Doors to close for Grand Hyatt construction as govt battles with financial issues?

Doors to close for Grand Hyatt construction as govt battles with financial issues?

The government’s tight finance policies and the scrutiny by the International Monetary Fund may affect the construction of the Grand Hyatt.

Reports reveal, the government may even end up selling the project mid-constructed.

The Mirror Business reports that a contractor involved in the construction, under the condition of anonymity, said the construction of the Grand Hyatt is now going at a slower pace.

The article notes, the discussions have taken place with Canwill Holdings (Pvt) Ltd – the state owned holding company of the hotel, to further slow down the construction due to financial difficulties.

The 2016 and 2017 budget said, it would dispose non strategic enterprises including the Grand Hyatt.

The paper further notes, an official at the Public Enterprise Development Ministry has said requests for proposals to dispose the hotels, have not been called for as yet.

Former President Mahinda Rajapaksa’s Chief of Staff, Gamini Sedara Senarath, and two others were remanded last month by the Colombo Fort Magistrate for allegedly misusing public funds by illegally investing Rs.4 billion from the Rs.18.5 billion approved by the cabinet for the Grand Hyatt project.

The funds in question had been the allocation for the Kollupitiya Grand Hyatt Regency Hotel, to be constructed by Canwill Holdings Ltd – a company affiliated to the Sri Lanka Insurance Corporation, but had been invested in the Hambantota Hyatt Regency Hotel project.

Mismanagement of financial resources during the past regime resulted in the hotel which could have been completed for Rs. 18.5 billion.

In addition, Sri Lanka Insurance owned company – Sino Lanka Hotels & Spa (Pvt) Ltd was forced to pay an Italian contractor over Rs. 1,500 million due to a decision taken by former Finance Minister Ravi Karunanayake.

The contract provided by the Italian company was cancelled by Sino Lanka.

The  AInternational Chamber of Commerce Arbitration Report found that Internal Contract Spa had not deviated from the contract requirements and that they had been misled by their contacts representing Sino Lanka.

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