How Undervalued Is The New Hyatt?
Image of the abandoned Ceylinco Celestial Residencies under construction Hyatt via Skyscraper City
The Sunday Times was full of stories about government business dodginess. The most disturbing was a story about the new Hyatt. “Construction on the Government-backed Hyatt Regency Hotel project was officially launched on Thursday with much fanfare, amidst allegations that the former Ceylinco property had been sold for a song – Rs 4.2 billion against an official valuation of Rs 9.2 billion and a pending offer of Rs 7.8 billion!” (Sunday Times).
For some backstory, this ‘new’ Hyatt is actually the old Ceylinco Celestial Residencies, that forever under construction building on Galle Road. When that company collapsed people who’d pre-ordered apartments were left in the lurch and the government took the land under the highly controversial Underperforming Enterprises and Underutilized Assets Act. That act allowed them to take over private property under some sorta vague conditions. The government has historically publicized [sic] a variety of companies and assets and it seemed obvious that this act would include the failed Ceylinco tower.
This was all done dubiously, but some of the stuff really was rotting and if the government can make things better, so be it. But what intrepid reporter Bandula Sirimanna has found is dubious in the execution.
In the Supreme Court on the same day (Thursday) it was disclosed that a sale offer of US$ 60 million (Rs 7.8 billion) had been received for this property and that this amount was sufficient to repay depositors of the failed Ceylinco Shriram which owned the property.
Despite this offer on the table, the land was sold for around 50% less. So I’m not even sure if the depositors even get paid out properly. Perhaps there’s reasons, but it doesn’t look right at all. You may remember Sirimanna from his breaking of the dubious hotel across from Galle Face Green story. In that case there was a public outcry and the deal got reshuffled. In this case the deal has already gone through. But it don’t look right.
Mohsin Hamid, author of How To Get Filthy Rich In Rising Asia, has a nice 
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I don’t really care about the nitty gritty to be honest – just want it to be built. A Hyatt hotel in Colombo would be great along with Shangri La and Movenpick which are also coming up.
Luckily for them.
The only person who cares enough to do anything about these things is that guy Nihal Sri Amaraekera.
Look at it this way – as a result of this deal, Colombo is getting a world class hotel. If not, this building would just be sitting there rotting and crumbling, besides being an eyesore.
But there was a better offer
Doesn’t matter. If it wasn’t for the Underperforming Enterprises and Underutilized Assets Act (which everybody was complaining about) this wouldn’t have even materialized at all. I bet the people who are complaining about this now won’t even think twice about it when they are wining and dining at the Hyatt once it is built.
Great so Sri Lanka gets world class stuff for whom? I can’t afford some of the sub-standard shitty stuff that’s already available in this country. Ever been to an African country where only a handful of people can afford the luxurious life…yeah that’s where we’re heading.
Ah tastyjujubes, the typical ‘patriot.’ If you’re land or possessions were taken by Namal and his cronies, would you be singing a different tune? I bet, just like the majority of the brave ‘patriots’ in this blessed isle, that in that case you would be all talk.
P.S. Most of the depositers who got fucked by Kotalewala won’t be dining at the Hyatt anytime soon.
Dinuka if you can’t afford it, there’s not much I can do about it, sorry. Get a better paying job maybe?
Ah realist, so eager to place labels on others eh? Mihin = waste of money. Taking over a rotting building and turning into a branded hotel like is being done here, is in my opinion, a good thing. If I’m not mistaken the building belonged to the biggest swindlers in Sri Lanka’s history – consider it the price they have to pay for swindling people out of their money. They took other people’s assets and now they’re having their assets taken away from them. According to the article, “this amount was sufficient to repay depositors” – so what exactly is your problem?
The problem is the lack of tranparency. If the story is true the country has lost over Rs. 3 bn. which it can ill afford, you know this very well.
Given that this was a private property, the country (read government) has actually made money by selling it – whatever the cost. If not for the Underperforming Enterprises and Underutilized Assets Act we wouldn’t be even reading about this but be content to drive past a rotting building in Colombo (now that wouldn’t be money wasted would it?).
Wouldn’t the courts have recommended similar action then to compensate the company’s creditors?
I’m not familiar with the details, but wasn’t it becaue the government felt responsible enough for the plight of the depositors that they took over the whole business?
Anyway, if the government decided to take over the assets under whatever act or procedure (there are many ways the govt. can aquire property), it’s their duty to dispose of it in the most favourable manner, since it then belongs to the country and it’ not their private property to do as they please.
