Another twist in Grand Hyatt saga

Published : 9:52 am  November 17, 2015 | No comments so far |  |  (521) reads | 

 By Chandeepa Wettasinghe

A letter from Public Enterprise Development Minister Kabir Hashim revealed that he intends to change the entire board of directors of the stateowned Grand Hyatt Hotel holding company Canwill Holdings (Pvt.) Ltd (Canwill). “A letter dated November 5, 2015 to Sri Lanka Insurance Corporation (SLIC) said that the minister intends to appoint a new board. Somebody has said that we are the Finance Untitled-3


Minister’s people. We have also been told not to open tenders and we’re awaiting further instructions,” a top Canwill Holdings official confirmed. Neither Minister Hashim nor his Deputy Minister Eran Wickremaratne was available for comment.

Canwill Holdings was transferred to Hashim’s ministry from the Finance Ministry during the Cabinet restructuring in September. Company sources said that Minister Hashim was not happy with the procedures followed by the company in awarding tenders. However, the official said that all tenders since the new management was elected this February have been opened with the approval of the three shareholders of Canwill Holdings—SLIC, which has 45.95 percent of the shares, the Employees’ Provident Fund (EPF), which has 27.03 percent, and Litro Lanka, which has another 27.03 percent.

The current board includes Chairman Hemaka Amarasuriya, who is the Chairman of SLIC, Managing Director D.R.P. A b e y s i n g h e , c o n s t r u c t i o n sector professional Dr. Rohan Karunaratne, an engineer, Litro Gas Chairman S. Munasinghe, Finance Ministry Deputy Director P. Liyanage, EPF Superintendent R.A.A. Jayalath and S.D. Martino representing the private sector. All tenders were published in newspapers and have adhered to the strict guidelines of the national procurement processes, according to the official. Employees of Canwill Holdings told Mirror Business that they have already received proposals for two tenders on interior decorations worth Rs.2 billion, which have been placed on hold for nearly two months, while two other tenders concerning interior decoration and power supply have not been opened.

They said that the idling of construction and not opening the hotel on time as planned in 2017 could cost the public millions of rupees. The employees added that both they and the foreign partners in the project are happy with the environment created by the current board of directors. Hashim has recommended that two individuals from the hotel trade to be appointed as the new Chairman and Managing Director. Employees criticized the appointment of hoteliers, saying that officials of engineering and financial backgrounds are required during the construction phase and said that the past regime too had retained a hospitality staff under the company’s payroll for years during construction, causing losses.

Further, upon completion, management of the hotel will fall under the world famous Hyatt brand. The project was initially estimated to be Rs.18.5 billion but Canwill Holdings employees said that the cost had increased to Rs.31 billion under the past regime amid gross mismanagement, leading to the project being halted.

The official said that an unqualified project manager and inexperienced engineers and accountants were replaced with “the most qualified” Chartered Architect in the country and other qualified personnel, respectively at a fraction of the costs. “The past contractors are still on board and we have negotiated with them to save Rs.400 million from the contracts. We have saved Rs.500 million since February when we appointed the new project manager and engineers,” the official added. Meanwhile, President Maithripala Sirisena during the Cabinet swearing in ceremony in September said that changes to boards of directors and heads of state-owned entities must go through a joint Presidential and Prime Ministerial panel.