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Why Hotel Land To Aviation Company?

Jul 9, 2011 3:29:48 PM - thesundayleader.lk

Dr. Harsha de Silva , M.A. Sumanthiran and Navin Dissanayake

The question of prime Colombo land being sold to a Chinese aviation company to build a hotel was an issue raised by a UNP MP at a seminar in Colombo on Tuesday.
“I can understand Shangri La, but why CATIC?” Dr. Harsha de Silva asked at the Ceylon Chamber of Commerce organized Sri Lanka Economic Summit that concluded on Tuesday.
Government has sold land housing the army headquarters in Colombo to Shangri La, a Hong Kong based hotel developer and CATIC, a Chinese company involved in the sale of military and civilian aircraft.
While selling land to Shangri La is apparently justifiable as Sri Lanka needs some top international hotel brands to invest in the island to kick-start the economy, the question raised is why was also such land, ostensibly for the purpose of building another hotel, sold to a company more renowned in the aviation industry rather than in the hotel business?
De Silva said that CATIC, to which some 20 acres have been sold, runs around 10 hotels in China, which however are not on the top star grade.
TNA MP M.A. Sumanthiran another speaker at this seminar said that according to the law of the land, the permission of the provincial council in question has to be first obtained before such sales are effected.
“But in the sale of those lands none of those procedures were followed,” he said.
Sumanthiran said that the reason why investors are reluctant to come was because of the reversal of two privatization cases for not following laid down procedures.
He was referring to the reversal of the sales of state owned Lanka Marine Services and Sri Lanka Insurance Corporation a few years ago by the Supreme Court for not following proper tender procedures.
“In a similar vein, 10 years down the line, when the present Government is out of power, the new Government elected may reverse the CATIC and Shangri La deals,” Sumanthiran said
What the country therefore needs to avoid such scary possibilities is to follow procedures and not be involved in deal making, he said.
There should be zero tolerance on corruption, said Sumanthiran.
De Silva said that according to a study done by Professor A. V. de S Indraratne, in the period 2006/07, corruption ate away 9% of Sri Lanka’s GDP.
The best way to stem corruption is to have an informed public, he said. Here he derided the Government for scuttling the Opposition’s Right to Information Bill.
“When there is an asymmetry of information then there is corruption,” said De Silva.
“If such an Act is in place, even an ordinary villager can question and ask for a breakdown of the costs involved in building a road in his hamlet,” he said.
De Silva quoting Treasury Secretary Dr. P. B. Jayasundera said that when the latter was speaking at this forum the previous day he had said that the challenge was to uplift private sector investment from the current 21.5% of GDP to 26% of GDP
The reasons enunciated aforesaid are the causes as to why this is not happening, he said.
“FDIs are taking place with money borrowed from China at commercial rates, then the Government raises money from elsewhere to pay such loans and the circus goes on,” he said.
Public Management Reforms Minister Navin Dissanayake another speaker at this event said that the UNP Government of 1977 was a pro West Government; hence it was able to borrow from the West.  But the present UPFA Government has been distanced from the West over issues arising from its war against terrorism, as such it was compelled to seek assistance from China, he said.