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Government defends decision to divest Hilton and Hyatt Colombo

ITN News Editor
By ITN News Editor October 22, 2018 18:45

Government defends decision to divest Hilton and Hyatt Colombo

The Government has defended the decision to divest Hilton and Hyatt Colombo as they are a burden on the Treasury. The Finance Ministry said that the decision to divest Hilton and Hyatt hotels, which are non-strategic holdings of the Government, was decided by the Cabinet of Ministers and proposed in several budget speeches.
According to the Finance Ministry, Hyatt Hotel, which is partially completed, has so far cost the Employees Provident Fund, Sri Lanka Insurance and Litro gas, all state-owned organizations and accountable to the people, over 15 billion rupees. Furthermore, these same state organizations would have to put more money and give guarantees to banks for a much higher amount to complete the hotel.
Public money especially that of the EPF, should not be spent on building hotels, where the returns on investment can take many years. Therefore, the Hyatt hotel has to be divested to a reputable investor with the financial strength to complete the hotel without this being a burden to the State.
The Finance Ministry also said that the Hilton Hotel, which has been profitable, to reach its full potential and compete with newer hotels, needs to upgrade the hotel rooms, which have not been done for 30 years. The cost of refurbishment is expected to be over four billion rupees.
As a Government owned enterprise, the hotel does not have the financial strength to undertake these new investments and if it does, the Government will have to fund this or expensive loans have to be taken. Therefore, the Finance Ministry said it is justified to divest this hotel to a financially strong investor who can proceed with these new investments and generate more employment opportunities.

ITN News Editor
By ITN News Editor October 22, 2018 18:45