently and Senok through a company named Western Automobile has entered into a supplementary agreement with the BOI to revive the project, laying the foundation stone for the new factory at Kuliyapitiya recently.
These hiccups are normal during implementation of foreign investment projects, he said adding that everyone should be happy about reviving the project which will create many employment for youth in the area.
He pointed out that the governments (present and past) should support local industries without forcing it to close down creating economic consequences detrimental to the country.
Citing an example, he noted that business tycoon, the late Upali Wijewardene who was the pioneer of motor car assembly in Sri Lanka had to close down his Upali Motor Company (UMC) which assembled Fiat cars in the island during 1970s due to step motherly treatment by the then government.
If that factory was allowed to continue, Sri Lanka would have become one of the major Fiat car exporting countries, he said adding that no one should contribute towards the downfall of industrial ventures.
Referring to the FDI position, he said uncertainty prevailed in 2015 and 2016, mostly due to political changes, and the BOI has not been able to attract considerable foreign investments.
The FDI has recorded a very low level of $600 to $300 million during the past two years but will regain the momentum this year, he assured.