Horana tyre factory: Tycoon agrees to pay more

the original deal negotiated for him by the Ministry of Development Strategies.

Among other things, it envisaged granting him a 99-year lease at an annual rent of Rs 10,000 (roughly Rs 100 per acre). The BOI’s prevailing policy is to limit leases to 50 years.

The Cabinet Committee on Economic Management (CCEM) also sanctioned a massive discount on the lease premium; instead of paying the floor rates decided upon by the BOI, he was to have the land at rates calculated by the Government’s Valuation Department.

Work on the site was suspended on President Maithripala Sirisena’s instructions and the agreement was revisited. Among the concerns flagged was that the BOI would incur losses in leasing out the land at a fraction of the agency’s floor price.

But while the new agreed premium is Rs 40 million higher, it does not come close to the rates usually quoted by the BOI for property in the zone. The nominal annual rental also stays the same.

The BOI charges a premium of US$ 40,000 (Rs 6 million) an acre for a 50-year lease of WIZ land. The annual ground rent per acre at WIZ is US$ 3,850 (around Rs 578,000).