Making the Lotus Tower viable

It was reported this week that the Colombo Lotus Tower is to receive a sizable investment. The management company in charge of the highly controversial project is said to receive $ 1.4 million a year as part of an agreement to hire out a section of the tower to a Singapore-based company for a casino and entertainment area. 

The Lotus Tower at present is owned by the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) but managed by the Lotus Tower Management Company Ltd. (LTMC) under the Treasury. Under the terms of the 10-year agreement the investing company is to begin operations from April 2023. If done with transparency such an investment is welcome and would ease the burden of this white elephant which now dominates the Colombo skyline. While this investment will not even come close to recovering the colossal cost incurred in constructing the tower, such investments would at least provide operational viability to what can only be called a vanity project of the Mahinda Rajapaksa government surrounded in wastage and corruption.

The 350-metre tower, supposedly Asia’s tallest, was built at a cost of $ 113 million and a further $ 56 million is estimated to be required for the interest payment for the loan obtained for construction. 80% of the construction cost was funded by a loan from the Exim Bank of China with the TRCSL infusing $ 21.9 million into the project. The construction was commissioned to the China National Electronics Import and Export Corporation and the Aerospace Long-March International Trading Corporation Ltd. through a tri-party agreement signed in January 2012. At the time of construction there was no feasibility study done nor was an assessment done.

In 2015, after the Yahapalana Government came into power, then Shipping and Aviation Minister Arjuna Ranatunga claimed that the land on which the Lotus Tower was built is owned by the Sri Lanka Ports Authority and it has not been properly acquired by the TRCSL. That same year, some Indian analysts raised concerns that the tower could be used as an electronic surveillance facility having national security implications for Southern India.

After many years of construction and delays, it opened this year to the public. At a previous ‘opening ceremony’ in 2019 then President Maithripala Sirisena said one of the firms contracted to work on the project had disappeared with $ 11 million of State funds. Sirisena claimed that in 2012, during the tenure of President Mahinda Rajapaksa, the State-run Telecommunication Regulatory Commission of Sri Lanka had deposited Rs. 2 billion ($ 11.09 million) with a foreign firm chosen as one of the main contractors. He went on to say that on his instructions the Sri Lankan ambassador to that country visited the address to which the company was registered to find there was no such company.

The Lotus Tower is a monument that consistently reminds Sri Lankans of hubris of its leaders, endemic corruption, and impunity for economic crimes. Despite president Sirisena’s controversial statement regarding massive corruption, to date he nor successive governments have held anyone accountable for the alleged crime. The police, the Attorney General’s Department, the Commission to Investigate Allegations of Bribery and Corruption or any other judicial or administrative entity have not taken upon themselves to initiate an investigation into claims made by the former Head of State.