Business Times

Kuchchaveli hotel project nosedives – no more promised land

Yet another mega hotel project in muddy waters
By Duruthu Edirimuni Chandrasekera

Looks like the government has a penchant for 'troubling' investors interested in tourism projects. The Business Times learns that this time around the issues are with the Kuchchaveli Tourism (KTZ) Zone in Trincomalee, a stretch of land 8 km-long with an extent of approximately 600 acres, which has been identified for tourism development.

Prospective investors who were promised land in this area have joined forces to battle the unfair treatment meted out to them and more importantly government’s volte-face bureaucracy, according to informed sources.

In October 2009, the Government Agent (GA) Trincomalee had advertised requesting proposals for tourist resort projects for KTZ and 75 investors bid for blocks of land between five to eight acres each out of which 48 were selected.

An informed source said that prospective investors were given land for less than Rs 50,000 per acre for a 30-year lease through this process, but now the state is backtracking on its word. “Nearly two months ago the Sri Lanka Tourist Board (SLTB) sent letters to those who had applied for 8-acre lands that they should pay Rs. 20 million per acre for a 99-year lease,” he said.

He said that the Chairman, Pradesheeya Sabhawa, the GA, etc., had verbally told the investors who were given these lands, to construct buildings. “There are some who have spent nearly Rs. 10 million on the buildings already,” he added. He said they haven't written to those who had applied for 5-acres.
An applicant said that 23 investors (who were written to) held discussions with the SLTB Chairman, a month ago, but nothing came out of it.

“We formed an association early this month called Kuchchaveli Investors Association (KIA) and will be ...
looking for an audience with Treasury Secretary, Dr. P.B. Jayasundere to seek some respite,” he said. He said they will discuss what ‘has to be done’ if this doesn’t bring them some relief.

He said that KIA has 48 members and that some have made trips as many as 45 times during the past year to Trincomalee to get these projects up and running. “Some say that it was an absolute waste of time and we can’t comprehend this change of policies/mind,” he added.

The land earmarked for projects bordering the beach is situated north of the popular Nilaveli beach and the Kuchchaveli resort is planned as a ‘Green Integrated Resort’, focusing on sustainable development. At the time the Urban Development Authority (UDA) had taken the task to identify suitable locations for different categories of tourism facilities, such as hotels, guesthouses, conference facilities, and locations for recreational activities etc. “In addition, they said that the maximum number of rooms per acre will be limited and the footprint of any area to be built up shall not exceed 25% of the land,” an investor told the Business Times. He said that a Conceptual Zoning Plan was prepared for the area by the Sri Lanka Tourism Development Authority with the assistance of the UDA.

A second investor said that while the proposals and the conceptual designs were to be evaluated by the SLTDA, the allocation of land to each project was carried out by the GA and the Land Commissioner.

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