Delay in Grand Hyatt project costs Rs.31.8bn to taxpayer

• Govt. estimates Rs.1.8bn as damages and Rs.30bn in cost overruns
• Cabinet of Ministers appoints committee to look into project irregularities  

The delay in completing the construction of Grand Hyatt Hotel project during 2015-2019 period has cost the Sri Lankan taxpayer a whopping Rs.31.8 billion— Rs.1.8 billion in damages and Rs.30 billion in cost overruns. 

To look into the irregularities, which gave rise to this massive cost overrun and damages, the government has decided to appoint a committee to investigate the project progress or the lack of it since 2015. 

Grand Hyatt was a project implemented by Sino Lanka (Pvt) Limited, a subsidiary Sri Lanka Insurance Corporation, Employees’ Provident Fund and Litro Gas Lanka Limited.  Grand Hyatt is a globally acclaimed hospitality brand headquartered in Chicago, Illinois in the United States. They manage properties around the world in key destinations and are known for their superior hospitality and service quality. 

While the hotel was originally scheduled to open doors in the first quarter of 2016, the new director board of Sino Lanka scrapped the agreements entered into with the contractors by the previous Rajapaksa government following the 2015 Presidential election. 

The government claims that the termination of the agreements has no justifiable reason and caused the project cost to double from Rs.30 billion to Rs.60 billion. 

“…..some companies have initiated legal proceedings and it has been decided that Sino Lanka (Pvt.) Ltd shall pay approximately a sum of Rs.1.8 billion as compensation. The current cost of the project, which was originally planned to be completed at an estimated cost of Rs.30 billion, is re-estimated to be around Rs.60 billion,” the Cabinet of Ministers was informed this week.