'Do or Die' situation for Krrish

Minister of Investment Promotion Lakshman Yapa Abeywardena said the Indian property developer, Krrish Group, has less than 36 months to complete the whole project, if not the government would cancel the agreement. The BoI agreement was signed on 30 August, 2012 and the MoU was signed with the UDA on 30 July, 2012. According to the minister it's a 'Do or Die' situation for the Indian investor, who has paid nearly Rs 4.4 billion, an estimated 84%, to the Urban Development Authority of the Rs 5 billion lease on the Transwork Tower Land in Colombo Fort.


"The company has informed the UDA that it is not agreeable to pay the Land Lease Tax of 15%, amounting to Rs. 749.25 million, as this regulation was effected after the signing of the Agreement with the UDA. It has requested that the Land Lease Tax be waived," sources said. The UDA issued the land on a 99-year lease to Krrish.


Krrish Transworks Colombo has informed the UDA, that, the balance payment of Rs. 639.5 million, due in respect of the land cost, will be made only after the land lease tax issue is sorted out.
Abeywardena was speechless when the Ceylon Today asked whether the Krrish Group lied to the Minister, on the previous occasions, that the company would pay the balance before the deadlines given to them.


The UDA is in agreement with this proposition, and is in the process of accommodating the KTCPL request. This is expected to be finalized within a period of one month.
Krrish entered Sri Lanka in late 2012 with a US$ 460 million mixed development project, the company was given four acres in Colombo. However, the company had delayed the payment since May 2013, after the initial land matter was resolved.
The company is charged 12% interest on the balance payment to the Urban Development Authority.


The Board of Investment, since last May, granted four extensions to make the balance payment of which the forth extension was with no deadline.


Krrish withheld the balance payment due to a land issue involving the project. The BOI granted the Krrish Transwork Project time till last May 31, to make the balance payment, after the land matter was resolved and the ownership transferred. The company was also granted the second extension up to July 15 and on a request by the company the third had been granted. The fourth extension had been given to the group with no deadline since the company agreed to pay 12% interest for the delay.


The Krrish Group entered Sri Lanka in 2012 to develop a hotel, apartment complexes, shopping and dining areas and many other facilities to support tourism growth. The company has heavily advertised the mixed development project.