You may not care, but some of us do.
Shammi, how long has the building been standing there idling? Well let me tell you it’s been standing there doing nothing there since 2009. Was anything done about it for the last three years? The answer is no. Why weren’t you complaining about it then if you were truly interested in the country or the company’s creditors? Hmmm? Let’s be truthful, you and many of the others (who I’ll grant may be well meaning) who are griping about this didn’t and don’t really give two hoots about either the land, the building or any of the people who invested money in this failed venture. From the article it appears as if enough money has been made to repay the depositors. So I guess they are actually going to get their money back now – instead of not having their money repaid, and the rest of the country having a collapsing edifice in downtown Colombo. I think the government has done pretty much everyone a favour by taking over the building and getting a Hyatt Hotel built in place.
It’s not the individual’s reponsibility. There are mechanisms in place to do that. That’ what we appoint governments for. I definitely care if these mechanisms are not properly functioning or if fellow citizens are being unfairly treated.
No one is complaining that the deal took place, only that the deal doesn’t appear to be all aboveboard and clean.
Well this has been done through the “mechanisms that are in place” including the Underperforming Enterprises and Underutilized Assets Act (which many where complaining about). Are you just arguing that it should have been sold for more money? And where exactly would that ‘extra money’ go, do you think?
What, to you, in a Sri Lankan setting is “all above board and clean”? And can you name a few projects in Sri Lanka that have been ” all above board and clean” in your opinion?
PB will know what to do with the money. That’s his job. What kind of questions are those? Dont deserve a reply.
But thanks for keeping me entertained. I think I have gone and killed the dodo.
Come on Shammi, they do deserve a reply because clearly you have a benchmark for what is ““all above board and clean” in Sri Lanka and this project doesn’t fit that criteria. I’m just asking which projects in Sri Lanka have your ““all above board and clean” stamp of approval :)
Something that would stand up to public scrutiny, the type of deal that we could expect if the ‘right to information’ bill wa passed.
Funny that the Hyatt website makes no mention of this purchase, which makes sense when you read that the land was bought by Sinolanka Hotel and Spa (Pvt) Ltd. Where does Hyatt come into this, perhaps management contract? So in effect private land which was at the centerpiece of a pyramid scheme was taken over by the government and sold to a lower bidder which is a ‘public-private’ partnership. As to where the capital is coming from the only information available is that the investment capital is from private and state entities including the Sri Lanka Insurance Corporation Ltd. Where did the money for the purchase (in fact how much was it?) come from and where did it go?
Tastyjujbes you think the above is ok so we can get Hyatt into the country in a management role? I take back what I said about you being a ‘patriot.’ you’re simply an idiot. No wonder this government can keep doing what it does when the country is full of fools like you.
^ Won’t be surprised if you are seen wining, dining and partying at the Hyatt hotel when it is built despite all your self-righteous protestations. Selling this non-functioning, crumbling edifice in down town Colombo and converting it into branded hotel is a good thing – maybe not for the farmer in a village in, say, Kinniya, but certainly for the tourist industry in general (which is booming currently) and for accommodation in the city centre. Where were your loud and anguished cries over the last three years when this ugly, partly-built edifice was just standing there by the roadside like Mount Doom in Mordor? Didn’t give a toss then, but now the the whole sky is suddenly falling down?
Now now tastyjujubes, don’t get your panties in a twist to such an extent your comprehension fails. What I said in my comment (and I believe Shammi stated the same) is the issue that it was not sold to the highest bidder. Nowhere did I state that it shouldn’t have been sold, though admittedly with your two brain cells I can see how you missed that. Don’t be disheartened though, keep trying, you’ll reach your goal of being able to understand simple English someday :).
^ Doesn’t matter if it wasn’t sold to the highest bidder. What matters is whether the depositors get their money back, and whether the building is put to good use. Again, where was your whining and moaning over the last three years? How come you weren’t farting all over the place lamenting about how the depositors had their money stolen from them by cronies and that Colombo was left with a wasted shell of a building? Didn’t care then hmm? In any case, I’m quite happy with what’s happened here – it’s *your* frilly panties that seem to be in a twist :)
“Again, where was your whining and moaning over the last three years? How come you weren’t farting all over the place lamenting about how the depositors had their money stolen from them by cronies and that Colombo was left with a wasted shell of a building?” – Lol…I presume you have some kind of evidence that I was silent on this issue? Hey, if you’re happy about displaying your foolishness to the world…all I can say is bask in it :)
Oh yes, you cared *so much* about this over the last three years I can see, realist. You just could not be a total hypocrite could you? And I am basking…..basking in the joys of (1) seeing Colombo develop and (2) seeing hypocrites like you get thrown into the garbage bin (metaphorically of course).
