Sri Lanka’s Uchimunai Island owned by Sri Lanka Tourism authorities to be given to sole investor
The Sunday Morning: The Uchimunai Island located in Kalpitiya, owned by Sri Lanka Tourism authorities, is proposed to be handed over to a sole investor – most likely to a foreign country that will develop the island into a tourist attraction in Sri Lanka, The Sunday Morning learns.
A top official source from the Tourism Ministry, who wished to remain anonymous, told The Sunday Morning that the purpose of considering this measure was due to the extensive development required prior to constructing any tourist hotels or major developments in the island.
The official said that the island did not have electricity, water, proper road development, or required infrastructure.
“I visited this island last week. The problem is to develop it – it requires huge investment. Therefore, we want to give this to a big investor. The investor will have to install water distillery machines to collect water from the sea and so on; they will have to bring investment for electricity generators and solar power. Infrastructure is also not in place as it is a small island. We want to give the entire island or part of it to a new sole investor, otherwise it will be very difficult to develop it,” the official explained.
Further, commenting on the hotel investment that was scheduled to be brought into the Uchimunai Island this year, the official said that the initial proposal by a Switzerland-based investor who had expressed interest in investing US$ 420 million was now hanging by a thread due to the present economic situation faced by Sri Lanka.
According to the official, the last confirmation date which was given to investors was 31 January 2022, but there had been no updated verification from the Swiss investors as of yet.
“If they don’t give any kind of verification, we will probably cancel it next week and look for new investors. They did mention that the final word would be given after meeting Prime Minister Mahinda Rajapaksa, but they have not informed us of anything yet. We have to give them a chance so we didn’t cancel it but before the end of February, we want to make a decision,” the official mentioned.
The official said that two investors from India and the United Kingdom were expected to discuss the project if the Swiss investor were to withdraw.
Elaborating on why the Swiss investor was reconsidering, the official emphasised that the present economic crisis – including the dollar problem, uncertainty in the market, trade union protests, etc. – had led to investors being discouraged.
“These are not good for investment; they are thinking twice or thrice before investing in Sri Lanka,” the official added.
Attempts to reach the Urban Development Authority (UDA) and Board of Investment (BOI) to get more information about this plot of land and the project proved futile.
Meanwhile, commenting on the investment climate, the official said that due to the establishment of the Investor Relations Unit (IRU) within the Sri Lanka Tourism Development Authority (SLTDA), Sri Lanka would have a good year in terms of securing new investments.
“It is a one-stop location for investor approvals, proposals, and fulfilling all requirements on behalf of the investor. It’s prepared and published; therefore we think that 2022 will be a good year for attracting investors,” the official said.
As per the authorised information, the recent improvements to the investment approval process have cut down the time taken for project approvals by 40% and further improvements are in the pipeline with an effective facilitation mechanism.
From March 2020 to June 2021, the Government was able to attract over US$ 950 million in investments, which will be dedicated to revitalising the country’s tourism sector.
OSL take:
Sri Lanka’s tourism authorities while engaged in promoting the industry in key foreign source markets, is also looking at further developing the sector with the aim of addressing every need of the discerning traveler. There has been a continuous increase in the number of tourists arriving in the country since Sri Lanka re-opened its borders last year. The country has also received exposure in several key foreign media outlets that have named Sri Lanka as a must visit destination while also slotting it among the Top 10 island destinations. All these positive movements have opened many business/investment opportunities in Sri Lanka’s tourism industry, especially in the leisure and hospitality sectors. Many international hospitality brands have expressed interest in entering Sri Lanka’s tourism market after identifying the business potential in the country. Given the growth momentum in Sri Lanka’s tourism industry, foreign businesses/investors could explore the opportunities in the industry, especially in the leisure and hospitality sectors.
| Article Code : | VBS/AT/04032022/Z_3 |