Business Times

India’s ITC now finalises deal, Sheraton moves to Kollupitiya

By Sunimalee Dias

The Board of Investment (BOI) signed an agreement with Kolkata-based ITC for a mixed development project opposite the Galle Face Green, while contrary to reports of the five star Sheraton hotel being established at this site, its building is now seen rising in the heart of Kollupitiya -- through a different party.

The international luxury hotel chain Sheraton under the Starwood Group was introduced through Lanka Hotels and Residencies (LHR) on May 4 when both parties signed the agreement in the presence of Treasury Secretary Dr. P.B. Jayasundera with its location set right next to the “Carnival” ice cream parlour at Kollupitiya and opposite the popular Indo-Ceylon Café.

Ironically, the BOI venture with ITC was also signed on the same day - May 4 - when the Indian company representatives committed to make payment of US$73.5 million as the lease premium to the BOI for the 99-year lease. This sum of money was then transferred to the Treasury, an official said.

ITC has not indicated its total investment as it is believed the project cost is expected to vary depending on their surveys, relating to demand and room capacity required, that is expected to take at least six months to complete.

The Sheraton hotel structure.
Pix by M.D. Nissanka

ITC is the Indian Tobacco Company with diversified interests ranging from Cigarettes, Hotels, Paperboards and Specialty Papers, Packaging, Agri-Business, Packaged Foods and Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. Its hotel business comprises over 100 owned and managed properties spread across India that started with its own hotel chain ITC-Welcomgroup Hotel Chola.

However, it was pointed out that the ITC was yet to decide on the five star hotel that would be located on site as part of its mixed development project opposite the Galle Face Green. In this respect, having been provided beach-front space the ITC would commence its operations located specifically between the future Shangri-La hotel and the Taj Samudra in Colombo.

Currently, the organization is said to be engaged in drawing up plans and other project related work.
Interestingly, however, some months back the government repeatedly made public announcements of plans that ITC would be bringing in the Sheraton brand to Sri Lanka, which is now not the case.
The confusion has caused much misinformation but it was not possible to ascertain how this situation arose especially since Lanka Hotels and Residencies have been in talks with the Starwood Group on bringing down the Sheraton brand to Colombo since one-and-a-half years back.

In fact, Lanka Hotels and Residencies (LHR) Chairman Gamini Gunaratne speaking with the Business Times called this a “mistake” noting that he too was aware of these statements made in the press.
LHR has bought property located next to the Carnival that was under construction since 2004. But work on the building on site, previously meant for a luxury apartment complex and then a mixed project, was halted since 2010.

Premier Pacific that made plans initially to establish to a luxury apartment had found a dearth in demand and in this respect went in for a joint venture with an Indian partner to establish a mixed project of luxury apartments and office space.

However, later this was bought by LHR that following the conclusion of its discussions with the Starwood Group commenced demolition work of the 12 floors already completed. The 21-storey building’s main structure would continue to be in place with the construction work already commenced with certain alterations on the existing structure, project consultants told the Business Times.

Architectural Consultants of the project are Lakviru Designs that have been working on this site since 2004; structural work was by Dayananda Associates and foreign consultants W.S. Atkins that co-ordinates with the Sheraton management for the concept design of the project. Main contractors that have been working on this site since 2004 continue to be Tudawe Brothers.

Architect Chinthaka Nikapitiya speaking with the Business Times on site said the Sheraton Hotel would become an iconic building that would uplift the environment and a unique sky-bar overlooking the sea and a swimming pool on the rooftop of the 306-roomed luxury hotel.

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