Construction of Citrus Kalpitiya delayed

Kalpitiya Beach Resort PLC has disclosed that its construction has been held back due to delay in planned infrastructure development in the area.
This was in spite of the company having obtained the necessary approvals and clearances from the Sri Lanka Tourism Development Authority, the Pradeshiya Sabha, and the development permit from the Coast Conservation Department, Central Environmental Authority, Land Reform Commission, Irrigation Department and Ceylon Electricity Board.
In a filing to the CSE, the company said that funds raised through the IPO were utilised to construct a 150-room, four-star hotel and 50 exclusive villas.
Subsequent thereto, the management decided on a range of different models and sizes of villas, thereby reducing the maximum number of villas to 32 which however would not impact its profitability.
The company said that 35 acres of leasehold and 43 acres of freehold land were purchased and developed in 2010 anticipating the commencement of the Government’s proposed Kalpitiya development initiative. “The relevant infrastructure such as roads, highways, pipe-borne water etc were to also be developed as Kalpitiya was to be promoted as a new tourism zone,” the company said.
“Since there has been a delay in promoting this destination by the Government, the company has held back its plans and is awaiting an appropriate time to commence construction of the hotel and the villas,” Kalpitiya Beach Resort PLC said in the filing to the CSE.
The Kalpitiya IPO in late 2011 was to raise Rs. 283 million with an issue price of Rs. 17.50 per share.