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Selendiva-style company to operate Lotus Tower

14 Nov 2021

  • Tower to be transferred from TRCSL to Treasury this month
  • TRCSL says it did not have power to attract investors 
  • Announcement of tower commercialisation after transfer
  By Yakuta Dawood  The Treasury is expected to establish a company named Lotus Tower Company Ltd., akin to Selendiva Investments Ltd. Said company will be established with the purpose of operating and managing one of the symbolic landmarks of Colombo, the Lotus Tower, The Sunday Morning Business learns. The company will be established after the Lotus Tower is vested with the Ministry of Finance, from its current authority, the Telecommunications Regulatory Commission of Sri Lanka (TRCSL), by 30 November this year.  Speaking to us, project Co-ordinating Consultant and Team Leader Prof. Samitha Manawadu stated that the TRCSL will be handing over the Lotus Tower to the Treasury with an aim of commencing the commercialisation aspect of the tower. “The TRCSL was scheduled to hand over the Lotus Tower to the Treasury on 31 October but was delayed due to an issue of the Chinese contractor being sanctioned by the US. However, the tentative date is now set for 30 November, after which the commercialisation of the tower will be announced globally,” Manawadu explained. The Lotus Tower, initiated in 2012, is considered to be the tallest communication tower in South Asia, and measures up to 356 metres in height. The tower was constructed by the contractor China National Electronic Import and Export Corporation (CNEIEC) with a total cost of $ 104.3 million, funded by EXIM Bank of the People’s Republic of China.  In November last year, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned CNEIEC for supporting the illegitimate Maduro regime’s efforts to undermine democracy in Venezuela, meaning it would impact the Sri Lankan economy if operations continue. Therefore, according to sources, it was reported that the TRCSL had suspended a payment amounting to $ 15 million to CNEIEC. Commenting further, Manawadu also mentioned that as of today, the Lotus Tower has not finalised any agreements with interested international or local investors, as TRCSL did not have the power of doing such activities. For this reason, the new company will be established under the Finance Ministry.  “Very soon, an announcement will be made public, with an aim of calling out for quotation and other commercialisation plans of the Lotus Tower,” he added.  The Cabinet last week approved a proposal presented by President Gotabaya Rajapaksa to allocate four acres, three roads, and 24.47 perches in the proximity of the tower project. This is presently owned by the Urban Development Authority (UDA).  The Cabinet press release noted: “It has been recognised that further development activities such as the construction of a modern water park near Beira Lake in the proximity of the tower to attract the attention of local and foreign tourists, and installation of food stalls, construction of offices, accommodation, and infrastructure facilities for the staff expected to be engaged in the service of the tower, further extension of the existing car park etc., close to the tower, have to be carried out for the convenience of the staff relevant to the tower’s operational activities.” In 2012, the Attorney General’s (AG) Department had identified that there were irregularities in the construction of the Lotus Tower. The 2015 Annual Report of the AG highlighted three main points of concern.  The first is that the construction contract was awarded to two Chinese companies whose business areas did not include the construction of multi-transmission towers or even large-scale construction. Secondly, even though the work should have been completed by 12 May 2015, the contract period was extended by two years to October 2017 without Cabinet approval. Finally, the borrowing and insurance cost of the project was grossly understated, by Rs. 265 million and Rs. 682 million, respectively. However, the 2017 Annual Report reiterated these concerns; there was an additional delay of over 200 days as work was not completed even on 31 May 2018, and with the tower being declared open only in September 2019, it was said that the demurrage of $ 10.43 million had not been recovered at the point of publication of the Annual Report. 


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