Business Times

Controversy over proposed CCC property deal

By Bandula Sirimanna

The massive Colombo Commercial Company (CCC) property development project located at a prime area in Colombo facing Beira Lake at Sir James Peiris Mawatha has run into a major controversy due to a decision to sell it to a blue chip conglomerate at a price of Rs. 8 billion without calling for public tenders.

A government decision to wrap up the deal is mainly influenced by a powerful government official but on the other hand is being vehemently opposed by other relevant authorities, informed sources said.
The property is owned by the Urban Development Authority (UDA).

The CCC branch office properties at Badulla, Hatton, Kandapola, Kandy and Ratnapura are also owned by the UDA. The state-run Bank of Ceylon (BOC), which was initially involved, is learnt to have decided to withdraw from its involvement in the project following the controversial offer, the sources said.

UDA or BOC officials declined to comment on the issue. At the 11-acre prime land site, the UDA is now in the process of developing infrastructure facilities including the building of a new road which will be connected to the existing one surrounding the CCC property providing easy access to the location.

The demolishing of old buildings has already begun and this contract was awarded to a private firm in a very transparent manner calling for tenders and evaluating bids. The contractor has paid UDA, a sum of Rs.31 million for scrap iron and other building material which will be removed by them, sources added.
An army camp at the site will be shifted to another location making way for infrastructure development of the property.

Janashakthi Insurance PLC office, located at the site, will be relocated to an adjoining property where it plans to build a 30-storeyed building for its headoffice. The CCC property is one of the prime blocks identified under a master plan to make Colombo a modern and vibrant city. The Colombo City master plan is being expedited under the directions of Defence Secretary Gotabaya Rajapaksa, the sources said.

They said the CCC property has been earmarked to build city hotels, trade complexes and malls. The blue chip, in the running to own this property, has extensive commercial land in Colombo including prime area in the city, and outside.

The offer of Rs.8 billion by the conglomerate has been favoured by the Finance Ministry because the government is in a cash crunch, the sources said.

Once a powerful private company, Colombo Commercial Company was taken over by the government, more than three decades ago, under the Business (Acquisition) Act No. 35 of 1971.

WB aid for Colombo development

The World Bank is to extend financial assistance for the implementation of the Colombo city development programme aimed at making Colombo an international business centre and financial hub integrated with tourism and accommodation facilities.

A team of World Bank officials held preliminary discussions with the Urban Development Authority on Friday to make available funding for the project. Major components of the programme include expansion of the Colombo Port, shifting of administrative functions from the city, relocation of industrial and ware housing activities, re-establishment of defense related activities, urban renewal and regeneration of the existing city nodes, new housing for under-served settlements within the city, urban environmental improvement programmes blended with city greenery, high density housing development, improvement of infrastructure service and social infrastructure, road infrastructure and introduction of new modes of transport.

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