UDA’s castles-in-the-air projects on hold till after polls: Chairman
A string of Urban Development projects put on hold pending reviews will be further delayed until new investors are found, estimates reviewed and fresh avenues on return on investments are decided upon, said a senior official of the Urban Development Authority (UDA).
UDA Chairman, Ranjith Fernando told the Sunday Times that a team from Singapore will be visiting Sri Lanka next week to plan out the City’s development, separating the commercial area from the residential areas.
He said some of the projects had failed to keep to the objectives of the Authority, and diverged instead into other areas including hotel development.
“Some of the local Councils’ functions too had been taken over by the UDA,” he said.
“What has happened during the past few years has been ‘ribbon development’, where projects developed alongside main roads, which is not Urban Development,” he said.
Mr Fernando cited the Gafoor Guilding which was to be turned into a 60-room city hotel at an estimated cost of Rs 1.7 billion.
He said, after taking over, he found only a three-paged feasibility study on the project, with no proper plan as to how the investment was to be recovered.
An estimated Rs 200 million has already been pumped into the project, with labour from the Navy.
Mr Fernando said that the UDA was not capable of handling projects and were now looking for a private investor who can handle hotel projects. “We cannot waste public funds on such projects,” he added.
The Arcade at Independence Square and the Race Course which was touted as supercomplexes of eateries and shopping outlets, have also run into problems, with some of them having difficulty to make monthly payments.
Rs 800 million of UDA funds had been pumped into each of the projects, but the estimated revenue was not forthcoming, and that the UDA was suffering a loss of Rs 3 million per month due to these projects.
“We have been told that some of them have been forced to take shops paying high rents. We find that people visit the places, not to purchase goods or have meals, but to take photographs including wedding photo-shoots,” he said.
“This was not what was envisaged. The idea should have been to attract the public, while making the lease affordable to the clients,” he said.
The floating market is another project where tenants are unable to find sufficient business.
Rs 500 million had been pumped into the project with plans to further expand it.
“Some of the tenants are complaining they do not have sufficient income. We find that shops have been distributed without proper plans,” he added.
He said that the entire project was under review.
Similarly, ‘weekly fairs’, had been built at costs varying from Rs 60 to Rs 80 million, but return on investment was slow.
Mr Fernando said that the projects had been over estimated.
Mr Fernando said that the housing projects of some 600 houses for public officials, in Borella and Madampitiya, are also under review, as the UDA would incur a heavy loss if the houses were offered at the original price stated, which excluded the land value. He said the houses will be offered at a revalued price.
The twin towers with a hotel and residencies to be put up near Waters Edge, Battaramulla, has also been put on hold.
“We have decided not to get involved in hotel projects. This land will be leased and the funds utilised for other UDA projects,” he added.
He said the proposed hotel project within a mixed develop- ment project at the former Bogambara prisons has also been put on hold. “There has been no plan to develop this place,” he added.
Mr Fernando said that most of these projects will be decided upon after the the next
elections.
“Plans will be drawn up for Colombo, Galle, Kandy and Trincomalee, before the Government ventures on development projects and before going ahead with those put on hold,” Mr Fernando said in conclusion.