Packer’s Crown pulls plug on $ 400 m Lanka casino plan after Colombo scraps tax concessions

Saturday, 31 January 2015 00:38 - - {{hitsCtrl.values.hits}}

James Packer’s Crown Group says it will not go ahead with a proposed plan to develop a $400 million luxury hotel and resort in Sri Lanka, following a decision by the government in Colombo to scrap tax concessions for the project. On Thursday Sri Lanka’s new Government decided to cancel generous tax concessions for three foreign resort developments – including Packer’s resort – and said it would not issue them licenses to run casinos. A spokeswoman from Crown said the company respected the decision and on that basis the project would not be going ahead.

The concessions were given under the former government of Mahinda Rajapaksa but critics in Sri Lanka opposed the move to give tax breaks to foreign gaming ventures. Speaking to politicians, Prime Minister Ranil Wickremesinghe said the Government would withdraw the tax breaks for the developments with immediate effect. “We will not allow casinos on their premises,” he said. The previous Government had offered the concessions in an effort to turn the Sri Lankan capital into a regional gaming hub. The Opposition, Sri Lanka’s influential Buddhist leaders and some members of Rajapaksa’s Government criticised the move. Rajapaksa lost office last month. His regime had been accused of becoming authoritarian and corrupt. The new coalition Government, which includes defectors from Rajapaksa’s administration, has announced a 100-day constitutional reform agenda which includes measures to increase transparency and end corruption. (ABC/AFP)

JKH believes Waterfront will be viable despite lack of casino

In response to the new interim Government’s decision to ban casinos in integrated mixed development projects, John Keells Holdings expressed confidence that the Waterfront project would still remain viable, given other attractions and offerings. Prime Minister Ranil Wickremesinghe making a special statement in Parliament on Thursday said that the agreements entered into with Waterfront Properties Ltd., under the Strategic Development Projects Act will be amended to restrict the ability to rent space for gaming activities. JKH said yesterday it would engage with the Government in this regard. “Whilst the proposed amendment will constrain the ability to command premium rentals on this component of the project, the multi-faceted nature of this development gives your Board the confidence that the project will still be viable given its diverse portfolio of revenue streams and iconic design which, we believe, will transform the landscape of Colombo,” JKH Chairman Susantha Ratnayake said in his review accompanying third quarter results released yesterday. “As such, the project will continue as planned. The overall brand architecture for the ‘Waterfront Project’ has now been finalised with the project being branded as ‘Cinnamon Life’ and demand for both the residential and commercial spaces continues to remain encouraging,” Ratnayake added.