"Kandalama, Club Rannhali my indelible moments"

* How HNB loaned US$ 5.5 million overnight to Aiken Spence for pioneering Maldivian project with Letter of Comfort handwritten on a single A 4 sheet!

* Former Group Chairman of Aitken Spence PLC Prema Cooray reminisces


It was the circumstances that the five star Kandalama Hotel and Club Rannhali were built, commissioned and operated that left an indelible impression in retired Aitken Spence Group Chairman Prema Cooray, winner of the Tourism Legend Award at the recent National Tourism Awards.

Kandalama – the preamble

The Rolls Royce engine of the privately chartered Bell 212 Jet Ranger helicopter, flying three private sector tourism industry idols and a professional luminary, was droning at 350 Revolutions Per Minute on a resplendent day in  April 1992.  

The rotor blades and the tail rotor also swirled simultaneously with the same vibration and momentum, giving the aircraft maximum power to cruise and glide at an altitude of 5000 feet aloft the Dambulla Rock Fortress and Kandalama Tank.

The mission was to determine an idyllic, eco-friendly location for a tourism complex. The passengers on board were the late Aitken Group Chairman Ratna Sivaratnam, (then Main Board Director overlooking the tourism sector of the Group) his Travels Managing Director/CEO Manil De Mel ( now in Australia) and his Hotels Managing Director/ CEO Prema Cooray.  The professional luminary was globally acclaimed architect- the late Deshamanaya Geoffrey Bawa.

"Aitken Spence was upbeat on a five star in  Dambulla, as entrepot to the Cultural Triangle and  with competitor John Keells Holdings having Habarana Lodge and Habarana Village hotels. We had to match the competition head on," Prema remarked.

The quartet was enchanted by the variegation of what caught the eye.  Fleeting glimpses of luscious vegetation, paddy fields, palm fringed banks, lakes, waterways, fortified by jungle thickets and shrub jungle.   Suddenly, Bawa beckoned his attention to the trio, pointing to a rocky formation claiming: "That is the best place to build".

"No easy excursion.  No road access and we had to walk through shrub jungle and rocky formations, Prema said, adding that he oft shuddered how even a house could be built there, leave alone a hotel, and a five star at that!

There were no environmental clearance for the project. Problems started with the Government approvals. The  Chief Prelate of the Dambulla Raja Maha Viharaya, Ven. Inaamaluwe Thera dubbed "Lord" of the area as nothing goes through without his blessings, was visibly hurt that we did not consult him. He vowed to commit suicide if the hotel saw the light of day,  "It was more negligence than intent," he quipped.       

Of the principal allegations were, the hotel was to  consume all water, depriving  farmers their rightful share while upsetting the social fabric of the area, the village, temple and lake.  

The project went to Court.  The presiding Judge was no less that subsequent Chief Justice Sarath Nanda Silva. The Court decided that Spence would face a public inquiry due to its sensitivity. Aitken Spence was told that it was proceeding at its own risk.        

The Vauxhall Street blue chip came out on top after the completion of the public inquiry.  All allegations were countered with scientific data. Kandalama was approved while half complete.  

Global benchmarks and accolades

Among initial benchmarks of the 160- roomed hotel was beating   Hilton Colombo for international cuisine and later being adjudged by UK’s Saga Holidays as the best property in the world for international cuisine among 1200 hotels worldwide.

The staff was trained by the Swedish hotel operators who supplied equipment and training for the 1972 Munich Olympics. So, we put in best available inputs, Prema said with conspicuous pride  

Then Kandalama, once bandied as the country’s worst environmental disaster, was winning accolade after accolade.  It was the first Sri Lankan five stars to clinch the Green Globe certification, the first hotel in the world to win the US Green Building Award and the PATA Gold Medal for the Best Eco Park.  

Besides Sivaratnam, Prema was also the first employee of Aitken Spence Travels and Hotels, joining the day it was formed.  Aitken Spence Travels, with an initial share capital of Rs. 300,000 grew dramatically in three years from an initial Rs. 5 million to Rs. 100 million, largely attributable to the TUI Agency got from Browns, Jet Tours and Scan Tours. Sri Lanka, then, hit the 400,000 arrivals mark with Aitken Spence contributing 15%, single handedly.

Career change

Mulling a career change and simultaneously lured by an irresistible offer by Ernst and Young batch mate, former Sri Lanka opening batsman Mitra Wettimuny, Prema joined Stafford Motors as its Group General Manager in 1980. An economic boom resulting in marketing 35,000 Honda bikes monthly.  "It was then that I graduated from the motor bike at Spence to the chauffer driven car," he mused.     

Realising marketing motor cycles was not his psyche, he ventured with the Dolphin Hotel for the Stafford Group.  Not inhibited by the usual drawbacks of lack of infrastructure and resource personnel, Prema also drew a syndicated loan of Rs. 32 million from DFCC Bank/ NDB Bank and also further Rs. 10 million, off an IPO amid a depressed market.

