ANOTHER ALLEGED SCAM IN CONSTRUCTION OF HYATT, H’TOTA UNEARTHED

Cabinet Spokesman, Dr. Rajitha Senaratne yesterday disclosed that the government had been able to unearth yet another financial scam in the construction of Hyatt Regency in Hambantota, which was launched during the time Mahinda Rajapaksa was President.

Addressing the weekly cabinet news briefing, Minister Senaratne said a sum of Rs.18.5 billion had been invested by Sri Lanka Insurance Corporation, the Employees Provident Fund and Litro Gas Lanka Ltd in the equity of Canwill Holdings (Pvt) Ltd to construct the Grand Hyatt Colombo Hotel through its fully owned subsidiary, Sinolanka Hotels and Spa Pvt. Ltd.

“The construction work on the hotel had commenced in 2012 and during its construction it was decided that another hotel called Hyatt Regency in Hambantota should be put up at a cost of Rs. 4 billion. Although Rs.315 million of that sum had been spent, construction work on the said hotel had not yet commenced. Accordingly, a proposal by Kabir Hashim, Minister of Public Enterprise Development, to use the funds allocated for the Hyatt Regency for the completion of the Grand Hyatt Colombo (GHC) was approved by the Cabinet of Ministers. It had also been decided to investigate instances where money belonging to public enterprises were used to fund commercial ventures which had not received clearance of the government,” Minister Senaratne added.

In 2014 the Board of Directors of Canwill in which Gamini Senaratne, Chief of Staff of former President Mahinda Rajapaksa was a member, had made a decision to use a part of the money invested in Canwill to build another hotel, the Hyatt Regency in Hambantota, by investing Rs.4 billion under the name of another fully owned subsidiary, Helanco Hotel & Spa (Pvt) Ltd (HHS).

HHS had proceeded with the construction of the hotel in Hambantota and had spent Rs.315 million on capital works and administration of the hotel.

The present Board of Directors took a decision in August 2015, not to proceed with the construction of the Hyatt Regency Hotel in Hambantota, as the shareholders of Canwill were no longer willing to invest money into the venture. Moreover, they were guided by the fact that the completion of GHC project was more important and that these funds had been diverted illogically for a different purpose. They were also of the view that these resources should be invested in the project that received approval from the Cabinet of Ministers in 2012.