Lankan President intervenes to save Altair
Gotabaya Rajapaksa, the President of Sri Lanka, has stepped in to rescue the high-end Altair development project in Colombo which has been steeped in controversy after a bitter slugfest among its Indian partners.
Rajapaksa waded in to jump-start the stalled project by tagging it as a venture of “national importance” and appointing Nimal Perera, a veteran in the urban development field and chairman of Hotel Developers (Lanka) PLC which owns Hilton in Colombo, as a special authorised officer.
The move is expected to jolt the project into life again after a three-year delay, largely the result of a squabble among some of the top realtors of Calcutta — most of them belonging to the South City group — who had conceived it in 2011.
Perera has a clear mandate: complete the residential building, described as a “flagship foreign investment project”, without getting embroiled in the dispute among the promoters. The building is 90 per cent ready but it still requires a cash infusion of $5 million to complete it.
The presidential intervention is aimed at building investor confidence, improving loan recovery for the banks and protecting the interests of hapless homebuyers who have mostly paid for their apartments that were sold at $335, or Rs 25,000 per square foot on an average.
Moreover, local banks have taken a $21.5-million exposure to the project which has been designed by world renowned architect Moshe Safdie, the inspiration behind Singapore’s iconic Marina Bay Sands hotel.
The project has been stalled because of the in-fighting between Jaideep Halwasiya, a businessman from Calcutta, and other shareholders which include Merlin, Emami, Shrachi and the Sureka groups.
Land for the project, which has a unique design featuring a 63-storied tower leaning over a taller 68-storied edifice, was allocated when Rajapaksa was the secretary to the Sri Lankan defence and urban development ministries. Perera at that time was the chairman of the Urban Development Authority.
The project cost now stands at $290 million, significantly higher than the original estimate of $130 million. It will have 400 apartments spread over an area of 8,38,000 sq ft and 38,000 sq ft of retail space.
“This project is one of the flagship foreign investment projects approved under the Strategic Investment Law. Further, Bank of Ceylon, National Savings Bank and National Development Bank have given about $21.5 million to the project company and the balance $4.5 million is yet to be released,” the letter from the presidential secretariat to Perera read. The Telegraph has reviewed the contents of the letter.
Perera told this newspaper over the phone from Colombo that his mandate was to complete the project with the cooperation from all stakeholders. “My job is to protect the interests of the people,” Perera said.
Contractors are being paid their dues and work on the project has since resumed. The apartments are expected to be handed over to the buyers by the year end. Cumulatively, the buyers had paid $170 million as an advance for the project.
The Telegraph had previously reported how promoters of South City had accused Halwasiya of reducing them to the status of minority shareholders in the project development company. Halwasiya, in turn accused them of embezzling funds from the project.
On Thursday, both Halwasiya and Merlin chairman Sushil Mohta welcomed the appointment of Perera. “Our first priority should be handing over to buyers who waited for so long,” Halwasiya said.
“We are engaging with him (Perera) and hopeful of a speedy resolution,” Mohta said.
The ownership disputes are being fought in the Sri Lankan commercial court and in the Supreme Court in Colombo. In India, the shareholders have taken their battle to the National Company Law Appellate Tribunal and the Supreme Court in Delhi.