Krrish cleared to go ahead: BOI Chief
6 May 2015 03:40 am
By Chandeepa Wettasinghe
The Krrish Square mixed development project which was halted due to delays in its final payments of Rs.640 million to the government, is now resuming operations.
“That’s in operation. There was some money that was to be in Sri Lanka in the month of March. I believe it would have come already, and they were getting into operations,” Board of Investment Chairman Upul Jayasuriya said.
The government gave the 4-acre land which housed the Transwork House in Fort on a 99-year lease for Rs.5 billion to the local company Krrish Transworks Colombo (Pvt) Ltd, which is a subsidiary of Indian real estate giant Krrish Group.
While most of the payments had been paid on time, the final payments had been delayed by nearly two years, which reports last year said had increased to Rs.800 million due to a 12 percent interest penalty imposed by the government.
Unsubstantiated allegations were also leveled against the company for trying to bribe officials to keep the payment deadlines extended.
While coming under the controversial Strategic Development Projects Act, the project was granted a myriad of concessions by the Board of Investment, including 25 years of tax concession.
Work on Keangnam’s Dawson Grand stops
Meanwhile Jayasuriya said that the 173 luxury apartment Dawson Grand twin tower complex in Colombo 02 which was being developed by Korean construction company Keangnam Enterprises through its subsidiary Keangnam Lanka Private Limited, a BOI company, has halted construction pending legal proceedings in Korea.
Keangnam Enterprises was the centre of a bribery scandal involving Prime Minister Lee Wan-koo and key aides to President Park Geun-hye. Following it coming to light, Keangam’s stocks plummeted and the company was delisted from the bourse.
It is currently awaiting a court order to start canvassing for lines of credit to keep its overseas projects in Algeria, Ethiopia, Vietnam and Sri Lanka afloat, without which it would face liquidation.
Keangnam was also involved with the John Keels Group’s Waterfront Project in syndication with Hyundai Engineering and Construction, which will not be affected by Keangnam’s collapse.
However, company officials had said that they were involved in more international projects than was disclosed to the public, which would also be threatened without a bailout.