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Sri Lanka eyes Maldivian-style tourism in Kalpitiya 

12 Jun 2022

  • SLTDA Chairman hopes to lease more islands 
  • Leasing period to be 30 years
– By Tanya Shan  Foreign exchange-deprived Sri Lanka is now planning to develop Kalpitiya and surrounding islands with an aim to promote Maldivian-style tourism, according to the Sri Lanka Tourism Development Authority (SLTDA).  Speaking to The Sunday Morning Business, newly-appointed Chairperson of the SLTDA Priantha Fernando stated that there were plans to lease more islands in Kalpitiya in order to achieve this goal, as the Government developing these islands by itself would incur billions of rupees.  “Two or three investors coming to develop these islands would be a good thing, as these islands need to undergo infrastructure development. The Government cannot afford to do this on its own. At the moment, there are 14 islands, but only seven can be developed,” Fernando stated.  He shared that the islands and other potential lands would be made available under 30-year leases and that 4% of the assessed value of the land or island would be charged as a leasing fee from the investor annually.  Highlighting the importance of Foreign Direct Investments (FDIs) for the development of tourism and the country’s economy, Fernando stated that unfortunately, FDIs had not flown into the country as they ideally should have due to the Easter Sunday attacks and the Covid-19 pandemic.  He also expressed concerns over the negative publicity around the leasing of Uchchamunai Island.  Uchchamunai Island was recently leased for a period of 30 years to a foreign investor. Accordingly, the lease rental is based on the value provided by the Department of Government Valuation, as per a valuation that was conducted in October 2020 on which the agreement has been finalised.  The estimated project cost by the investor for a tourism project that will be implemented in stages is $ 417.5 million. The project can only commence when all necessary approvals from the line agencies such as the Department of Coast Conservation and the Central Environmental Authority are obtained. As per the Tourism Act No. 38 of 2005, the SLTDA is mandated to lease out (not sell) SLTDA-owned lands to potential investors to develop and operate tourism hotels and resorts in a planned and sustainable manner. The SLTDA has continued to do so, attracting both foreign and local investments, and has been held answerable to the Committee on Public Enterprises (COPE) for any delays in signing of lease agreements for already-approved projects. The SLTDA said that in July 2019, it had called for potential investors for Uchchamunai island in Kalpitiya through newspaper advertisements in all three languages. Post evaluation and approval by the Project Proposal Evaluation Committee, it had been approved by the SLTDA Board in February 2020, which includes industry stakeholders and Government representatives.   In August 2020, the Minister of Tourism via the Ministry Secretary approved the signing of a lease agreement. Thereafter, the draft agreement for the lease in terms of the technicalities was finalised in October 2020 while the draft agreement was finalised in December 2020. While the agreement was ready to be signed in March 2021, it was delayed due to the pandemic and internal affairs of the investor.    


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