Ah the old scheme, repeat yourself ad nauseam and hope you will eventually be assumed right. Again, can you please point out where I have not mentioned anything in the past 3 years? You appear so certain that I haven’t said anything to anyone the last 3 years about Lalith Kothalawela and his shenanigans, please do validate yourself.
I’m pretty sure you – and people of your ilk – had NOTHING to say about this building for the last 3 years. But now it’s like the proverbial worms crawling out of the woodwork :) If you have protested against the injustice metered out to the depositors and wailed about how their money was stolen by cronies why don’t you lay bare the evidence? Surely there must be a long trail of protestations given how you (pretend to) care so much about this? The deal has been sealed, and you are more than welcome to cry in the corner if you wish… while I bask with a smile on my face.
I want to protest about the waste of prime land and property by the Railway dept. There should be an act that allows the private sector to aquire underperforming government entities. How do I go about it? Any suggestions?
Ah tastyjujubes, enjoy your basking, after all it must give you a warm glow to display quite so publicly how dumb you are! It is amusing that your entire response was to insinuate that my protestations have only come out now, of course sans evidence. You missed addressing why this deal being done at a lower price (though if JP is correct below then it wasn’t?) was a good thing. Like I said before, please do sterilize before passing on your stupid genes.
Realist
” Never argue with a moron…… they’ll bring you down to their level and beat you with experience.”
if you still want to try.. read this http://www.angelfire.com/indie/adinasite/convincing1.html
:)
But it’s fun on a slow day at work :)
Besides tastyjujubes most of the time rises to a few barbs so you can keep stringing him/her along while he shows comment after comment that he/she has little grey matter.
Tasty is fun
and Dodo is absent :(
But you are ignoring me?
Where? when? I always pay the keenest attention to your blog.
I am enjoying my basking very much realist! No wailing, whining and arms a-flailing for me. No hypocrisy here. Just glad that something is being done about this monstrosity in Colombo. Even your “andonaava” has no deleterious effect :) I’m still waiting to see all the evidence of your protestations about cronies and your concern for the poor depositors that you must have made over the last three years since you care so much about this deal.
Like I said..stringing along and along :) Don’t think I ever accused you of hypocrisy, just helped display (you did most of the work really) your stupidity.
Still waiting realist, to see all the wailing and weeping you made out of concern for the poor depositors and for the fact that land and money was being wasted while this building just sat there for 3 years. Let’s face it, you care as much for the depositors and this building/land as much as you care about about the turds you dropped when you took your morning dump.
Lol….loving it. What if I say I had a deposit in Golden Key and actually joined that protest outside Lalith’s house . Luckily the amount is not earth shattering but I would still like to get that money back, if just to head out for a holiday. I might be telling the truth, I might not, there’s really no way for you to know. The only real evidence we have is that you’re a moron.
See jujubes (do you mind if I call you that), the point was not about concern or weeping about what happened in the last 3 years, its about what’s going on with the lack of transparency with this deal because with this deal, at least according to one insider, the chances of depositers getting repaid has diminished. I hope the guys wrong, but who knows.
I would say take the stupid genes out by standing in front of a train but as dumb as you are, you do have some comedic value on the internet…
AH..TASTYjUJUBES.. !! the irrepressible MR supporter! bigot and yes of course im labelling you moron!
it’c bcos of ppl like you that ppl like MR and all the other lackeys.. including UNP cronies… can swindle off this country, and the first enterprise that shuld have been taken over .. by the Underperforming Enterprises and Underutilized Assets Act was Mihin itself. i guess you are ok with that eh?
and please do read the article properly next time before u comment. the offer of Rs.7.8 bln was the one that as deemed sufficient to pay the depositors. it was rejected and sold for rs. 4.2 bln.
Shammi, Dinuka,
this idiot hasnt heard of transparency, so dont bother.. for all it’s worth , he might say “transparency” is a colonial or maybe imperialistic concept.
Did I touch a raw nerve?
