Responding to the media reports that were circulated about the Uchchamunai Island, the Sri Lanka Tourism Development Authority (SLTDA) stated that the Uchchamunai Island in Kalpitiya has not been sold, as per a statement that was issued last Saturday (14).
The SLTDA statement read: “The Uchchamunai Island in question has not been sold, and a lease agreement was signed for a period of 30 years to a foreign investor in an attempt to drive much-needed foreign direct investments (FDIs).”
Their statement further said that the media reports led to public misinformation elaborating that the SLTDA is expected to gain income by way of lease rental.
Accordingly, the lease rental is based on the value provided by the Department of Government Valuation that was conducted in October 2020 on which the agreement has been finalised.
Thus, the stated $ 417.5 million is the project cost estimated by the investor for a tourism project that will be implemented in stages. The project can only commence when all necessary approvals from the line agencies such as the Coast Conservation Department and Central Environmental Authority are obtained.
The SLTDA statement further read: “As per the Tourism Act No. 38 2005, the SLTDA is mandated to lease out (not sell) SLTDA-owned lands to potential investors to develop and operate tourism hotels and resorts in a planned and sustainable manner. The SLTDA as in the past has continued to do so, attracting both foreign and local investments, and has been held answerable to the Committee on Public Enterprises (COPE) of the Sri Lanka Parliament for any delays in signing of lease agreements for already-approved projects.”
The STDA said that in July 2019, the SLTDA called for potential investors for Uchchamunai Island in Kalpitiya through newspaper advertisements in all three languages. Post evaluation and approval of the Project Proposal Evaluation Committee, it was approved by the Board of SLTDA in February 2020, which includes industry stakeholders and government representatives.
In August 2020, the Minister of Tourism via the Ministry Secretary approved the signing of a lease agreement. Thereafter, the draft agreement for the lease in terms of the technicalities was finalised in October 2020 and the draft agreement was finalised in December 2020. It was ready to be signed in March 2021.
“However, due to the pandemic situation and internal affairs of the investor, the agreement signing was delayed. In April 2022, the Board of Investments of Sri Lanka (BOI) provided the investor with an ultimatum to sign the lease agreement on or before 11 of May 2022, failing which would result in the withdrawal of the application.
“As a result, the investor requested to sign the lease agreement with the SLTDA on 9 or 10 May 2022. However, owing to the unfortunate incidents that occurred on 9 and 10 May 2022 in Sri Lanka and given the BOI’s original request, the SLTDA management arranged the signing of the lease agreement for a 30-year lease as per the land alienation policy on 11 May 2022,” the SLTDA clarified.
Moreover, the SLTDA denied the fact that the SLTDA or the Government of Sri Lanka or any related stakeholder obtained $ 417.5 million as a result of this transaction. The agreement was to lease out land for 30 years with ultimate ownership remaining with the SLTDA.
“For the SLTDA, as reiterated before, the mode of income is by lease rental, where the investor will pay a monthly fixed rental fee for a period of 30 years, which is based on the valuation done by the Government Valuation Department in 2020. The total cost of $ 417.5 million simply represents the total commercial value of the investment made by the said investor,” said the SLTDA while urging the tourism stakeholders and the public of the country not to be misled by false and incorrect information.
Uchchamunai Island leased, not sold, clarifies SLTDA
16 May 2022
Uchchamunai Island leased, not sold, clarifies SLTDA
16 May 2022