Financial Times

Govt. backs down after HSBC threatens to shift investment
The government has backed down from a decision to oust a proposed call centre by HSBC on the site of a playground in Rajagiriya after the banking multinational threatened to take its investment elsewhere.

The Sunday Times FT learns that the government has reversed its decision to prevent HSBC Data Processing Lanka Ltd. (HDPL) from going ahead with its construction of the Business Processing Outsourcing (BPO) centre at its original proposed site at Rajagiriya.

Lorne Bailey, Managing Director, HDPL told The Sunday Times FT he is awaiting communication from the Kotte Municipal Council providing the authority to recommence construction of their site.

He said that they hope to resume work on the site tomorrow. Currently, HDPL is operating on five floors from the World Trade Centre (WTC). The Urban Development Authority (UDA) had acquired this land, which was originally earmarked for a stadium, belonging to the Kotte Municipal Council at market value. Later the UDA in turn had sold it to the Board of Investment (BOI), subsequent to which the latter had leased it to HDPL.

BOI sources said former Commerce Minister Ravi Karunanayake had mooted a Cabinet decision to hand the land over to the BOI overlooking the fact that it was to be made a stadium to honour Chandra Silva, the late former Mayor of Kotte.

Tourism and Industry deputy minister Arjuna Ranatunge promised during the election campaign to build a football stadium in honour of the former mayor. When the previous government fell, construction of the HDPL stopped with immediate effect.

HDPL, which had already started operations at the WTC with the hope of moving to the Rajagiriya building, had threatened to shift to the Philippines if the issue was not resolved.

The Sunday Times FT learns that Malcolm Wagget, Chief Operation Officer, HSBC Data Processing India (HDPI) was in Sri Lanka last week on a four day visit to clear the dispute with the authorities over their Rajagiriya site.

Bailey said Wagget spoke to the BOI, the UDA and other local authorities. Sources said that tycoon Harry Jayawardena, Director, BOI and Advisor to the President had spoken to the latter on the matter and it was decided to let HDPL move ahead.

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