Post 1983 communal riots made hotel marketing arduous. He bitterly complained to Sivaratnam at the ITB Fair at Berlin, also Prema’s first.  But, Prema successfully got top operators- TUI and Kuoni, making 55 of the 84 rooms booked at Dolphin.

Prema also successfully negotiated with India’s giant Welcome Group, franchisees of the Sheraton chain and also the hotel arm of Indian Tobacco Co. PLC.  Dolphin got the Welcome Group to manage it and profits soared, Prema reminisced.              


Another tryst with destiny.  Not severed connections with Spence,, especially Sivaratnam, he  was told that the General Manager of Aitken Spence Hotel Managements Chandrajith had left.  When Sivaratnam told Prema that he was the obvious choice, Prema said that he had just negotiated with Wings of London. Sivaratnam quipped in a flash: " Prema, you might have to do that job here!!" Prema reflected what the allusion was.  What Sivaratnam had not told him was that he too had negotiated with Wings!!                

Prema rejoined Spence as General Manager Hotels was successful in negotiating management contracts with Kosgoda Beach Resort, Browns Beach and Bandarawela Hotel during which the industry had dipped to the lowest ebb in the mid 1980s.    

Maldives: Rannhali – the trendsetter 

If Prema and the team did the impossible with Kandalama, then it was Club Rannhali in the Maldives, the trendsetter. The first Sri Lankan hotel in the Maldives and the first of the three Spence hotels there with Bathaala Resort followed by Meedhipaaru. The entry into Maldives was most daunting as Sivaratnam discovered from the 1970s with the prohibitive  tax regime of the  Abdul Gayoom Government.  But an informal chat with a Maldivian friend  Husni Mohamed  who advised on the manner in which Maldivians do business over a cup of coffee, Prema made the initial breakthrough.

Prema had an arduous time, balancing Kandalama, Club Rannhali and his studies for his Colombo University Masters Degree in Business Administration. I don’t know how I did it but Kandalama and the MBA were over by 1994, he said.

The next challenge was finding US$ 8 million for Club Rannhali.   With a weak Aitken Spence Hotels Balance Sheet, then, a mere Rs. 65 million profit, barely a million dollars then, the Bank of Ceylon virtually refused with exorbitant interest rates. Then the next he had to turn to was then Hatton National Bank Managing Director/ CEO Rienzie T. Wijetilleke, his close friend when he started at Aitken Spence Travels on its first day, as Head of Finance.           

Rienzie had initially insisted Prema on a Corporate Guarantee, only to be told by Sivaratnam that the Spence Main Board had intoned the impossibility of a mortgage. The then Spence Hotels Balance Sheet was more fragile than a cut glass ashtray! Times were despondent.  Tourism was rock bottom.

Repeated negotiations based on Prema’s ethos  that  just as much as bankers help corporates, it was apt when even in the vice versa,  Prema walks into Rienzie’s office at spells out : " I have a fine opportunity  for you in the Maldives"  Rienzie bawled: ,  please cut the frills out.  Tell me what you want! 

Rienzie foresaw opportunities both for HNB and Aitken Spence. He impulsively wanted a Letter of Comfort, not even legally binding.  The project got off, symbolic of the adage that the private sector operates on patronage.  The loan was disbursed and project commenced. Profits soared enabling Spence to mitigate losses of the Group’s local hotels.  "There would not have been Spence Hotels in the Maldives without Rienzie, Prema reflected.

Rienzie later told Prema: "I do not know how you pulled it off.  Nobody would have given you that under normal circumstances.                

The trio of Prema, Rienzie and business magnate Harry Jayawardena met at a later cocktails cum dinner party. Harry, widely acknowledged for his meticulous precision on numbers and whose listed Distilleries later acquired both HNB and Spence, might have been swathed in perspiration in his lounge attire when Prema, sporting a mischievous smile, looked in Harry’s eye while holding his whisky tumbler in his left hand, while simultaneously nudging Rienzie with his right, said: "Sir, this is the man who loaned me US$ 5.5 million on a platter for Rannhali, based on a letter, virtually scribbled on a single A-4 Sheet!

Prema started life, articled at Ernst and Young. Two batch mates also emerged as Chairmen of listed blue chips. While Prema was Chairman Aitken Spence, the others were: Hemaka Amarasuriya   (Singer Group)   and A.A.  (pet named Baba) Page, (Ceylon Theatres Group). 

Rich family traditions

Born to a family steeped in rich Catholic tradition, he was named Emelianus, a Saint. Prema was normal. Alphonse, a Spanish name, had a reason behind a mushy family tradition. His father was also Alphonse, being the third son of his family. Prema being the third son of his family was also named as Alphonse.

However, the richest aspect of the family saga was when Prema  named his third son, a Doctor, after  doctor- and- banker sons,  also as Alphonse, making the grandson/ the third son in three consecutive generations to bear the same forename. A veritable rarity indeed!

animated gif
Processing Request
Please Wait...