News
TRCSL to hand over Lotus Tower to Treasury-owned company
The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) will sign a management agreement with and hand over the running of the Colombo Lotus Tower to a fully Treasury-owned company with an independent Board of Directors.
The Board will have nominees of TRCSL which is the owner of the asset. As the sector regulator, the TRCSL is not mandated to carry out commercial operations as it would be a conflict of interest. The proposal to set up the Colombo Lotus Tower Company was recently approved by Cabinet.
The Lotus Tower:Questions are being raised as to the delay in putting it to use
The agreement for the project was signed around nine years ago by China National Electronics Importers and Exporters Corporation (CEIEC) and Aerospace Long March International Trade Co. Ltd (ALIT) with the TRCSL. The CEIEC has for months being doing defect rectification and finishing touches which have been quite extensive. It must complete substantial paperwork and certifications–under a team from Moratuwa University that handled design review and project management–before handing the completed project over to the TRCSL. The Central Engineering Consultancy Bureau will also carry out a vetting.
The Chinese company also ran into some trouble in November last year when the US Department of Treasury’s Office of Foreign Assets Control sanctioned and placed it on the Specially Designated Nationals (SDN) List for providing goods and services to the administration of Nicholas Maduro in Venezuela. This means that, on the Sri Lanka Attorney-General’s advice, the TRCSL has suspended the payment of a remaining US$ 15mn to the contractor (who has consented to this).
A target of September 30, 2021, was initially set as the completion date but this was extended to October 30, said Oshada Senanakaye, TRCSL Director-General. It will thereafter be the task of the new company to commercialise the asset. However, a volunteer team of experts set up by the regulator has already drawn up a comprehensive multi-pronged strategy which will be shared for consideration. A raft of tenders is likely to be called in the process of monetizing the project.
The Lotus Tower and the decision to build it attracted widespread public and political criticism. Questions were repeatedly raised about the delay in putting it to use. Initially, this was the result of the construction developer requesting an extension. But, midway, the project also lost a sense of direction. Consequently, even by 2019, there was no commercialisation plan despite the construction drawing to an end.
Despite not being ready for use, the tower was “inaugurated” in September. It was, however, an empty structure that needed much more work before it could be formally taken over, said Mr Senanayake, adding that, “It should never have been opened.”
The project is a complex operation with an integrated building management system but it had been necessary to check that it was properly commissioned and functioning, from air conditioners and chillers to security and generators. Mr Senanayake said that on his first visit in December 2019 he identified multiple quirks. Even certain aesthetic aspects had to be refined such as washbasins and flimsy fire reel cabinets. There were also technical requirements like the generators and fire systems to be checked. “It was not in a position to be accepted,” he recalled.
The lifts, too, needed verification and attention as they had not been maintained for months. The TRCSL has been cleared to have them checked again by a third party. “It is the heartbeat of the Lotus Tower,” Mr Senanayake described. The lifts are so fast that they travel seven metres per second (the structure is 350m tall).
Last year, a full fire drill was also implemented involving around 200 people including the military and medical staff. It was found then that the fire pumps had not started up automatically as they should. This, too, was fixed. There were also chiller rectifications. “Everything had to be perfect,” the Director-General said. “It couldn’t be a half-baked job. And now we are at the last stage of properly taking over.”
Another delay was over the allocation of the Lotus Tower land which was not finalised till the Cabinet approved it two weeks ago. Four acres belonged to the Urban Development Authority while three acres was the Sri Lanka Port Authority’s. The entire seven acres have now been vested with the TRCSL after much discussion.