Sheraton to enter Sri Lanka with $ 300 m investment

Friday, 2 December 2011 00:00 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

Global hotel giant Sheraton has received Cabinet approval to invest US$ 300 million in Sri Lanka, on a venture that will stand on land made famous in the China National Technical Import and Export Corporation (CATIC) deal.

ITC Limited of India is a franchise holder of Sheraton Group of USA and the market leader in cigarettes in the subcontinent has bagged the deal.

According to Cabinet Spokesman and Media Minister Keheliya Rambukwella ITC Limited has been given approval to build a hotel and mixed development in Colombo with an investment of US$ 300 million.

The Government has agreed to hand over five acres of prime land on a 99-year lease along the coastline of capital Colombo, Rambukwella said.

Incidentally this area was earlier bid for by CATIC but the deal was embroiled in a political quagmire after the opposition accused the Government of not being transparent. However, despite political mudslinging with allegations by Economic Development Deputy Minister Lakshman Yapa Abeywardene that the opposition was against foreign investment, it seems that the Government did not have to wait long to get an offer.

“The Chinese company had paid the Government an advance of US$ 54.4 million, which the Finance Ministry will refund,” Rambukwella added. The cabinet paper confirmed this, stating that the Treasury would be informed to act on the decision “in due course”.

Hong Kong-based Shangri-La Asia Limited purchased six acres of land next to the proposed Sheraton site earlier this year to set up a 700 room luxury hotel at a cost of US$ 300 million to be opened in 2014.

Sri Lanka’s tourism market is the fastest growing in Asia with arrivals hitting an all-time high of 750,000 this year after the end of a three-decade war in 2009. The country hopes to attract 2.5 million tourists by 2016.