A Rs. 1.2 billion project to refurbish the Nila Sevana Housing Scheme is being awarded to a local company on the basis of its reported past performance.
No tenders have been called or expressions of interest sought from other parties.
The move comes on the joint recommendation from Development Strategies and International Trade Minister Malik Samarawickrema, and Public Administration and Management Minister Ranjith Maddumabandara.
Making a case for the award of the project to Walkers CML, the two ministers have said, “The Nila Sevana Housing Project is a joint project entered into in 2003 by the Board of Investment of Sri Lanka (BOI), Ministry of Public Administration and Management Reforms (now known as the Ministry of Public Administration and Management) and a private company Wincon Development Ceylon (Private) Limited (now acquired as Walkers CML Properties (Private) Limited).
The Chairman of Walkers CML is Azmil Khalil Bin Dato Khalil, a Malaysian national. Jehan Prasanna Amaratunga is the Group Executive Director and Deputy Chairman whilst Dian Jayasuriya is Managing Director and Chief Executive Officer.
Pointing out that the project was intended to increase the “stock of affordable housing in the country,” the two Ministers have noted that “Selected underutilised crown lands suitable for residential development were identified by the Ministry of Public Administration and Management and vested with the Board of Investment. These lands were then leased (zero value lease basis) to Wincon Development Ceylon (Private) Limited for the said purpose of development.
The pilot projects, it has been pointed out, have been spread over two districts, Galle and Kandy, with the intention to cover all districts over time. In Galle District, 1,088 apartments were built across two sites – 512 apartments in Wakunagoda and 576 in Habaraduwa. “Unfortunately, the initial developers (Wincon) were unable to complete both projects due to funding constraints and matters related to general lack of understanding on local documentation processes and regulations. The project lay idle from approximately mid-2011 to January 2015, the two Ministers have said in their joint memorandum.
This joint memorandum adds: “The 576 apartments in Habaraduwa remain untouched since the completion of the initial work in 2011. The nine buildings across 13 acres remain, to date, in a general state of severe disrepair and are inhabitable without infusion of a minimum of Rs 600 million to bring the complex to a livable condition; it is understood that the market demand from public sector employees alone for the offering at Habaraduwa is insufficient to justify such additional investment.
“It is learnt that the Habaraduwa project was brought over for approximately Rs. 900 million and estimated that the apartment can be sold to buyers for a sum of approximately Rs 1.3 billion, after refurbishment, which makes it financially non-viable for refurbishment, as is, infusing a further sum of Rs. 600 million.”
The two ministers have claimed that “market study shows that there is a lack of affordable accommodation for foreign and local tourists in the Habaraduwa area.” They point out that “most places offering accommodation come in the form of high-end luxury vilas or ad-hoc guest rooms which are mostly homes that are temporarily converted. Hence, the duo wants the Cabinet of Ministers to allow Walkers CML “to develop it as a residential cum tourism project with the infusion of Rs. 1.2 billion.”
Courtesy:Sunday Times