JKH ups integrated resort investment by US $ 200mn
12 July 2013 03:37 am
JKH Chairman/CEO Susantha Ratnayake (Right) appears to be stressing a point to Minister Lakshman Yapa Abeywardena moments prior to the signing of the official agreements
Premier blue chip John Keells Holdings PLC (JKH) has indicated to the Board of Investment (BoI) that the firm would increase its investment in the proposed integrated resort project in Glennie Street, by another US $ 200 million, bringing the total value of the project to US $ 850 million, according to Investment Promotion Minister, Lakshman Yapa Abeywardena.
Nevertheless, the agreement was signed only for the initially announced US $ 650 million, at a media briefing held at the BoI yesterday. However, now eyebrows are being raised as to how the conglomerate could raise the investment of such a strategically significant project by as much as US $ 200 million overnight as its official announcement to the Colombo Stock Exchange (CSE) the day before stated only “over US $ 650 million”.
“This is the biggest investment so far signed by the BoI this year and we are happy to say that we could approve the project within a matter of t wo months since we have received the application from JKH,” said Minister Abeywardena.
The company has also informed the Ministry that the integrated resort project which is expected to be completed in 5 years will be followed by a second stage of which details are not yet available.
The integrated resort will consist of 500 hotel rooms, apartment complex, restaurants, commercial space and office space. The project is expected to generate as much as 3,000 direct employment opportunities.
According to Minister Abeywardena, the project will enjoy tax concessions for the next 10 years under the Strategic Development Act, similar to the tax concessions offered for James Packer’s proposed US $ 350 million resort and casino in D.R. Wijewardena Mawatha.
Responding to queries on why massive tax concessions are offered to operate casinos, Minister Abeywardena denied any tax concessions to operate casinos.
“This is not a casino, nor was James Packer’s. These are mixed development projects. We have not extended any tax concessions to operate casinos. But if they operate casinos through already issued licenses, we cannot do anything,” he pointed out.
Any approved project by the BoI which has an initial investment of US $ 200 million or above will enjoy tax concessions under the Strategic Development Act.
“If we do not offer these tax concessions, how can we attract foreign investments? We have a target to achieve US $ 2.0 billion worth Foreign Direct Investments this year. On the other hand, without these facilities, how can we achieve the tourist arrival target of 2.5 million set for 2015? Investors as well as tourists have so many better alternatives in Thailand, Malaysia and Singapore,” the Minister said.