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Lotus Tower to begin commercialisation 

10 Apr 2022

  • Lotus Tower Company to manage operations
The Treasury-owned company named Lotus Tower Company Ltd. said that it was to officially commence commercial operations at the Lotus Tower after the project is physically handed over to the company’s management by the Government, The Sunday Morning Business learns.  Speaking to The Sunday Morning Business, a senior official from the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) stated that the management of the company was currently in the process of formulating an appropriate framework to commence commercial operations within the next three months. The company was established after the Lotus Tower was vested with the Ministry of Finance, from its current authority, the TRCSL, in February 2022.  Project Co-ordinating Consultant and Team Leader Prof. Samitha Manawadu confirmed to The Sunday Morning Business that they had officially completed their consultation process by February 2022 and had handed over the authority over the project back to the TRCSL.  “The contractor work is substantially completed,” Manawadu said.  The Lotus Tower, initiated in 2012, is considered to be the tallest communication tower in South Asia, and measures up to 356 metres in height. The tower was constructed by the contractor China National Electronic Import and Export Corporation (CNEIEC) with a total cost of $ 104.3 million, funded by Exim Bank of the People’s Republic of China.  In November 2021, the Cabinet approved a proposal presented by President Gotabaya Rajapaksa to allocate four acres, three roads, and 24.47 perches in the proximity of the tower project. This is presently owned by the Urban Development Authority (UDA).  The Cabinet press release noted: “It has been recognised that further development activities such as the construction of a modern water park near Beira Lake in the proximity of the tower to attract the attention of local and foreign tourists, and installation of food stalls, construction of offices, accommodation, and infrastructure facilities for the staff expected to be engaged in the service of the tower, further extension of the existing car park etc., close to the tower, have to be carried out for the convenience of the staff relevant to the tower’s operational activities.” In November 2020, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned CNEIEC for supporting the illegitimate Maduro regime’s efforts to undermine democracy in Venezuela, meaning it would impact the Sri Lankan economy if operations continued. Therefore, according to sources, it was reported that the TRCSL had suspended a payment amounting to $ 15 million to CNEIEC. In 2012, the Attorney General’s (AG) Department had identified that there were irregularities in the construction of the Lotus Tower. The 2015 Annual Report of the AG highlighted three main points of concern.  The first is that the construction contract was awarded to two Chinese companies whose business areas did not include the construction of multi-transmission towers or even large-scale construction.  Secondly, even though the work should have been completed by 12 May 2015, the contract period was extended by two years to October 2017 without Cabinet approval. Finally, the borrowing and insurance cost of the project was grossly understated, by Rs. 265 million and Rs. 682 million, respectively. However, the 2017 Annual Report reiterated these concerns; there was an additional delay of over 200 days as work was not completed even by 31 May 2018, and with the tower being declared open only in September 2019, it was said that the demurrage of $ 10.43 million had not been recovered at the point of publication of the Annual Report.   

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