SOERU corrects misinformation over sale of Hilton Colombo owner Hotel Developers

With respect to the divestitures of Hotel Developers Lanka Ltd.’s recent television and social media content claims, the SOE Restructuring Unit (SOERU) has issued the following statement:

1. The divestiture of Hotel Developers Lanka Ltd. (HDL, the owning company of the Colombo Hilton) will include seven acres of land: This is incorrect. The land involved in the transaction amounts to 4.61 acres and is available for use by HDL on a leasehold basis (not freehold) until 2111. Subject to approval by the Cabinet of Ministers, a further 1.875 acres of land will be made available to HDL on a lease basis (not freehold) until 2111 at a price of Rs 4.4 billion (in addition to the price for HDL). Two of the hotel’s restaurants, its swimming pool, gymnasium, and some of its parking is situated on this second block of land. The transaction for the second block of land is based on a decision of the Cabinet of Ministers dated 21 March 2022, whereby it was decided to allocate this land at this price to HDL at the time of its divestiture.

2. Since its recent refurbishment, the Colombo Hilton has received a seven-star classification: This is incorrect. The hotel’s classification has been and remains five-star.

3. In 2023, the Government Chief Valuer (GCV) has valued HDL at $ 124 million, a value higher than its valuation released in July 2024: This is incorrect.

A. There was no valuation done in 2023.

B. As confirmed by the GCV, the previous valuation of HDL was dated 19 November 2020.

C. The 2024 valuation is higher than the valuation of 2020.

D. Both valuations as at 2020 and 2024 were stated in Sri Lanka Rupees and not in USD.

4. The financial offer for HDL has been accepted: This is incorrect. Whilst an offer has been received, negotiations are not yet concluded and the price not yet finalised.

5. There was political interference brought to bear on the divestiture of HDL: This is incorrect. A transparent price discovery process has been followed with respect to the divestiture of HDL. Further, at no stage has a politician and/or public officer attempted to influence or interfere with the work of the SOERU with respect to the divestiture of HDL or any other State-owned enterprise.

The SOERU further states that:

1. A few weeks back, the same comments were published in the press and were seen on social media. At that time, the SOERU issued the above clarifications which received wide publicity, which have nevertheless re-appeared once again. As in the previous occasion, no attempt was made to contact the SOERU and seek clarification prior to these comments being aired.

2. Offers and bids received on account of divestitures are evaluated by two Cabinet-appointed committees. These two committees – the Special Project Committee (SPC) and the Special Cabinet Appointed Negotiation Committee (SpCANC) – are independent of each other and also of the SOERU. The SOERU acts as an implementing agency and facilitates and coordinates the work of the two committees. This segregation of responsibilities, together with other features of the Divestiture Guidelines, ensures the transparency and credibility of the divestiture process. The mandates and composition of the two committees and the SOERU are detailed in the Divestiture Guidelines (available at treasury.gov.lk/web/circular-gazette-acts/section/guidelines). A study of these guidelines will reveal that there are sufficient checks and balances to ensure a transparent and credible process.

3. At every important stage of the divestiture process, the SOERU has released statements to the press in order to keep the public informed.

4. The SOERU remains committed and available to clarify any issues and concerns with respect to the SOE reform program – including divestitures – being carried out at present.