Settlement of Shipping Corp. debts to BOC part of deal
Equity for government in exchange for prime city site

Singapore’s giant Shing Kwan Group has together with the Bank of Ceylon won the right to develop what is commonly perceived as Colombo’s most valuable unutilised real estate extending over 14 acres on Havelock Road at Wellawatte.

The Wellawatte Spinning and Weaving Mills site, which has been idle for over a decade since what was once the city’s biggest industry was closed down, has at last been awarded a US$ 150 million integrated development project covering both residential and commercial use.

Asked how the government will be paid for this veritable treasure trove of prime Colombo real estate, Treasury Secretary Charita Ratwatte said: "It will be by way of equity in the project."

Ratwatte also disclosed that the deal also involved the pay-off of the Shipping Corporation’s debts to the Bank of Ceylon which is partnering Singapore property tycoon S. P. Tao’s Shing Kwan Group in developing the sprawling Wellawatte site.

"We have to pay-off that debt," Ratwatte said. 75% of the new development will comprise a modern middle and high income housing complex while the rest will include shopping, commercial and entertainment facilities.

Tao’s previous entry into Sri Lanka’s property market was via the World Trade Centre in Echelon Square built by Overseas Realty Ltd., a company quoted on the Colombo Stock Exchange.

This company remains deeply distressed due to the many blows it took including the shockwaves of the 1983 riots and the LTTE’s terrorist attack on Colombo’s tallest building via the Hotel Galadari car park.