Look, you are more than welcome to grab a few placards and run around int front of the Fort Railway Station screaming your opposition to this. Have fun! :)
tastyjujubes, i would agree with you, only ceylinco has all my money and i don’t appreciate the fact that the government sold what is possibly the simplest way to give us back our money, for less than half its value. like citizen says, the offer of 7.8 bn that ceylinco got is what is sufficient to pay people back, not the amount it was sold for.
i wish running around fort with placards would help us. been there, done that.
I will agree the deal is “unfair” if the depositors do not get their original deposits back. However, if the depositors get all their original deposits back, then it does not matter at what price the building was sold. Much better to sell the building and at least pay back the depositors and get a hotel built in place. If the depositors want MORE than their original deposit (eg for “pain of mind” or other assorted compensation) then they ought to go to the courts.
yes.. people who claim to be patriots.. and then defend crooks who swindle the country do touch my nerve.. i’m truly sorry that it doesnt seem to touch urs!
maybe, u being one that seems to afford the hyatt.. like to keep it that way… so why rock the boat? who cares if all the other countryman r f***ed right? ya? .. thats the attitude!!
You need to go have a lie down, looks like the world is a bit too much for you.
“looks like the world is a bit too much for you”. lol. Love it.
Yes, the world MR is building for his family member is too much for us ! !
Think there may be some mistake here.
According to what I have heard, the GoSL called for bids, indicating an expected price of US$70m. Several bids were received, all apparently in the range of US$30m. This was then dumped on the SLIC for 4.2bn, a bit higher than what other bidders had offered.
The price being quoted of Rs.7.8bn seems to square with what the GoSL was expecting, I’m guessing that there is some confusion over the expected floor price and a possible offer.
Tasty Jujubes:
“Ah realist, so eager to place labels on others eh? Mihin = waste of money. Taking over a rotting building and turning into a branded hotel like is being done here, is in my opinion, a good thing. If I’m not mistaken the building belonged to the biggest swindlers in Sri Lanka’s history – consider it the price they have to pay for swindling people out of their money.”
The money paid for the property should rightly go to paying the depositors of Ceylinco.
Think the real issue here is not undervaluation. If anything it was overvalued and pushed onto the SLIC. The issue is where the money went.
Money should have gone to the entity winding up Ceylinco or at least to the Central Treasury. If not who collected it? The UDA? How are they accounting for it?
I am not an MR supporter BUT (it’s VERY BIG BUT) I don’t blame the guy for virtually anything. Problem with this country is that fucked up h0m0 Ranil W. If that idiot steps down like a gent, then there is a chance of creating a common opposition. Now there is none, and that is the worst thing that happen in a democracy. A government without a good strong opposition is like a bunch of dogs without leashes.
I am now totally convinced that this country (or this entire sh1thole region called south asia) CANNOT “develop” to the level of European standards. I mean “development” means trying to achive to levels set by the Europeans. THEY set the sandards, right? Nothin is ours.
We had 64 years, over 2 generations to develop. Contrary to what most think, we HAVE NOT progressed. Compare GDP per capita of 1948 and NOW, against GDP per capita of the US then and now and it is clear we have actually gone backward, not forward.
Agree about Ranil. Disagree about everything else.
Well, he’s right about this
“We had 64 years, over 2 generations to develop. Contrary to what most think, we HAVE NOT progressed. Compare GDP per capita of 1948 and NOW, against GDP per capita of the US then and now and it is clear we have actually gone backward, not forward.” We have more wealth than in 1948 but everything else is fragile. When the pillars of civilised society, now crumbling, end up falling even wealth will diminish.
Jack, I think his idea of progress and mine are not the same.
Agree that the economy has been mimanaged and that GDP is a useful guage for economists, planners and accountants (;)) no doubt, but we have a lot of wealth in thi country that is not added on to the GDP figure. The mental stress levels in European countries has also risen faster with their progress than in our country.
The sudden opening up of the economy and the war has made us slow and even regress in some repects, but we have achieved a lot in terms of health and education ( though right now is a different story, of coure)
I can undertand his frustration, but dont think the situation is beyond repair. For instance, I think we could make spectacular progress in real terms if we looked after the segment you mentioned in one of your blog posts, the female workforce of the nation that actually brings home the bacon.
I also dont believe that European standards should always be applied to our situation, though we should learn from them. I’ve been hearing a lot about Swiss Bael 2 standards being implemened here, but were they implemented in countries like Greece or Ireland I wonder.
Jack,
Is ‘dignified’ acquiescence to our exalted colonial masters a pillar of civilized society?