Legal barrier to Access Tower 3, now car park likely

By Nishel Fernando 
Access Engineering PLC plans to set up an eight-storey car park in the land plot adjoining Access Tower 1 and 2, after discovering the legal barriers to move ahead with the proposed Rs.8 billion Access Tower 3 office building. 

The Cabinet of Ministers in September, last year, approved the proposal to award the bid to lease a 114.56 perch land owned by the Urban Development Authority (UDA) to Access Realties (Pvt.) Ltd, a fully-owned subsidiary of Access Engineering PLC, for little over Rs.1.1 billion, under a 99-year lease, for the development project.

However, the firm has discovered a ruling issued by the Court of Appeal preventing the utilisation of the particular land for
commercial purposes. 

“The court ruling stated that the relevant land plot must be utilised for public purpose. Therefore, we sought clarity from the UDA whether we were in compliance of the court ruling,” Access Engineering PLC Managing Director Christopher Joshua told Mirror Business. 

The UDA has sought the opinion of the Attorney General’s Department to get a clarification on the “public purpose” mentioned in the court ruling. 

Joshua revealed that Access Engineering in the meantime has submitted a proposal to set up a multi-storey car park, instead of the proposed office building, believing it would fall under the “public purpose” category. 

The firm is proposing to set up an eight-storey car park with over 500 parking slots in the land plot, optimising the adjoining office space of Access Tower 1 and 2. 
“We are now having a dialogue with the UDA in respect for this,” he said.

Joshua pointed out that the UDA would also stand to benefit from such a multi-storey car park in the land plot located on Mudalige Mawatha, Union Place, Colombo 2.
However, he noted that the land plot will have to be revalued based on its usage, as it was earlier valued at Rs.1.1 billion for a commercial building on a 99-year lease.
The UDA is likely to lease the land plot for 30 years, if it approves the proposal submitted
by Access Engineering.

Further, the UDA will have to seek the approval of the Cabinet of Ministers again for the development and they may also have to restart the tender process from scratch.  

Sathosa Motors acquires land for Rs.900mn

Meanwhile, Sathosa Motors PLC, a subsidiary of Access Engineering, had recently acquired an 87.5 perch freehold land, at Vauxhall Street, for Rs.900 million.

“We already have a showroom for Isuzu-branded vehicles on the opposite of the acquired land. In the long term, we will look at setting up an Isuzu showroom, head office and other facilities in the acquired land,” Joshua revealed. 

Sathosa Motors is the authorised distributor for Isuzu vehicles in Sri Lanka and the firm has posted Rs.83 million profits after tax for the last financial year. 
Access Engineering has maintained a healthy Rs.35.88 billion order book for 2020-2021 for various construction projects with an evenly spread customer base between private and
public sectors. 

Around half of the order book is dominated by the segment involving buildings, structures and other similar constructions. 

In addition, Access Engineering is also en route to secure its largest construction contract outside Sri Lanka, worth of 14 million euros, to design and construct the substructures for a Spanish-funded steel overpass for vehicles in Nairobi, Kenya. 

Top Spanish engineering firm Centunion S.A., the main contractor for the 23.25 million euro project, has chosen Access Engineering as the sub-contractor to design and construct a substructure of the steel overpass.

Centunion and Access Engineering are currently awaiting the loan agreement to be signed between the governments of Kenya and Spain.